Starting a Medical Billing Service

August 1, 2015 | By | Reply More

QUESTION ON Starting a Medical Billing Service

I am thinking of opening a medical billing servicing center. I have no experience with medical code. But I found a company that promises that their software have the ability to handle medical coding. The name of the company is IAMS. I tried to get them to give me names of those in my state that have bought their software but they told me that only one person of which they did not give me the person information. A week after I contacted them for information about their software, they called me back with a price increase. I need your advice –

– Moses

Advice by Nach Maravilla

Dear Moses:

Medical billing is one area where scammers proliferate. They let you believe that you can succeed in this business even without any knowledge of medical codes. As you said, you do not know anything about medical codes, but the company offers you a software that can alleviate that problem.

Medical billing is a business that requires extensive knowledge and skills that can only be gained through training and education. Do not be led to believe that it is very easy to get clients — doctors, hospitals, insurance companies — even if you do not have any knowledge of medical codes. Many people who fall prey to these scams find that the promise of high income and loads of clients is simply not true.

Like any other business, you have to work hard to convince your clients to trust a crucial part of their business to you. If a doctor finds that you know nothing about medical codes, do you think that doctor will give you their business even if you say that you already have a software? The business of that doctor depends on how well the medical billing provider is able to collect on his receivables from insurance and patients.


If you are planning to invest in a business opportunity, the Better Business Bureau recommends the following:

1) Ask the company where it is incorporated and whether it has an in-state office; ask for names of owners and officers, their backgrounds, and prior business experience. Verify the information with the BBB or another impartial outside organization.

2) Ask about the product you will be selling, what it will cost you, your source of supply, any performance claims and guarantees, the company’s replacement and repair policies and procedures for handling complaints from you or your customers.

3) Ask about any initial fees you will be required to pay and what they are to be used for.

4) Get written copies of the company’s business and financial statements. Ask an accountant, attorney or outside financial expert to review the materials. In most cases, the FTC requires the promoter of a franchise or seller of a business opportunity to provide prospective buyers with detailed disclosure documents at the time of the offering. Several states require that certain disclosure documents be provided at the time of the offer.

5) Investigate and verify all information received from the salesperson.

6) Consult with people who know the product and type of business you may be entering. Review with them the selling company’s claims concerning marketability of the product, pricing, projected profits, etc. Learn how many sales people are in your area and whether you will have an exclusive territory.

7) Independently contact some of the people who have already invested in the product or service about their experience.

8) If you decide to invest, get all promises in writing and the contact signed by an authorized agent of the company. If you suspect fraud, contact the Better Business Bureau.

Good Luck

Nach M Maravilla

Recommended Resources on How To Start a Medical Billing Service

Article originally published in April 2001. Updated February 24, 2012

Nach Maravilla is the President and CEO of LLC. He has over thirty years experience in sales and marketing of various products, which covered as he jokingly describes, “from toothpicks to airplanes” He also had extensive experience in International trading and he always excelled in special promotional ideas for retail outlets.

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