ClearClaim Medical Billing

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Executive Summary

ClearClaim Medical Billing is a medical billing company in Tennessee that handles claims, payments, denials and follow-up for small medical practices, so the doctors and staff can focus on patients. We send claims to insurers, post payments, chase unpaid and denied claims, bill patients and report results every month. We are paid a percentage of what the practice actually collects, so we only do well when our clients do.

A small practice loses money in quiet ways. Claims with a wrong code or a missing detail are denied and never fixed. Claims go unsent for weeks. Patient balances are not billed. A front desk worker doing billing between phone calls cannot keep up, and hiring a full-time biller is costly for a practice with two or three providers. Many outside billing companies are hard to reach, report little and bill for work that is hard to see.

Here is what our numbers show. We expect to manage about $1,800,000 of collections for our clients in Year 1, which brings in sales of $174,000 from billing fees, credentialing and audits, growing to about $14,500,000 of collections and $1,251,773 in sales by Year 5. We expect a loss of about $69,600 in Year 1 and a loss of about $23,400 in Year 2 while we sign our first clients, then a profit of about $20,300 in Year 3, a profit of about $97,300 in Year 4 and a profit of about $77,900 in Year 5. Billing is a business of steady monthly fees, but a new company has to pay billers and software before most clients are signed, so we plan carefully for cash.

We need $210,000 in total. Of that, $44,300 is startup costs (equipment, software setup, a privacy and security program, legal help, insurance, training and marketing) and the rest is cash to pay staff and bills while we sign clients and while payers pay our clients. I am putting in $70,000 of my own money, and I am asking for a $140,000 SBA loan.

I am Marcus Dennard, a certified professional coder with 10 years of experience running billing for medical practices, and the owner. These numbers are estimates based on the assumptions listed at the end of this plan, not promises.

Company Description

ClearClaim Medical Billing is a small, independently owned medical billing company in Tennessee, planned as a limited liability company (LLC). We work remotely and in person with independent medical practices, including primary care, behavioral health, physical therapy, urgent care and home health agencies.

Our mission. To help small practices get paid fully and on time for the care they give.

What we believe. Billing is part of patient care: a clean claim keeps the practice open. We report results in plain numbers every month, we keep patient information secure and we never do anything that is not allowed, such as billing for care that was not given. We would rather lose a client than break the rules.

What we offer:
- Full billing and collections. We check insurance, send claims, post payments, work denials, follow up on unpaid claims, send patient statements and report results monthly. We are paid a percentage of collections, about 7% in Year 1 for small practices.
- Provider enrollment and credentialing. We complete and track applications for new providers to join insurance plans and Medicare and Medicaid, for a fee per application.
- Coding review and audits. A certified coder reviews a sample of a practice's claims, finds missed or incorrect codes and explains what to fix, for a fee per project.
- Reporting and coaching. A monthly report shows what was billed, collected and denied, how long claims take to pay and what to fix at the front desk.

Who we serve. Independent practices with one to ten providers, with priority for those with annual collections between $250,000 and $2 million. We do not take every practice. We decline practices that ask us to do something that is not allowed.

What we do not do. We do not give medical or legal advice. We do not use code, change or hold anything that is not supported by the chart, and we do not "upcode." Medicare and other payments go to the practice's own bank account, not ours. We do not promise a specific increase in collections.

How we are run. I am the owner and certified coder. Billers are employees who are trained in privacy and security, and certified where possible. An attorney and an accountant advise us, and a small advisory group of a practice manager and a physician tells us what is working.

Where things stand today. We have a draft client agreement, a software quote, a draft HIPAA program and introductions to five practices and one home health agency. We have no signed clients yet. Before we begin, our attorney will review our client agreement and our business associate agreement, and we will confirm whether Tennessee requires any registration for the services we offer.

Problem & Opportunity

Small medical practices operate on thin margins and are paid by many insurers who each have their own rules. A claim with the wrong code, a missing modifier, an expired authorization or a late filing can be denied or reduced. Many practices never fix denied claims, and some write off money they are owed. Patient balances are often billed late or not at all.

Hiring a full-time biller is costly, and one person is a single point of failure. When the biller is sick or quits, claims pile up and cash dries up. Rules change constantly across insurers and Medicare, and a practice without a billing specialist cannot keep up.

Outside billing companies can help, and quality varies. Some are slow to answer, use offshore staff without disclosure, hide fees or do not report clear numbers. Practices also worry about privacy, because a billing company sees all patient information.

For a new billing company, the hard parts are trust and cash. A practice hands over its revenue, so it wants proof of competence and security. A new company must pay billers and software before the first client's claims turn into payments, which can take 30 to 60 days or more.

We want to be clear about what we know and do not know. Many small practices want help with billing, and the fee for percentage billing is usually between about 4% and 8% of collections. We will use the most recent numbers from the state and trade groups in our final plan and will not overstate them. We do not know how fast practices will sign, which is why our plan builds in a slow first year and does not assume we will win every practice we talk to.

Products & Services

ClearClaim will take over a practice's billing, send clean claims, work every denial and unpaid claim, and report results every month, for a percentage of what we collect.

How it works, step by step:
1. Discovery. We review a practice's recent claims, denials and aging report, and tell the practice honestly what we find and whether we can help. There is no charge.
2. Agreement. We sign a client agreement and a business associate agreement under HIPAA. The agreement lists our fee, what we do, what the practice does and how either side may end it.
3. Setup. We connect to the practice's records and billing system, set up the clearinghouse and payer connections, confirm that payments go into the practice's own account and train front desk staff on what we need.
4. Claims. We check insurance, review the coding and send claims within a day or two of the visit. A clean claim is paid faster.
5. Payments and denials. We post payments, reconcile them to the bank, and work every denial and short payment with a written plan and a deadline.
6. Follow-up. We follow up on unpaid claims on a schedule, and we send patient statements and answer patient billing calls.
7. Reporting. Each month we send a report with billed, collected and denied amounts, days in accounts receivable, the clean-claim rate and a short list of what to fix.
8. Credentialing and audits. We enroll providers with insurers and run coding reviews as separate services.
9. Quality. We track the clean-claim rate, denial rate, days in accounts receivable and client satisfaction, and review every complaint.

Why this approach is strong. A percentage fee ties our income to the practice's collections. A small team and a single point of contact make us easy to reach, and a monthly report shows exactly what we did.

Market Analysis

Who we serve: independent medical practices with one to ten providers, home health and behavioral health agencies and urgent care clinics that do not have a full billing department.

Our primary group is small practices in our service area, and by working remotely we can serve practices across Tennessee and nearby states, as long as we meet each state's rules. We will use the most recent numbers from the state and professional associations in our final plan.

Our referral sources are practice managers, physicians, accountants who serve medical practices, practice consultants, medical associations, software vendors and other clients.

How we sized our plan. We plan to manage about $1,800,000 of client collections in Year 1, which at about a 7% fee brings in $126,000. That is about six practices with about $300,000 each. We plan about $5,000,000 in Year 2, $8,500,000 in Year 3, $11,500,000 in Year 4 and $14,500,000 in Year 5, with the fee drifting from about 7% to about 6.6% as larger practices join. We also plan credentialing for 80 applications in Year 1, growing to 420, and 10 coding reviews, growing to 58.

How fast a biller can work. A trained biller can manage about $1.2 million in collections a year in Year 1, and we plan for productivity to rise to about $1.55 million by Year 5 as our systems improve. This is why our cost per $1,000 collected falls from about $48 to about $41.50.

Growth depends on signing practices and keeping them, so treat the later years as goals, not promises.

Competitive Landscape

Other choices a practice has, and what makes us different.

- An in-house biller. This works when the biller is good and stays. The practice carries the cost and the risk. We offer a team, backup and reporting.
- Large billing companies. They have more tools and staff, and a small practice can feel lost. We compete on service, access and clear reports.
- Other small billing companies. Some are excellent. We compete on certified staff, security and clear fees.
- Billing software with a built-in service. These can be convenient but may not work claims and denials closely. We work with the practice's own software where possible.
- Offshore billing firms. They can be low cost and may be hard to reach or raise privacy questions. We are local, answer the phone and explain who touches the data.
- Doing it themselves. Many small practices do this. We help them see what they are leaving on the table.

What makes us different.
- Certified coders and a named biller for every client.
- A monthly report in plain language with a short list of what to fix.
- Payments go straight to the practice's account, never to ours.
- A written security program and a business associate agreement with every client.
- Honest numbers: we show clean-claim rate, denial rate and days in accounts receivable.

What we do not claim. We are new, and larger firms have more clients and tools. We plan to earn trust one practice at a time.

Marketing & Sales Strategy

How we will find practices.

Direct outreach. We will call and visit practice managers and physicians, offer a free review of recent claims and denials and share what we find. Many practices do not know how much they are owed.

Referrals. We will build relationships with accountants, practice consultants, medical associations and software vendors who serve small practices, and offer to speak at their meetings. We do not pay for referrals from anyone who could be in a position to influence a patient referral.

Home health and behavioral health. These practices have complex billing rules, so we will focus on them as a specialty.

Content. We will publish short, practical guides on denials, coding changes and collections, and a simple website with clear pricing and a security page.

Clients. Each client is a reference. We will ask satisfied practices for a short testimonial and a case study, with their permission and without patient information.

Pricing. Our billing fee is about 7% of collections in Year 1, with a lower rate for larger practices and a minimum monthly fee. Credentialing is about $375 per application and coding reviews about $1,800 per project. We publish our rates and terms in writing.

Operations Plan

How the business will run.

Setup (the 3 to 4 months before the first client). We will form the LLC, buy cyber liability and errors-and-omissions insurance, set up secure workstations, choose a billing platform and clearinghouse, complete a HIPAA risk assessment and write our security policies, have our attorney prepare the client agreement and business associate agreement, and open a business bank account. We will not take a client's data until the security program and agreements are in place.

Staffing. In Year 1: I serve as owner and certified coder and do sales. Production billers are employees who work on client accounts. Their pay is counted in the cost of each $1,000 we collect, and we plan one biller for each $1.2 million of client collections in Year 1. A sales and client success manager joins in Year 2, a billing manager in Year 3, a second sales manager and a compliance and training specialist in Year 5.

Security and privacy. We follow the HIPAA Security Rule: unique logins, multi-factor authentication, encrypted storage, access limited to what each person needs, regular training and a written plan for breaches. Staff work from secure computers, not personal devices. We carry cyber liability and errors-and-omissions insurance.

Compliance. We bill only what is documented and supported by the chart. We screen new staff against federal exclusion lists, and we refuse instructions that would break the rules. Payments for Medicare and other payers go into the practice's own account, and we never take direct payment of a provider's claims.

Quality. We track the clean-claim rate (claims paid on the first submission), the denial rate, days in accounts receivable and the net collection rate for every client, and compare them with benchmarks.

Billing. We invoice our fees monthly based on collections reported in the practice's bank and system. Clients pay about 33 days after we invoice on average in the plan.

Software. We use a billing platform and clearinghouse, with fixed monthly fees in other yearly costs and per-claim costs counted in the cost of each $1,000 collected.

Insurance. We carry cyber liability, errors-and-omissions, general liability and workers' compensation insurance, and our costs are in the budget.

Management & Organization

The people who will run ClearClaim.

Marcus Dennard, owner and certified coder. A certified professional coder with 10 years of experience, including six years managing billing for a multi-provider medical group. He leads sales, client relationships, coding quality, finance and compliance. (Replace this paragraph with your own background.)

Billers (hourly employees). Production staff who work claims, denials and follow-up for assigned clients, with their pay counted in the cost of each $1,000 collected.

Sales and client success manager (from Year 2). Finds new practices, onboards them and keeps relationships strong.

Billing manager, certified (from Year 3). Supervises billers, reviews quality and handles hard claims.

Compliance and training specialist (from Year 5). Runs privacy and security training and internal audits.

Outside advisors. A healthcare attorney, an accountant, a security consultant and a practice manager who serves as an advisor.

Staff pay in this plan is a full year per person: owner and certified coder $52,000, sales and client success manager $52,000, billing manager $62,000 and compliance and training specialist $58,000. Replace them with the pay you can offer where you live.

Milestones Narrative

Our goals and when we plan to reach them.
- Before opening (4 to 6 months ahead): talk with at least 20 practice managers and get at least 3 letters of interest, get insurance quotes, form the LLC, get an EIN, complete the HIPAA risk assessment, have the attorney prepare the client and business associate agreements, choose the billing platform and open a business bank account. Do not accept a client's data until the security program is in place.
- Year 1: sign about 6 practices and manage about $1,800,000 in collections, with 80 credentialing applications and 10 coding reviews; $174,000 in sales and a loss of about $69,600.
- Year 2: about $5,000,000 in collections, a sales and client success manager and 170 applications; $451,451 in sales and a loss of about $23,400.
- Year 3: about $8,500,000 in collections and a billing manager; $746,365 in sales and a profit of about $20,300.
- Year 4: about $11,500,000 in collections and a clean-claim rate above 95%; $1,000,300 in sales and a profit of about $97,300.
- Year 5: about $14,500,000 in collections, a second sales manager and a compliance and training specialist; $1,251,773 in sales and a profit of about $77,900.
Growth depends on winning and keeping customers, so treat the later years as goals, not promises.

What we check every week: new practices signed, collections managed, clean-claim rate, denial rate, days in accounts receivable, client complaints, unpaid invoices and cash in the bank.

Funding Request

How much we need and how we will use it. Total we are raising: $210,000.

How we got that number. The Funding Need Calculator in this plan adds up three things:
- Startup costs of $44,300, listed item by item in the Startup Costs section: $9,000 for secure workstations, dual monitors, headsets and a business phone system; $6,000 for billing platform setup, clearinghouse connection and staff training; $5,500 for HIPAA risk assessment, security policies and a staff training program; $4,500 for attorney: client agreement, business associate agreement and entity setup; $4,000 for cyber liability and errors-and-omissions insurance, first payments; $3,200 for professional coding certification study and exam fees; $600 for business license and state registrations; $2,000 for office or coworking deposit and first month; $4,500 for website, logo and sales materials; $5,000 for opening marketing: conference booth, mailers and introductory meetings.
- The cash the business uses before it breaks even, about $72,693: because we pay billers and software before the first client's claims become payments, which takes 30 to 60 days or more, and because the first year has few clients.
- A cash cushion of about $26,560: three months of Year 1 operating costs.
- Together that comes to about $143,553, rounded up to the nearest $500: $144,000.
We are raising $66,000 more than that, $210,000 in all, to cover the loan payments and the extra cash the early years take. With this funding, the lowest year-end cash balance is about $35,000, at the end of Year 3.

Where the money comes from:
- My own money: $70,000.
- SBA 7(a) loan for startup and working capital: $140,000.

Kind of funding we are looking for. An SBA 7(a) loan through a bank or community lender, plus our own equity. Lenders for a service business like ours look closely at signed letters of interest, our experience and our plan for the first year of cash.

How we will pay it back. We expect a loss of about $69,600 in Year 1 and a loss of about $23,400 in Year 2, then a profit of about $20,300 in Year 3, a profit of about $97,300 in Year 4 and a profit of about $77,900 by Year 5. With this funding, the business has money in the bank at the end of every year of the plan. The loan is planned at sba 7(a) loan for startup and working capital at 12.75% over 10 years, about $2,070 a month. That is about $2,070 a month in all, and it is already included in our cash flow. We chose these as cautious planning rates; ask the lender for the real rates, which may be lower or higher.

What we are offering the lender: a personal guarantee, a lien on business assets and our client agreement and security program.

A smaller first step, if needed. If we cannot raise the full amount right away, we can start smaller and grow into this plan:
- Phase 1: start as a solo certified biller serving two or three practices from a home office with a basic billing platform, which keeps costs low and builds references.
- Phase 2: once you have steady clients and a record of better collections, add billers and a sales hire and follow this plan.
To plan the smaller start, make a copy of this plan (use Duplicate) and lower the numbers to match.

All numbers in this plan are estimates. We will update them as real results come in.

Appendix Notes

Documents to attach before you send this plan:

- Your resume with your coding or billing certifications (such as CPC or CPB).
- A personal financial statement (a list of what you own and what you owe; lenders usually provide a form).
- Business registration papers and your EIN (your business tax number from the IRS, free at irs.gov).
- Your client agreement and business associate agreement, reviewed by an attorney.
- Your HIPAA risk assessment, security policies and breach plan.
- Insurance quotes or proof of insurance, including cyber liability and errors-and-omissions.
- Signed letters of interest from practices.
- A sample monthly client report.
- A quote from your billing platform and clearinghouse.
If you don't have any of this yet, no worries - let's continue.

The assumptions behind our numbers (change them in the Financials section to match your own):
- Billing and Collections Service (per $1,000 collected for clients): about $70.00 in Year 1, rising to $66.00; about $48.00 in direct costs, rising to $41.50; about 1,800 in Year 1, growing to 14,500.
- Provider Enrollment and Credentialing (per application): about $375 in Year 1, rising to $422; about $190.00 in direct costs, rising to $213.85; about 80 in Year 1, growing to 420.
- Coding Review and Revenue Cycle Audits (per project): about $1,800 in Year 1, rising to $2,026; about $900.00 in direct costs, rising to $1012.96; about 10 in Year 1, growing to 58.
- Billing fee: about 7% of collections in Year 1 (about $70 per $1,000), drifting to about 6.6% ($66) by Year 5 as larger practices join; about $48 per $1,000 in direct costs in Year 1 (biller pay about $50,400 a year including taxes, for about $1.2 million of collections, plus about $6 per $1,000 in clearinghouse and software fees), falling to about $41.50 as productivity rises to about $1.55 million per biller; about 1,800 thousand dollars of collections in Year 1, growing to 14,500 thousand.
- Credentialing and enrollment: about $375 per application in Year 1, with about $190 in direct staff time.
- Coding reviews and audits: about $1,800 per project in Year 1, with about $900 in direct costs.
- Pay (a full year, per person): owner and certified coder $52,000; sales and client success manager $52,000; billing manager (certified) $62,000; compliance and training specialist $58,000.
- Other yearly costs in Year 1: billing platform, clearinghouse and secure hosting (fixed fees) $9,600, hipaa security program, cyber and errors-and-omissions insurance $9,000, office or coworking rent $9,600, marketing, website and conferences $9,000, accounting and legal $4,800, certifications and staff training $3,600, phones, supplies and software subscriptions $2,400, payroll taxes and benefits (office staff) $6,240. These grow between 8% and 24% a year.
- Startup costs and equipment ($44,300 in Year 1, then $3,000, $4,000, $4,000, $5,000) are spread evenly over five years in the plan's books.
- Customers and payers pay about 33 days after service. Income tax at 21%.
- Every dollar amount is an estimate. Replace them with your own quotes and research.

Startup Costs