Medical billing business opportunity schemes
If you’re looking for a home-based you that no selling or experience is • Check out the company with
business that can help you pull in required, and that they will provide the consumer protection
$50,000 or more a year using your customers or qualified salespeople agency, and the Better
computer, advertisements for to find clients for you. The reality: Business Bureau where you
medical billing centers may be you will have to sell⎯these live and where the business is
appealing. But before you part promoters rarely provide headquartered. These
with your money, consider this: experienced sales staff or contacts organizations can tell you if
The Federal Trade Commission within the medical community. there are any unresolved
has brought charges against complaints about the
several companies for The company will follow-up by company. While complaints
misrepresenting the earnings sending you promotional materials may alert you to problems, the
potential of medical billing centers, that typically include a brochure, absence of complaints does
and failing to provide certain key application, sample diskettes, a not necessarily mean the
pre-investment information the law contract (licensing agreement), company is legitimate.
requires. disclosure document, and in some Unscrupulous companies may
cases, testimonial letters, video settle complaints, change their
How the scam works cassettes, and reference lists. For names, or move to avoid
your investment of $2,000 to detection.
You can find ads for pre-packaged $8,000, they promise software,
businesses⎯known as billing • Call the Secretary of State in
training, and technical support.
centers⎯in newspapers, on the state where the company
And the company will encourage
television, and on the Internet. is headquartered to determine
you to call its references. If you do
When you respond, you’ll get a how long it has been in
make the phone calls, be aware
sales pitch. You’ll hear that there’s a business. In Wisconsin, call the
that you may be talking to a
crisis in the health care system, Department of Financial
“singer” or a “shill”⎯a person
due partly to the overwhelming Institutions, Corporations
hired by the promoter to give a
task of processing paper claims, Division: (608) 261-7577.
favorable report on the business.
that electronic claim processing is • Get all earnings claims in
the solution, and that because only writing. Insist that the
The bitter pill
a small percentage of claims are promoter give you written
transmitted electronically, the The FTC has found that few substantiation. Be sure it
market for billing centers is wide consumers purchasing a medical includes the number and
open. billing business opportunity are percent of others who have
able to find clients, start a earned at least as much as the
These promoters also may tell you business, and generate revenues, promoter claims. If the
that many doctors who process let alone earn a substantial promoter hesitates or refuses,
claims electronically want to income and recover their walk away from the deal. Don’t
“outsource” or contract out their investment. Competition in the believe what was said about
billing services because it will save medical billing market is very sales, profits or income.
them money. They’ll promise that strong among a number of large
you can earn a substantial income and well-established firms. • Be skeptical of past success
working full or part-time, providing stories. Don’t rely solely on
services like billing, accounts How to protect yourself the names given to you by the
receivable, electronic insurance promoter. Fraudulent
Taking certain precautions can companies sometimes hire
claim processing, and practice help you minimize your risk of
management to doctors and ”references” to speak to
losing money to a medical billing potential investors about
dentists. They also may assure business opportunity: earnings claims. Ask the
promoter to give you the It would also be a franchise if- Franchise Rule, verify it with the
names of all or many previous • The goods you are selling or FTC, an attorney, or a business
purchasers so that you can distributing are identified by a advisor. Even if the business is not
pick and choose whom to call. trademark, service mark, trade legally required to provide a
When speaking to references, name, advertising or other disclosure document, you still may
ask them for the names of commercial symbol want one for your own information.
their clients and details of their designating the company. –
operations. You also might and - The company exerts Where to complain
consider meeting with significant control over, or If you think you’ve been defrauded in
references in person. If the provides significant assistance a medical billing business
promoter or the references to, the way you conduct opportunity, contact the company
hesitate or refuse, walk away business. – and - The and ask for your money back. Let
from the deal. company requires you to pay the company know you plan to
• Consult an attorney, $500 or more when you sign notify law enforcement and other
accountant, or other the contract or within six officials about your experience.
business advisor before you months after you begin Keep a record of your
sign any agreement or make operations. conversations and
any payments upfront. correspondence. If you send
Entering into any business The required disclosure document documents to the company, make
opportunity may require a provides important information sure you send copies, not
significant financial investment. about a business: originals. Send correspondence by
Your attorney can review the • the names, addresses, and certified mail-and request a return
company’s contract and telephone numbers of other receipt-to document what the
advise you on how best to purchasers; company received.
proceed. If the company • a fully-audited financial
requires a deposit, you may statement of the seller; If you can’t resolve the dispute
want your attorney to establish with the company, several
an escrow account where the • the background and organizations may be able to help
money will be maintained by a experience of the business’s you. Check your phone book for
neutral third party. key executives; the complete names, addresses,
• the cost of starting and and phone numbers for these
Business opportunities and maintaining the business; and organizations. The Better
franchises • the responsibilities you and Business Bureau (BBB) where the
the seller will have to each company is located—in Wisconsin
Some businesses are considered
other once you’ve bought. 1-800-273-1002. Your local
franchises. Usually, if a business
Postmaster. The U.S. Postal
opportunity constitutes a franchise,
Pay special attention to the Service investigates fraudulent
the law requires that the company
sections detailing: mail practices.
give you a Franchise Disclosure
Document at least 10 days before • the business experience of the
For more information or to file a
you sign an agreement or pay any company and its directors;
complaint, contact the Bureau of
money. • any lawsuits brought against Consumer Protection at:
the company or its directors by
There are two ways to tell if the franchisees, and suits alleging (800) 422-7128
business opportunity you’re fraud;
considering is a franchise. 2811 Agriculture Drive
• fees you will have to pay and PO Box 8911
It is a franchise if - Madison WI 53708-8911
the conditions under which
• The goods or services that you any fees or deposits will be (608) 224-4976
will sell or distribute will be returned to you; and
supplied by either a particular FAX: (608) 224-4939
company or a designated • substantiation for any claims
TTY: (608) 224-5058
supplier. – and - The company about your earnings potential
will help you by securing or the earnings of existing E-MAIL:
locations, sites, or accounts. – investors. DATCPHotline@Wisconsin.gov
and - The company requires
If the seller doesn’t give you a WEBSITE:
you to pay $500 or more when
disclosure document, ask why.
you sign the contract or within www.datcp.state.wi.us
Some sellers may not be required
six months after you begin
by law to provide one. If a (Taken from the FTC’s fact sheet, “Medical Billing
operations. Business Opportunity Schemes”)
franchise or business opportunity
-or-
seller says it’s not covered by the I:cpcic/facts/BusinessOpportunity-MedicalBilling254 01/09