Medical Billing Business Opportunity
If you’re looking for a home-based These promoters also may tell $2,000 to $8,000, they promise
business that can help you pull you that many doctors who software, training, and technical
in $50,000 or more a year using process claims electronically support. And the company will
your computer, advertisements want to “outsource” or contract encourage you to call its
for medical billing centers may out their billing services because references. If you do make the
be appealing. But before you it will save them money. They’ll phone calls, be aware that you
part with your money, consider promise that you can earn a may be talking to a “singer” or a
this: The Federal Trade substantial income working full “shill”a person hired by the
Commission has brought charges or part-time, providing services promoter to give a favorable
against several companies for like billing, accounts receivable, report on the business.
misrepresenting the earnings electronic insurance claim
potential of medical billing centers, processing, and practice The Bitter Pill
and failing to provide certain key management to doctors and
pre-investment information the dentists. They also may assure The FTC has found that few
law requires. you that no selling or experience consumers purchasing a medical
is required, and that they will billing business opportunity are
How the Scam Works provide customers or qualified able to find clients, start a
salespeople to find clients for business, and generate revenues,
You can find ads for pre-packaged you. The reality: you will have to let alone earn a substantial
businesses known as billing sellthese promoters rarely income and recover their
centersin newspapers, on provide experienced sales staff investment. Competition in the
television, and on the Internet. or contacts within the medical medical billing market is very
When you respond, you’ll get a community. strong among a number of large
sales pitch. You’ll hear that there’s and well-established firms.
a crisis in the health care system, The company will follow-up by
due partly to the overwhelming sending you promotional materials How to Protect Yourself
task of processing paper claims, that typically include a brochure,
that electronic claim processing application, sample diskettes, a
Taking certain precautions can
is the solution, and that because contract (licensing agreement),
help you minimize your risk of
only a small percentage of claims disclosure document, and in
losing money to a medical billing
are transmitted electronically, the some cases, testimonial letters,
market for billing centers is wide video cassettes, and reference
open. lists. For your investment of
• Check out the company you by the promoter. the law requires that the company
with the consumer protection Fraudulent companies give you a Franchise Disclosure
agency, and the Better sometimes hire ”references” Document at least 10 days before
Business Bureau where you to speak to potential investors you sign an agreement or pay
live and where the business about earnings claims. Ask any money.
is headquartered. These the promoter to give you the
organizations can tell you if names of all or many previous There are two ways to tell if the
there are any unresolved purchasers so that you can business opportunity you’re
complaints about the pick and choose whom to considering is a franchise.
company. While complaints call. When speaking to
may alert you to problems, references, ask them for the #1
the absence of complaints names of their clients and
does not necessarily mean details of their operations. • The goods or services that
the company is legitimate. You also might consider you will sell or distribute will
Unscrupulous companies meeting with references in be supplied by either a
may settle complaints, change person. If the promoter or the particular company or a
their names, or move to references hesitate or refuse, designated supplier.
avoid detection. walk away from the deal. • The company will help you
• Call the Secretary of State by securing locations, sites,
in the state where the • Consult an attorney, or accounts.
company is headquartered to accountant, or other • The company requires you to
determine how long it has business advisor before pay $500 or more when you
been in business. In you sign any agreement or sign the contract or within six
Wisconsin, call the make any payments upfront. months after you begin
Department of Financial Entering into any business operations.
Institutions, Corporations opportunity may require a
Division: 608/261-7577. significant financial investment. Or, #2:
• Get all earnings claims in Your attorney can review the
writing. Insist that the company’s contract and • The goods you are selling or
promoter give you written advise you on how best to distributing are identified by a
substantiation. Be sure it proceed. If the company trademark, service mark, trade
includes the number and requires a deposit, you may name, advertising or other
percent of others who have want your attorney to establish commercial symbol
earned at least as much as an escrow account where the designating the company.
the promoter claims. If the money will be maintained by • The company exerts significant
promoter hesitates or refuses, a neutral third party. control over, or provides
walk away from the deal. significant assistance to, the
Don’t believe what was said Business Opportunities way you conduct business.
about sales, profits or and Franchises • The company requires you to
income. pay $500 or more when you
• Be skeptical of past Some businesses are considered sign the contract or within six
success stories. Don’t rely franchises. Usually, if a business months after you begin
solely on the names given to opportunity constitutes a franchise, operations.
The required disclosure or the earnings of existing If you can’t resolve the dispute
document provides important investors. with the company, several
information about a business: organizations may be able to
If the seller doesn’t give you a help you. Check your phone
• the names, addresses, and disclosure document, ask why. book for the complete names,
telephone numbers of other Some sellers may not be required addresses, and phone numbers
purchasers; by law to provide one. If a for these organizations.
• a fully-audited financial franchise or business opportunity
statement of the seller; seller says it’s not covered by Your local Better Business
• the background and the Franchise Rule, verify it with Bureau (BBB) and BBB where
experience of the business’s the FTC, an attorney, or a the company is located.
key executives; business advisor. Even if the
• the cost of starting and business is not legally required Your local Postmaster. The
maintaining the business; to provide a disclosure document, U.S. Postal Service investigates
and you still may want one for your fraudulent mail practices.
• the responsibilities you and own information.
the seller will have to each
other once you’ve bought. Where to Complain For more information or to file a
complaint, contact the Bureau of
Pay special attention to the If you think you’ve been defrauded Consumer Protection at:
sections detailing: in a medical billing business
opportunity, contact the company (800) 422-7128
• the business experience of and ask for your money back.
FAX: (608) 224-4939
the company and its directors; Let the company know you plan
• any lawsuits brought against to notify law enforcement and TTY: (608) 224-5058
the company or its directors other officials about your
by franchisees, and suits experience. Keep a record of
alleging fraud; your conversations and
• fees you will have to pay and correspondence. If you send Website:
documents to the company, http://datcp.state.wi.us/
the conditions under which
any fees or deposits will be make sure you send copies, not (Taken from the FTC’s fact sheet, “Medical
Billing Business Opportunity Schemes”)
returned to you; and originals. Send correspondence
• substantiation for any claims by certified mail-and request a i:cpcic/facts/medbo254 7/00
about your earnings potential return receipt-to document what
the company received.