The 5 most asked questions about starting a mobile ultrasound business.
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We get calls, emails, and messages every single day from ultrasound techs across the country who are sick of taking call, working crazy hours, and feeling underappreciated and are looking to branch out on their own. And, in light of recent events associated with the pandemic we are currently dealing with, we have had a flood of messages from people wanting more information on how to get things moving on their own. It makes me SO grateful and hopeful to see so many of you not only on the front lines taking care of the precious people in our communities, but instead of shying away from doing something on your own, this has fueled your FIRE and I love that!
One of my very favorite things to do is chat with techs and hear about their hopes, their dreams, and their goals for their own business. I talk with people in all areas of the process – some are just starting to research, and others have been thinking about this for a long time and are ready to hit the ground running. No matter what stage you’re in, if you’ve relied on Google to help you - you are well aware that is a lost cause. It is so hard to research anything about starting this business because that information isn’t in one place, the legal rules and regulations are so confusing, trying to figure out the best way to start the business is confusing…and so when people are trying to search things online, that’s usually when people stumble upon our website or social media and realize they’ve found someone who can actually help!
I love these calls because it gives me a chance to learn more about where that person is in the process, and of course be able to answer the questions that have been swirling around in their mind about starting their own mobile ultrasound business. It's usually a sigh of relief on the other end of the phone because by the time a tech has gotten on the phone with me, they've been researching and Googling, and trying their hardest to figure out what in the world they need to do to get an idea of how to start this business, and they've become frustrated with how confusing it can be! There is so much information out there, and part of the problem is - you don't know what you don't know. So today, I’m diving in a little and going over the 5 main questions we are asked on a regular basis about starting a mobile ultrasound business, and hopefully this will shed some light for you!
Question 1: "How do I set the business up? Do I have to get credentialed with insurance? How do I get paid as the mobile ultrasound provider"
Such a great series of questions about the setup. I hear it all the time from techs that I chat with - "I'm planning to start my mobile ultrasound business and I want to bill insurance." My next question to them is always "did you realize that you can't bill insurance as a network provider until they credential you?" And I usually hear crickets on the other end of the phone. This stuff is CONFUSING! These are statements I get so excited to hear because I know we can help people navigate the setup of their business to create a scenario that makes the most business sense for them.
Medical insurance is likely one of the most confusing things I've ever studied. What I love about the business of providing mobile ultrasound out in the physician practice is that we really are helping to create a more cost effective way for patients to access care. Let me explain. And you may want to take some notes!!
A couple things I find so interesting that a lot of people don't realize (even a lot of the physicians that we work with through our own mobile ultrasound business!) is that our setup – providing services inside the physician practice - saves patients money - EVEN the ones with insurance.
Consider this – most patients have an 80/20 insurance plan (meaning once they reach their deductible, insurance pays 80% of covered expenses and the patient covers 20% as their coinsurance portion). So, to break that down if the allowable of an ultrasound was $100 (to make the math easy!), the doc would get a check from insurance for $80 (80% of the $100 allowable), and the patient would owe the physician $20 (or 20% of the $100 allowable). The allowables that insurance and Medicare pay to a physician are significantly less than the allowables they pay the hospital.
So, for example an ultrasound at the hospital could easily have an allowable of $1000. That same ultrasound at their physician office may have an allowable closer to $150. That is not a typo. The exact SAME ultrasound can have that much of an allowable price difference between hospital and physician practice. So, using that same scenario of a patient have an 80/20 insurance plan - if a patient pays 20% of $1000, their out of pocket is $200. When the patient pays 20% of $150 at the physician office for that SAME ultrasound, their out of pocket is $30. If you were a patient, would you rather pay $200 or $30 for the exact same thing? Not to mention, the patient seen at the hospital is going to also get an extra bill for the interpretation.
I have seen these types of numbers over and over again over the last 16 years, and the fact that as mobile ultrasound providers, we can help patients gain access to affordable healthcare, while adding additional revenue to our physician client's practice is the exact way we like to do business - win/win for everyone.
Now that we've chatted about how insurance works for the patient, let's get back to the best way to initially set up your business with this in mind.
When you set it up with the scenario where you as the ultrasound provider are planning to bill insurance directly, you must purchase your ultrasound equipment and pay to have a Medical Director (to name just a few of the major expenses) while you wait for insurance companies to work through your paperwork to decide whether or not to accept you into their network. Yes, they can deny your application and tell you that they don't need any further providers in your area. So, you're paying for equipment and a physician and can't bill insurance sometimes for months on end (I've seen some take almost a year to finalize).
The best way to get around this is to set your business up initially with a service fee model. In this scenario, your physician clients bill insurance - because they're already in network - and you charge a service fee for providing the ultrasounds in their office. If you want to bill insurance, you can work on the paperwork necessary for this while you're bringing in revenue to your business instead of having that equipment sit and wait on someone else's timeline. Now, please remember, specific detailed healthcare attorney crafted contracts are needed for this to be set up compliantly. It’s the way we started our business. And, please know that you don’t ever HAVE to get credentialed with insurance if you don't want to! We didn’t do any credentialing until we were 12 years into our business, so for 12 years we provided service contract ONLY services to our community physicians.
Question 2: "How do I find radiologists and cardiologists to read my studies?"
There are many telemedicine groups out there happy to provide these services, and there are a few things you'll want to determine. You'll definitely want to look at upfront costs or monthly minimums. Most vendors in the medical industry look at read volume when looking at pricing. It costs the vendor quite a bit to on-board new clients, and to keep providing services each month so most will have associated minimums connected with their services.
Another really important thing to think about here is how they'll bill. Anti-markup rules with Medicare are a major player when it comes to interpretations so you'll need to make sure your radiology group can carve out the Medicare fee or explain in detail to your physician client how to bill appropriately if they don't do that because the consequences for breaking the laws here are substantial.
Let me explain anti-markup rules for you in a nutshell.
Ultrasound has two components to it – the technical component (which is the actual provision of the ultrasound itself – the way I remember this is that this is the part the TECH does – TECHnical component) and the professional component (which is the interpretation portion of the study).
If you work with a physician who has the ability to read their own studies, they’ll obviously bill for the ultrasound in its entirety – so the technical AND the professional components (which together are called the “global” amount).
But, more often you’ll work with physicians who can't read their own studies and they’ll need a referral for outside interpretation. Medicare has a rule called “Anti-markup” which basically states that if a physician cannot read their own studies and they need to purchase the study from another physician, they are not able to “markup” the study and make a profit on the interpretation portion.
For example, in Indiana the professional component allowable from Medicare for an echo is around $68. But, our cardiologists only charge $45 for the read, so the referring doc would make a profit of $23. Medicare states this is NOT allowed. So, the easiest way to comply with this rule is to have the radiologist or cardiologist bill Medicare directly for the professional component, your doc client bills Medicare for the technical component and then no money changes hands between the physicians. This is one of the things we are proud to be able to provide our students, because the groups we use have no upfront costs or monthly minimums and can bill Medicare directly for the interpretation. Pretty cool!
Question 3: "What's my first step, should I buy my system right away?"
This is the best part about setting things up as a service-fee model is that you can wait to lease or purchase your equipment until you're ready to start that first account! That way, you can use the revenue you are generating from your new physician client to pay the ultrasound system payments. Since this is your major ongoing business expense, it's the best way to keep those costs down initially. The turnaround time we see with our students that we help coordinate the system for through our systems division is about 7-10 days so it’s a really quick turnaround time and gives them the latitude to be able to wait to finalize the lease or purchase when they’re ready to get that first account going.
Question 4: "How much does it cost to start up a mobile ultrasound business?"
This is a crucial question! You have to know how much you'll need to have on hand, and a good idea of how much revenue you can generate when starting to look at the option of starting your own business, in any industry.
The average small business startup costs – across the board - are about $30,000 (now hold on a sec before you cringe at that because I’ve got some good news coming!) and with attorneys fees, training, documentation creation, and the million other things you'll need that amount is pretty close to accurate for this business. BUT – here’s the good news - this is why we exist. We created our courses because when we started our mobile ultrasound business no one could help us. It was hard and frustrating, super costly, and time consuming because we had to wait to see which ideas worked and which ones didn’t. We specifically created our courses so that we could have something to help other sonographers have a tried and true plan and be able to save a TON of money on the start up costs because we include nearly everything you’ll need to get up and running all in one place – contracts, legal overviews, sales and marketing training… I’m off on a rant here about it because it just makes me so excited to be able to provide such an awesome roundup of resources for our ultrasound community! If you guys haven’t checked out our newly updated course options – go take a look HERE!
Question 5: "How much revenue can I generate?"
The industry average charge for providing mobile ultrasound services is about $125/hour. We suggest setting out blocks of time at your client offices so you aren't driving around all over creation doing one ultrasound here and two ultrasounds there...when they know you're coming in every week on Tuesdays for example, the office books all their ultrasound patients into that particular time slot, you show up and provide the services. Easy peasy.
Let's do a little math here. AT $125/hour, a half day (4hr) time slot is $500 in gross revenue and a full day (8hr) time slot is $1000 in gross revenue. This is then the total gross back to your mobile ultrasound company for providing the services in their office. It will take some time to build up those accounts to 5 days per week, but the average monthly revenue back at full capacity then with an average of 20 working days a month is $20,000 per month. With such low overhead, this is really the way to start this business.
Different areas of the country will differ as far as the amount to charge, some will be a bit less and others a bit more, but $125 is a great average to do your initial revenue analysis on. And the best part about this setup is that due to Stark and Anti-Kickback laws, physicians are not legally able to make any profit off of patients they are referring out to the hospital or imaging center. So you're bringing in an opportunity for the physician to make a revenue off of something he or she is already ordering, while your company does 99% of the work. AND it saves the patient a ton of money as opposed to going to the hospital for their scan, so it's not a only a win/win, it's a win/win/win for all parties involved!
BUT again, it has to be set up correctly! The laws governing this setup are strict and there are a lot of them. You need to ensure your service contract is set up to carve out all of the exceptions in the laws that pertain to providing mobile ultrasound services inside a physician practice, and it’s GOT to be set up by a seasoned healthcare attorney. We are SO grateful to be able to provide these contracts to our students.
Ok friends, there you have it. The 5 most asked questions that I get on a regular basis. I’d LOVE to help you guys answer your specific questions about starting your business! Did you know you can book a discovery call with me? It’s totally free – it allows me to learn more about where you’re at in the process and to of course be able to answer any questions about how our courses might be able to help you start reaching for those dreams and aspirations for your business. You can find multiple ways to connect with me HERE on our website under my picture, and if you click the calendar icon you can book a call with me!
I Can’t WAIT to hear about how you’re going to make your goals a reality. Until next week friends, stay safe, stay healthy, and stay positive.