How to Start a Medical Claims Evaluation Business

Start a Medical Claims Evaluation Business by following these 10 steps:

1. Plan your Medical Claims Evaluation Business
2. Form your Medical Claims Evaluation Business into a Legal Entity
3. Register your Medical Claims Evaluation Business for Taxes
4. Open a Business Bank Account & Credit Card
5. Set up Accounting for your Medical Claims Evaluation Business
6. Get the Necessary Permits & Licenses for your Medical Claims Evaluation Business
7. Get Medical Claims Evaluation Business Insurance
8. Define your Medical Claims Evaluation Business Brand
9. Create your Medical Claims Evaluation Business Website
10. Set up your Business Phone System

We have put together this simple guide to starting your Medical Claims Evaluation Business. These steps will ensure that your new business is well planned out, registered properly and legally compliant.

Exploring your options? Check out other small business ideas.

STEP 1: Plan your business

A clear plan is essential for success as an entrepreneur. It will help you map out the specifics of your business and discover some unknowns. A few important topics to consider are:

• What will you name your business?
• What are the startup and ongoing costs?
• Who is your target market?
• How much can you charge customers?

Luckily we have done a lot of this research for you.

What will you name your business?

Choosing the right name is very important. Read our detailed guide on how to name your business. We recommend checking if the business name you choose is available as a web domain and securing it early so no one else can take it.

What are the costs involved in opening a Medical Claims Evaluation Business?

Medical claims evaluation businesses can operate with extremely low overhead costs. Many evaluators will work out of their homes. Equally, much of the correspondence and research regarding policies and claims can be completed online. You’ll need internet and phone service, but you probably won’t need much in the way of office materials.

You should probably create a company website to help potential clients understand what you can offer. It will also serve as a hub for communications or FAQs.

You’ll also want business insurance of your own, as well as an LLC or other business filing, and any licensing, permits, or certifications needed to operate in your state.

What are the ongoing expenses for a Medical Claims Evaluation Business?

Ongoing expenses can be minimal. You’ll have to determine if you have annual fees for operating such a business in your particular state, and you will need to renew your business insurance annually. You'll also need continued phone, internet, and website hosting services.

Who is the target market?

Medical claims evaluation can affect all age ranges. Your most likely individual clients will be those with extensive medical histories.

If you are working for insurance companies, consider smaller businesses who may not have a large legal team to handle claim evaluations.

How does a Medical Claims Evaluation Business make money?

Medical claims evaluators make money from the fees charged for client consultations. Evaluators may have a standard flat rate, an hourly rate, or a combination of both.

How much can you charge customers?

Medical claims evaluators often charge by the hour. Their average price is just under $20 per hour when starting out.

How much profit can a Medical Claims Evaluation Business make?

A 40 hour week at $20 per hour equates to $800 per week.

How can you make your business more profitable?

If you are experienced with legal documents, paperwork, and proceedings, you can also pursue legal evaluations to determine the strength of a client’s potential case.

STEP 2: Form a legal entity

The most common business structure types are the sole proprietorship, partnership, limited liability company (LLC), and corporation.

Establishing a legal business entity such as an LLC or corporation protects you from being held personally liable if your Medical Claims Evaluation Business is sued.

You can form an LLC yourself and pay only the minimal state LLC costs or hire one of the Best LLC Services for a small, additional fee.

STEP 3: Register for taxes

You will need to register for a variety of state and federal taxes before you can open for business.

In order to register for taxes you will need to apply for an EIN. It's really easy and free!

There are specific state taxes that might apply to your business. Learn more about state sales tax and franchise taxes in our state sales tax guides.

STEP 4: Open a business bank account & credit card

Using dedicated business banking and credit accounts is essential for personal asset protection.

When your personal and business accounts are mixed, your personal assets (your home, car, and other valuables) are at risk in the event your business is sued. In business law, this is referred to as piercing your corporate veil.

Open a business bank account

Besides being a requirement when applying for business loans, opening a business bank account:

• Separates your personal assets from your company's assets, which is necessary for personal asset protection.
• Makes accounting and tax filing easier.

Get a business credit card

Getting a business credit card helps you:

• Separate personal and business expenses by putting your business' expenses all in one place.
• Build your company's credit history, which can be useful to raise money later on.

STEP 5: Set up business accounting

Recording your various expenses and sources of income is critical to understanding the financial performance of your business. Keeping accurate and detailed accounts also greatly simplifies your annual tax filing.

Make LLC accounting easy with our LLC Expenses Cheat Sheet.

STEP 6: Obtain necessary permits and licenses

Failure to acquire necessary permits and licenses can result in hefty fines, or even cause your business to be shut down.

STEP 7: Get business insurance

Just as with licenses and permits, your business needs insurance in order to operate safely and lawfully. Business Insurance protects your company’s financial wellbeing in the event of a covered loss.

There are several types of insurance policies created for different types of businesses with different risks. If you’re unsure of the types of risks that your business may face, begin with General Liability Insurance. This is the most common coverage that small businesses need, so it’s a great place to start for your business.

Another notable insurance policy that many businesses need is Workers’ Compensation Insurance. If your business will have employees, it’s a good chance that your state will require you to carry Workers' Compensation Coverage.

Is this Business Right For You?

Medical claims evaluators have to understand insurance policy and coverage very well. They must also be meticulous in their processes. No stone left unturned, so to speak. An individual with a background in insurance, medical billing and coding, corporate legal filings, or other jobs that work with the law can be great fits.

What happens during a typical day at a Medical Claims Evaluation Business?

Medical claims evaluation businesses spend a large amount of their time meeting with clients and reviewing the various policy coverage they have or have extended.

If working for an individual, you can take sworn depositions, research previous claims with similar scenarios, and communicate with the insurance company, hospital, or treatment clinics.

If you’re working for an insurance company, you’ll be researching the claimant’s history and whether or not their claim meets the insurance company’s criteria.

Additionally, office paperwork filings, clientele communications, billing, scheduling meetings, and meeting new clients can all be part of your day.

What are some skills and experiences that will help you build a successful Medical Claims Evaluation Business?

As mentioned above, this job demands an eye for detail, a strong grasp of the law, and a background in insurance, medical billing, or both.

Small business management experience and strong secretarial skills will also help a person looking to break into this field.

What is the growth potential for a Medical Claims Evaluation Business?

Medical and insurance billing is a big business. Helping clients to grasp their legal standings becomes an important task within this realm of business. And with an ever-shifting landscape of policy and coverage changes, businesses and individuals, alike, will need the services of a professional claims evaluator. As an industry, it seems poised to continue steadily growing and mirroring the growth of the medical and insurance industries.