Start a Medical Claims Evaluation Business by following these 10 steps:
You have found the perfect business idea, and now you are ready to take the next step. There is more to starting a business than just registering it with the state. 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.
Check out our How to Start a Business page.
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 are the startup and ongoing costs?
- Who is your target market?
- How much can you charge customers?
- What will you name your business?
Luckily we have done a lot of this research for you.
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.
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.
STEP 2: Form a legal entity
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.
Form Your LLC
Read our Guide to Form Your Own LLC
Recommended: You will need to elect a registered agent for your LLC. LLC formation packages usually include a free year of registered agent services. You can choose to hire a registered agent or act as your own.
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!
You can acquire your EIN for free through the IRS website, via fax, or by mail. If you would like to learn more about EINs and how they can benefit your LLC, read our article, What is an EIN?.
Small Business Taxes
Depending on which business structure you choose, you might have different options for how your business will be taxed. For example, some LLCs could benefit from being taxed as an S corporation (S corp).
You can learn more about small business taxes in these guides:
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.
Additionally, learning how to build business credit can help you get credit cards and other financing in your business's name (instead of yours), better interest rates, higher lines of credit, and more.
Open a business bank account
- This separates your personal assets from your company's assets, which is necessary for personal asset protection.
- It also makes accounting and tax filing easier.
Recommended: Read our Best Banks for Small Business review to find the best national bank, credit union, business-loan friendly banks, one with many brick-and-mortar locations, and more.
Open net-30 accounts
When it comes to establishing your business credit, net-30 vendors are considered the way to go. The term "net-30," which is popular among vendors, refers to a business credit arrangement where the company pays the vendor within 30 days of receiving goods or services.
Net-30 credit terms are often used for businesses that need to obtain inventory quickly but do not have the cash on hand.
Besides establishing business relationships with vendors, net-30 credit accounts get reported to the major business credit bureaus (Dun & Bradstreet, Experian Business, and Equifax Business Credit). This is how businesses build business credit so they can qualify for credit cards and other lines of credit.
Recommended: Read our guide on the best net-30 vendors so you can start building business credit now, so you never have to worry about cash flow in the future. Keep in mind that poor cash flow is the #1 reason businesses fail!
Get a business credit card
- This helps you separate personal and business expenses by putting your business' expenses all in one place.
- It also builds your company's credit history, which can be useful to raise money and investment 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.
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.
Learn more about General Liability Insurance.
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.
STEP 8: Define your brand
Your brand is what your company stands for, as well as how your business is perceived by the public. A strong brand will help your business stand out from competitors.
If you aren't feeling confident about designing your small business logo, then check out our Design Guides for Beginners, we'll give you helpful tips and advice for creating the best unique logo for your business.
How to promote & market a Medical Claims Evaluation Business
As mentioned above, your method of marketing for this type of business needs to be specific and classy. You probably don’t want to blast potential customers with flashy ads. Have a website built, advertise in some local medical and legal trade publications, and focus on your track record and word-of-mouth recommendations.
How to keep customers coming back
Many customers will seek you out via search engines. Make sure your search engine optimization (SEO) on your website is generating the leads you need, and create an easily navigable website with a FAQ section and a method for contacting you directly.
Once customers have met with you, create a dialogue with them to explain next steps. Clients want to remain in the loop. When a case concludes, ask them for testimonials to include on your website.
Still unsure about what kind of business you want to start? Check out the latest Small Business Trends to help inspire you.
STEP 9: Create your business website
After defining your brand and creating your logo the next step is to create a website for your business.
While creating a website is an essential step, some may fear that it’s out of their reach because they don’t have any website-building experience. While this may have been a reasonable fear back in 2015, web technology has seen huge advancements in the past few years that makes the lives of small business owners much simpler.
Here are the main reasons why you shouldn’t delay building your website:
- All legitimate businesses have websites - full stop. The size or industry of your business does not matter when it comes to getting your business online.
- Social media accounts like Facebook pages or LinkedIn business profiles are not a replacement for a business website that you own.
- Website builder tools like the GoDaddy Website Builder have made creating a basic website extremely simple. You don’t need to hire a web developer or designer to create a website that you can be proud of.
Using our website building guides, the process will be simple and painless and shouldn’t take you any longer than 2-3 hours to complete.
STEP 10: Set up your business phone system
Getting a phone set up for your business is one of the best ways to help keep your personal life and business life separate and private. That’s not the only benefit; it also helps you make your business more automated, gives your business legitimacy, and makes it easier for potential customers to find and contact you.
There are many services available to entrepreneurs who want to set up a business phone system. We’ve reviewed the top companies and rated them based on price, features, and ease of use.
Recommended: Find the best phone system for your business; check out our review of the Best Business Phone Systems 2021.
Start A Medical Claims Evaluation Business In Your State
Select your state below for an in-depth guide on completing each of these steps in your home state.
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.
Want to know if you are cut out to be an entrepreneur?
Take our Entrepreneurship Quiz to find out!
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.
TRUiC's YouTube Channel
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Take the Next Step
Find a business mentor
One of the greatest resources an entrepreneur can have is quality mentorship. As you start planning your business, connect with a free business resource near you to get the help you need.
Having a support network in place to turn to during tough times is a major factor of success for new business owners.
Learn from other business owners
Want to learn more about starting a business from entrepreneurs themselves? Visit Startup Savant’s startup founder series to gain entrepreneurial insights, lessons, and advice from founders themselves.
Resources to Help Women in Business
There are many resources out there specifically for women entrepreneurs. We’ve gathered necessary and useful information to help you succeed both professionally and personally:
If you’re a woman looking for some guidance in entrepreneurship, check out this great new series Women in Business created by the women of our partner Startup Savant.
What are some insider tips for jump starting a Medical Claims Evaluation Business?
If you have ties to either the medical or insurance fields, maintain those connections. They may serve you well in procuring solutions or answering difficult policy questions. They can also recommend your services to potential clients.
Find a legal team which specializes in insurance and medical claims cases to partner with. As a consultant for legal proceedings, you will not only receive decent compensation, but you can generate future client calls.
Advertise — but do it tastefully. You want people to know what you do, but you don’t want to appear predatory or connected with predatory legal behavior. You are a professional, so advertise in professional publications.
How and when to build a team
Many medical claims evaluators work solo. As you gain more clientele and have a proven track record, you may want to consider moving into an office space and bringing in some assistants.