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Exploring Different Payment Models for Medicaid Billing Vendors in K-12

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Medicaid’s implications for your school’s bottom line make it one of the most consequential programs for K-12. It’s also one of the only funding sources that many schools are not fully tapping into. That’s why having support from a Medicaid billing vendor can make such a big difference for schools. And with so many different vendors to choose from, schools are faced with decisions that feel just as consequential as the Medicaid programs themselves.
One of the first differences you’ll encounter as you begin to research Medicaid vendors is the way they bill your district for the software. And that’s exactly what we’ll be discussing today.

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Traditional Software as a Service (SaaS) Billing

In traditional SaaS billing, your Medicaid billing vendor will bill you on an annual basis as well as bill for initial implementation of the software as a one-time cost. Larger districts often benefit most from this payment model.
The Pro’s: This payment model provides an up front, reliable cost that allows your finance department to incorporate in long-term planning. Additionally, if your district’s reimbursements increase, you won’t be expected to pay your vendor more. Instead, you’ll get to keep that entire reimbursement.
The Con’s: The up front cost for this style of service can appear larger at first.

Contingency Fee-Based Billing

Another option is one in which your vendor bills your district based on your reimbursement amount. It’s likely that there is still an implementation cost associated with this option.
The Pro’s: This model can have a smaller up-front cost.
The Con’s: The actual payment amount that your vendor bills you on can be harder to plan for, which can be harder for your finance department. Also, this option requires a high level of trust between you and your chosen vendor. Since your vendor only makes money based on what is billed to Medicaid, there is a chance that they will bill Medicaid for services that don’t actually qualify.
The Centers for Medicare and Medicaid Services released a comprehensive guide to claims, and page 72 of the guide discusses contingency fee-based billing in some detail.

Your Choice, Your Reimbursement

Regardless of your choice in Medicaid billing vendor and how they bill you for the software, you should have visibility into your claims, and there should be transparency around what happens to your claims. If you’re unsure about how transparent your current vendor is, you might enjoy this quiz.
Beyond billing, you should be able to turn to your vendor for support with your cost report, and you should be able to feel confident that your claims will withstand a potential audit.
Frontline is here to help you maximize your reimbursement and ensure that every claim can withstand an audit. See it in action here.