I get calls, emails, and messages every day from techs and there are 5 main questions they have about starting their own mobile ultrasound business. In this episode, we chat about startup costs, how to set up the business, radiology, and quite a few things in between!

Transcript:

Jen (00:01):
Hey, hey, and welcome to the Talking Tech Podcast, the sonographer’s guide to entrepreneurship. I am your host, Jennifer Lindsey. We get calls, emails, and messages every single day from ultrasound techs across the country who are sick of taking calls, working crazy hours, feeling underappreciated, and they’re just looking to branch out on their own. And honestly, in light of recent events associated with this crazy pandemic we are all 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 shying away from doing something on your own. This has fueled your fire, and I love that. One of my favorite things to do is chat with techs and hear about their hopes, dreams, and goals for their own business.

(01:03)
I talk with people in all areas of the process, so some are just starting to research. Others have been thinking about this for a long time and are ready to hit the ground running. So no matter what stage you’re in, if you have relied on Google to help you, you know that it is a lost cause because it is so hard to research anything about starting this business; that information just isn’t in one place. The legal rules and regulations are confusing, and figuring out the best way to start a business is also confusing. And so when people are trying to search for things online, they usually stumble across our website or social media and realize they finally found someone who can help. I love these calls because it gives me a chance to learn more about where that person’s at in the process and, of course, be able to answer the questions they’ve got about that are swirling around in their mind about starting their own mobile ultrasound business.

(01:58)
And usually, it is a big 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 at how confusing it can be. There’s so much information out there; part of the problem is you don’t know what you don’t know. So today, I will dive in a little and go over the five main questions we get asked daily about starting a mobile ultrasound business. And hopefully, this will shed some light for you. I’m going to tell you at the end of the podcast too, where you can go to schedule a call with me so we can chat about your dream business.

(02:40)
All right, so let’s get started. Question number one, how do I get the business set up? Do I have to get credentialed with insurance? And how do I get paid as the mobile ultrasound provider? So this is a great question to think about in the beginning, and I hear it all the time from techs I chat with. I’m going to start my business, and I plan to bill insurance. Okay, great. So my next question to them is, did you realize that you can’t bill insurance as a network provider until they credential you? And most of the time, I hear crickets on the other end of the phone because this stuff is so confusing. These are the 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.

(03:27)
Medical insurance is one of the most confusing things I’ve ever studied. And what I love about the business of providing mobile ultrasound services out in the physician practice is that we are helping to create a more cost-effective way for patients to access care. So let me explain, and you might want to get a pen and a piece of paper out because you’re going to want to take notes on this. So a couple of the things I find so interesting that a lot of people don’t realize, honestly, even a lot of the physicians that we work with through our own mobile business don’t realize this, is that our setup, providing services inside the physician practice saves patients money, even the patients with insurance. Okay, so consider this. Let me explain a little bit further. So most patients have an 80-20 insurance plan, right? So, once they reach their deductible, insurance pays 80% of covered expenses, and the patient covers 20% as their co-insurance portion.

(04:26)
So to break that down just a little bit, if an allowable for an ultrasound was a hundred bucks, just to make the math easy for me, the doctor would get a check from insurance for $80, which is 80% of the hundred dollars allowable, right? And the patient would then owe the physician’s office $20 or 20% of that $100 allowable for that 80-20 plan. The allowable that insurance and Medicare pay to a physician is significantly less than the allowable they pay the hospital. So, for example, an ultrasound at the hospital could easily have an allowable of $1,000. That exact same ultrasound at their physician’s office may have an allowable closer to $150. Yes, you did hear that correctly. 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 having an 80 20 insurance plan, if a patient pays 20% of a thousand dollars, their out-of-pocket expense is 200 bucks.

(05:32)
When the patient pays 20% of $150 at the physician’s office for the same ultrasound, their out-of-pocket is 30 bucks. So if you were a patient, would you rather pay $200 or $30 for the same thing? Not to mention the patient seen at the hospital is also going to get an extra bill for the interpretation. So that $1,000 allowable does not include the interpretation. I’ve seen these types of numbers over and over and over again over the last 16 years, and the fact that as a mobile ultrasound provider, we can go help patients gain access to affordable healthcare while adding additional revenue to our physician clients practice is the exact way we like to do business win-win for everyone. Okay, so now that we’ve chatted a bit about how insurance works for the patient, let’s get back to the best way to initially set up your business with that in mind.

(06:28)
So when you set it up in the scenario where you, as the ultrasound provider, are planning to bill insurance directly, you have to purchase your ultrasound equipment and pay to have a medical director, just to name 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. That information, the physician’s information, the medical director’s information, and the serial number for your machine has to be on that initial paperwork. So you’ve got to get that stuff first. Fill out the paperwork, send it in, and yes, they can deny your application and tell you that they don’t need any further providers in your area. So you are paying for equipment and a medical director, and you can’t bill insurance sometimes for months. I’ve seen it take almost a year to finalize with some insurance companies.

(07:18)
So the best way to get around this is to set your business up initially with a service fee model. You’ve probably heard me talk about this before. So in this scenario, your physician client bills insurance because they’re already in network, and you charge a service fee to the physician practice for providing ultrasounds in their office. If you want to bill insurance, you can always be working on the paperwork necessary for this while bringing in revenue to your business instead of having that equipment sit and wait on someone else’s timeline. Please remember that detailed healthcare attorney-crafted contracts are needed to comply with this setup. It’s the way we started our business, and please know that you don’t ever have to get credentials with insurance if you don’t want to. We didn’t do any credentialing until we were probably 12 years into our business.

(08:10)
So for 12 years, we only provided services on a service fee basis. So this is just our suggestion for those of you looking to bill insurance; we suggest getting things set up with a service fee model first. That way, you can make money while waiting on the credentialing. And then, when you go out to those physician practices to market, you would have two options if they want a bill, awesome. You use a service fee contract for them, they pay you, and they bill insurance, but you may have other offices that say, I’d love for you to bill, and then you’d have two options for them when you go out to market. All right, question number two, how do I find radiologists and cardiologists to read my physician’s studies for those doctors that can’t interpret their own? Okay, so there are many telemedicine groups out there, happy to provide these services, and there are a few things you’ll want to determine when you’re looking at that.

(09:06)
So you’ll definitely want to look at upfront costs and monthly minimums. Most vendors in the medical industry look at read volume. When looking at pricing, it costs the vendor quite a bit to onboard new clients and so to keep providing services each month, so you know, most will have an associated minimum connected with their services. Another really important thing to think about is how they anti-markup rules with Medicare are a major player when it comes to interpretation. So you’ll need to make sure your radiology group can carve out the Medicare fee or be able to 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 the anti-markup rule a bit for you in a nutshell. So ultrasound has two components: the technical component, which is the actual provision of the ultrasound itself.

(10:04)
And the easiest way, I think to remember this is that this part is the part that the tech does, the technical component, the actual ultrasound, and then the second part is the professional component, which is the actual interpretation of the study. If you work with a physician who can read their own studies, they’ll bill for the entire ultrasound. So both the technical and the professional component, which together is called the global amount. But more often, you’ll probably 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 states that if a visiting physician cannot read their own studies and they need to purchase that study from another physician, they cannot legally mark up the study and profit on the interpretation portion.

(10:55)
I know that’s a little confusing. So let me give you an example here. So in Indiana, the professional component allowable for Medicare for an Echo is around 68 bucks or so, but our cardiologists only charge $45 for the read. So if the referring doctor were to send into Medicare and say, I want $68 back for my interpretation portion for the echo, but their cardiologist only charged that doctor $45 for the read, that referring doc then is making a profit of 23 bucks. And Medicare states this is not allowed. So the easiest way to comply with this rule is to have the cardiologist or radiologist bill Medicare directly for the professional component. So your doctor client bills Medicare for the technical component, the ultrasound done in their office, the radiologist or cardiologist bills Medicare for the professional component, or they read the part they did.

(11:57)
And that way, no money changes hands between the physicians. This is one of the things we are so proud to be able to provide our students because the groups we use have no upfront costs, no monthly minimums, and they can bill Medicare directly for the interpretation. So that’s pretty cool. All right, question number three, what’s my first step? Should I buy my ultrasound machine right away? So this is the best part about setting things up as a service fee model initially is that you can wait to lease or purchase that equipment until you’re ready to start that first account. That way, you can use the revenue you’re 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 just about seven to 10 days or so.

(12:52)
So it’s a quick turnaround time and gives them the latitude to wait to finalize that lease or purchase when they’re ready to get that first account going. All right, question number four, how much does starting a mobile ultrasound business cost? This is such 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 when you look at any option of starting your own business in any industry across the board. So the average small business startup costs across the board in industries all over the place are about $30,000. Now hold on a second before you cringe at that number because I’ve got some good news coming now with attorney fees; doing this on your own with attorney fees, training, documentation, creation, all the millions of other things you’ll need, that amount is pretty close to accurate for this business.

(13:46)
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, frustrating, super costly, and time-consuming because we had to wait to see which ideas we had worked on and which didn’t. So that’s why we 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 startup cost 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 haven’t checked out the newly updated course options, check them out on our website.

(14:39)
Our website again is aic-ultrasound.com. Click on the course link; I’ll give you all our updated ones. All right, so kind of tagging along with what it costs to start a business? Question five, then, is, how much revenue can I generate? And I’ve done some specific information on our podcast and blog about this, but let me review this again. So the industry average charge for providing mobile ultrasound services is about $125 an hour. Now, we suggest setting out blocks of time at your client offices so that you aren’t driving around all over creation, doing one ultrasound here, two ultrasounds there, when they know you’re coming in, let’s say every week on Tuesdays, for example, the office books their ultrasound patients into that particular time slot. You show up and provide the services. Easy peasy on everybody. All right, so let’s do a little math here.

(15:31)
So at 125 an hour, a half-day or four-hour time slot is $500 in gross revenue, and a full day or an eight-hour time slot is a thousand bucks in gross revenue. This is the total gross back to your mobile ultrasound company for providing those services in their office. And it’ll take some time, of course, for you to build up those accounts to five days per week. But adding that out at 20 working days a month at a thousand dollars a day is $20,000 a month. So with such a low overhead, this is the way to start this business. Now, different areas of the country are going to differ as far as the amount to charge. Some will be a bit less, others a bit more, but that $125 an hour is a great average to do your initial revenue analysis when you’re starting this business.

(16:18)
And the best part about this setup is that due to the stark and anti-kickback laws, physicians are not legally able to make any profit off of patients. They’re referring out to the hospital or imaging center. So when they’re sending patients out offsite for their imaging, they are not legally allowed to get any kind of kickback, revenue, or anything from those locations. So all they get back from them is a report. So you are bringing in an opportunity for the physician to make revenue from something they are already ordering. At the same time, your company does 99% of the work, saving the patient a ton of money instead of going to the hospital for their scan. So not only is it a win-win, it’s a win-win for all parties involved, for you, the physician, and the patient. But again, remember, this has to be set up correctly.

(17:09)
The laws governing this setup are strict, and many of them exist. So you need to ensure your service con contract is set up to carve out all of the exceptions in the laws that pertain to providing mobile ultrasound services inside a physician’s practice, and it’s got to be set up by a seasoned healthcare attorney. We are just so grateful to be able to provide these contracts to our students. Okay, friends, there you have it. These are the five most asked questions I get regularly, and I would love to help you answer your specific questions about starting your business. Did you guys know you can book a discovery call with me? It’s free. It allows me to learn more about where you are in the process.

(17:48):
And, of course, be able to answer any questions about how our courses might help you start reaching for those dreams and aspirations for your own business. You can find my call calendar in a couple of different places. If you follow me on Instagram or Facebook, there is a book-a-call button on the link in our profile there. Or I’ve updated our website with links to connect with me too. So you can schedule it by heading to our website, aic-ultrasound.com. That’s aic-ultrasound.com. Go over to the About page, and you’ll see multiple ways to connect with me right there under my picture. You guys, I can’t wait to hear how you will make your goals a reality. All right? Until next week, friends, stay safe, stay healthy, and keep up that positivity.