Medical billing services: growth is spurred on by changes in the health care industry ad the data revolution.

In 1993 about 6 billion medical claims were processed, burying physicians and health care providers under a deluge of paperwork This forced many medical professionals to outsource their billings and collections to companies capable of wading through numerous insurance codes and government regulations. Electronic medical billing services has proved to be a viable business opportunity for companies with experience in accounting, provider billing and computer systems.

Electronic medical billing services read patient claim forms, inputs the data according to complex coding systems and then submits the forms via computer to major clearinghouses. The clearinghouses then bill the patients or the insurance companies, who, in turn, pay the physicians.

Armed with 14 years, experience in hospital medical billings and a $5,000 investment, Vanessa Best began Precision Health Care Consultants in Jamaica Estates, New York, in 1995. A physician at the hospital where she was employed was leaving for private practice and Best persuaded him to retain her medical billing services - for $1,200 a month. Best's business now earns $38,000 annually. In addition, she was recently employed as a consultant to help launch the medical billing division of the Fidelity Group, a $8.5 million African American-owned insurance, benefits and medical management company in Great Neck, New York.

For new entrants to the industry, home-based medical billing businesses generally net $30,000-$100,000 a year. Most billing services receive $3 per claim processed; of this, a claims clearinghouse generally takes a fee. After a claim is processed, it takes about two to three weeks for a physician to receive his or her money, and depending on the payment terms, another 30 days before the client pays the billing service.

To get started in the business, you'll need a computer, fax machine and a medical-billing software package that meets claim requirements for Medicaid and Medicare. Generally, you can start with as little as $5,000. After a couple of years in the field, you may want to become certified. Certification, which is provided through groups like the National Association of Claims Assistance Professionals (NACAP), is voluntary in most states.

If you're interested in attracting physicians to your service, "you can't be trite or cute," says Norma Border, national director of NACAP. A small business owner, she emphasizes, must demonstrate professional slickness - from the physical presentation to marketing materials. "You have to be aggressive, meticulous, detail-oriented and willing to keep abreast of the constant changes in the health care industry.

Each year, about 15%-20% of small businesses providing medical billing services drop out of the industry, Border estimates. Many of them don't understand the degree to which clients will rely on them for accounting, consulting and analysis. In addition to filing, medical billing services also provide scheduling activities, special reports and profiling - helping physicians determine which services are performed most often.

Medical billing services is a growing industry that can provide you with significant financial rewards. But be warned that it's extremely competitive, and requires aggressive marketing. If you're trying to break into the field, Best suggests seeking out new physicians who are looking to set up private practices and placing ads in local newspapers. "And if your clients are pleased," she says,"they'll refer you by word-of-mouth."

For additional information, contact: National Association of Claims Assistance Professionals, 5329 S. Main St., Suite 102, Downers Grove, IL 60515-4845; or www.nacap.org.