Anastasia Kryzhanovska

How Much Does it Cost to Create a Custom Medical Billing Software?

, , software for hospital billing , medical billing software

Medical billing software is now an essential part of the healthcare business, be it hospitals or individual practices or insurance companies. It automates the whole process, making it so much easier to keep track of payment information, sending medical claims on time, and more.

In this article, we are going to get into details of how to create a medical billing software system and how much does medical billing software cost.

Medical Billing Software: Key Information

Whether it is developed for an enterprise or a small practice, custom software for medical billing requires a number of features that simplify communication between patients, hospitals and insurance companies regarding finances. These include claim management, eligibility checking (monitoring patient’s insurance status), payment charging, keeping patients’ profiles and many other important things.

Medical billing process

Main Features

Complex programs like offline and web-based medical billing software require a set of features to enable the administrative and financial parts of the system:

  • Patient profiles. Personal profiles for each patient with all the necessary information, including ID, insurance details, medical records, transactions history, billing address.
  • Claims management. It automates sending and receiving of all the claims, making this process fast and easy. It should also include claims re-submitting functions.
  • Eligibility verification. This helps hospitals automatically check a patient’s insurance status, letting the hospital know if their insurance company will accept the claim and if the insurance is not expired.
  • Billing and payments tracking. Medical software takes care of all accounting related to payment procedures, like invoicing, including keeping track of all the appointments and procedures a patient had.
  • History of patient activity. The software keeps track of everything in a patient’s profile, including all health-related information, treatment records, specialists they visit, prescriptions, diagnoses, etc.
  • Payment reminders. Reminding patients about bills that are still due or that their insurance is about to expire should be automatic.
  • Bill templates. Having templates for all the types of bills that could be issued is very handy as well.
  • Auto-backups. Any lost information can cause damage, so you should ensure automatic backups, as well as:
    • Data security. Patient information is highly sensitive, so you need to make sure the database with private details is stored safely and securely.
    • Storage devices or cloud. Auto-backups would enable downloading data to hard drives or the cloud in case of custom cloud-based medical billing software.
    • Data encryption. Security can be managed by encrypting all sensitive customer information so that it could only be accessed with a key.

With custom software development, you can design a system that fits your business goals and vision. However, these features are recommended for a fully functioning medical billing system.

Medical Billing Software Development and Cost

Creating online software for hospital billing is not a simple process that requires thorough planning and attention to detail. Some of the key factors you should consider in pre-development stages are:

  • Security.

Medical billing software deals with confidential personal data, so you need to think of ways how you are going to protect this information. Auto-backups and data encryptions are some of them. This also includes compliance with data protection policies, such as the GDPR or HIPAA.

  • Coordination with insurance carriers.

Make sure the new system will be integrated with insurance carrier networks to simplify eligibility verification.

  • Storage.

This includes the types of information you are going to gather and store, as well as where you are going to store it (on your servers or cloud-based).

Pre-Development Decisions

Suffice to say, a system like that requires to be developed from scratch, so it will involve a lot of planning. Thus, the pre-development stage includes, but is not limited to deciding on the business and development aspects, such as:

  • Research. It’s best to enhance your knowledge of the industry with research and analysis of the entities involved in the process. Interviewing your potential customers (hospital officials or individual practice owners) will uncover their routine and struggles with payments. Interviewing patients might also be a good idea to understand the other side of the billing process.
  • The target audience. This type of software is made for healthcare institutions but you might want to create a system that caters solely to individual practices. In this case, your customers will have different demands compared to hospitals in terms of client base capacity or pricing policy, for instance.
  • Functional requirement. Previously, we’ve mentioned the main features that medical billing software requires and we recommend to add all of them to the basic functionality. But, depending on your business goals and vision, you might be onto some truly innovative features that will solve certain issues better than what we already have. Discovering new useful features is also a part of the pre-development, or planning, process.
  • Platform options. It might seem like a desktop version is all your future customers might need. Yet, a mobile version (Android, iOS or cross-platform) or a mobile adaptation of a web version is necessary for any application nowadays, considering the widespread use of mobile devices.
  • Design. Easy navigation, having everything at hand and easy to reach, readable fonts, pleasant colors — a lot of things play into the ultimate goal of user-friendliness.
  • Development team. If you don’t intend to hire in-house developers, the choice between freelancers and outsourcing should always lean towards an outsourcing agency. When it comes to building projects from scratch, you need guarantees that it will be supported from start to finish.
  • Roadmap. Another key step before you start developing the software is defining the tasks that need to be done, to create your product, as well as the time frames for them.
  • Budget. Evaluate your resources, see what needs to be done, estimate the cost of the development and then you can identify whether your funds are sufficient for creating a medical billing application or you need to look for investors.

Technology Stack

Another thing is choosing the technology to build software for medical billing. Web services need front-end and back-end technology to code the application along with its features.

  • Backend. For the backend, we recommend using general-purpose frameworks, such as Django, Symfony or Ruby on Rails.
  • Frontend. The best front-end development technologies are Angular, Vue, and React.
  • Storage. The primary technology you need for storage is Postgres or Mysql. Aside from that, you will also need:
    • Redis or MongoDB for cache;
    • ELK for managing logs (storing, filtering, analyzing);
    • S3 or Minio for storing documents.

We’d also recommend using Sentry to catch and fix bugs while your medical billing software code is being developed.

Medical Billing Software Cost

Developers usually charge hourly rates, regardless of whether you hire freelancers or outsource from an agency, but the cost of medical billing software also depends on the feature set, the number of developers you hire, and other conditions. Here is an estimate of what you might pay to develop medical software if you choose to outsource from a technical partner for $50/hour.

Task/features Time for development, h Approx. cost, $
Pre-development activities: planning of website application structure, finalizing requirements, server setup, continuous integration, etc. ~110 5,500
Core features development:
- User management
- CRUD functions and reminders
~100-180 5,000 - 9,000
Standard features:
- Patient profiles
- Claims management
- Eligibility verification
- Billing tracking
- Patient history
~300-400 15,000 - 20,000

The numbers are very approximate and should be discussed with your developer or technical team. You should also take into account that not all development agencies provide design services, and if you opt for freelancers, that’s an extra expense.

Testing is an integral part of the development process, but you will need to budget software maintenance after the project is complete. Not all development agencies offer support after an application is live and working, so you might need to hire a team to provide updates and bug fixes for the product.

Wrap Up

If you want to make an online medical billing software system, the cost of development will largely depend on the type of contractor you’re going to choose (freelancer or a technical partner) and the features that you want to customize your MVP with. The number and complexity of features will influence the time needed to code the functionality.

If you decide to hire a technical partner, it good to sit down for a meeting and discuss all your ideas and requirements to get more insight into the development process, advice on what technology to use, and a more accurate estimate of the project’s price.

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