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A practice doing seven figures a month switches billing companies, and eighteen months later the denial rate is higher than the day they signed. Nobody lied. Both sides just walked in with a different picture of what good looked like. In this episode we run Alex Hormozi's value equation across a billing partnership, one variable at a time, and name exactly what each side owes the other.
Dream Outcome. A practice owner hears "we will improve your collections" and pictures denials dropping from 12 percent to 5, AR days under 35, and her team off the payer portals on Friday afternoons. The billing company is picturing a 3 to 5 point net collection improvement over twelve months. Both are honest. Neither is the same outcome. The fix is a written, numeric definition of success before the contract is signed.
Perceived Likelihood. The billing partner builds this with evidence: before-and-after denial rates in your specialty, AR trending over twelve months, retention data. The practice builds it with an honest read on its own history. A practice that says "our front desk eligibility rate has been inconsistent and we are ready to fix that" is a fundamentally different partner than one expecting the problem to be solved without any practice-side change.
Time Delay. Month one is almost entirely old AR, because new claims will not generate cash for 30 to 45 days. That is not a performance problem, it is how billing cash flow works. But if nobody said it before the relationship started, month one feels like nothing is happening. The ramp has to be mapped out loud, before the contract, not defended at the 60-day mark.
Effort and Sacrifice. Chart closure inside 24 to 48 hours. Eligibility verified before the visit. Patient balance expectations set at scheduling. A billing company can recover denials, but it cannot recover a claim that was never submitted because the chart was never signed. And on the other side: complete ownership of denial follow-up, a report a physician can read, and problems raised before they compound.
THE SHARED VALUE EQUATION
Dream Outcome. Practice: defines it specifically and measurably upfront. Billing partner: maps a realistic written path to it before the contract is signed.
Perceived Likelihood. Practice: consistent operational inputs, charts closed, front desk disciplined, patient balances engaged. Billing partner: track record, transparent reporting, accountability on their own performance.
Time Delay. Practice: patience through the 90 to 180 day ramp and commitment to the agreed timeline. Billing partner: weekly visibility, a clear map of the transition, no black boxes.
Effort and Sacrifice. Practice: willingness to change what needs changing on their side of the operating model. Billing partner: making their side of the change as easy as possible and owning it completely.
THREE ACTIONS THIS WEEK
Write down three to five specific, measurable targets that would tell you the relationship is working. Denial rate. AR days. Net collection rate. Chart closure rate. Clean claim rate.
Ask any prospective partner for before-and-after data from three practices in your specialty at a similar volume, and ask to speak with them directly.
Get the month one, month two, month three ramp in writing before the relationship starts, and reference it at every monthly review.
EPISODE BREAKDOWN
The switch that made things worse | The value equation and why every variable has two sides | Dream Outcome | Perceived Likelihood | Time Delay and the honest ramp | Effort and Sacrifice | Three things to do this week
Resources block
FREE: EMR / PM Evaluation Framework, https://eligibility.natrevmd.com/emp/pm-evaluation-framework
FREE: Practice Revenue Leak Scorecard, https://eligibility.natrevmd.com/nrm-revenue-scorecard-v3
Everything else we have built, in one place: https://natrevmd.com/trusted-resources/
Referenced in this episode: $100M Offers by Alex Hormozi
Part 2 of this series, EP201 The Shared Operating Model: https://natrevmd.com/podcast/