Medical Practice Strategy
You can assess the collection rate over different time periods, such as a month or a year. But within that time period, you’ ll be able to see how much revenue was recognized and compare that to the rates associated with each service provided. If you expect to see $ 100,000 in revenue over a one-month period, but only $ 80,000 came in, then your collection rate is dangerously low at 80 %.
Healthy practices should target a collection rate of 95 % or higher. Losing out on more than 5 % of the payments owed can quickly impact a provider’ s ability to continue servicing his or her patients.
Denial Rate: Are Claims Being Processed?
If you serve patients who have insurance, then you’ ll need to look at your denial rate on a regular basis.
The denial report flags and details any claims that have been denied by insurance companies. It can also provide insight into the best way to appeal the denial or resubmit the claim.
Many times, claims are denied because of a mislabeled billing code or a clerical error. Other times, claims might be denied because of missing documentation or further questions from the insurance provider. By tracking the denial rate of your practice, you can also get a better look into why an insurance provider isn’ t reimbursing the amount owed.
In 2021, roughly 1 in 5 claims were denied, making a denial rate of about 17 % the industry average. However, overall denial rates varied widely, fluctuating based on the insurer involved. As a provider, aim for a denial rate of less than 10 %— the lower the better.
Remediation Tactics: Spotting Signs Of Trouble And Making Improvements
Your practice’ s ability to continue working with patients directly correlates to the health of key metrics such as the ones we’ ve discussed above. By understanding these average benchmarks, you can establish your own goals for each metric, going above and beyond the industry offerings. If you start to notice performance slipping, we’ ll give you a helpful way to improve each metric:
Accounts Receivable Aging
If too many outstanding balances are sitting unpaid for 90 days or more, your cash flow will suffer, making it hard for you to pay bills, make payroll, and cover unexpected costs. When you start to notice more than 20 % of your invoices sitting in the 90 + days bucket, consider implementing a stronger collections practice. Dedicate a staff member who can notify patients and insurance companies of overdue balances. Often, a more stringent process internally can result in better outcomes here.
Collection Rate
Performing services and failing to collect payments for them is the same as working for free. Consider automating your payment reminder process for individual payees. With a helpful text or email system
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that alerts patients of balance due dates, you can boost your collection rate while mitigating the risk of bad debt.
Denial Rate
Sometimes, denied claims are out of your control. Remember, insurance companies don’ t want to pay if they don’ t have to, so they’ re always looking for a valid reason to hit“ deny.” Don’ t give them one. Your medical billing provider can help you bolster claim documentation, verify the validity of billing codes, and advocate for denial reversals. Working with a team of specialists is the best way to lock in a low denial rate without adding more work to your plate.
REFERENCE
https:// www. invensis. net / blog / important-medical-billingreports # 1-aging-report
https:// curebill. com / how-to-read-medical-billing-reports-likea-pro /
https:// allegiancercm. com / understanding-medical-billingreports-what-every-provider-should-know /
https:// www. medicalbillersandcoders. com / blog / accountsreceivable-how-to-read-a-complicated-ar-report-very-easily /
https:// starbillingsolutions. com / blog / net-collection-rate /
https:// www. coronishealth. com / blog / medical-billing-processgross-vs-net-collection-rate-explained
https:// unislink. com / rcm-best-practices-blog / medical-practicehow-to-track-days-in-a-r /#:~: text = The % 20industry % 20 benchmark % 20for % 20health, days % 2C % 20well % 20above % 20 industry % 20norms.
https:// www. usnews. com / news / health-news / articles / 2024-12-11 / how-often-do-health-insurers-deny-patientclaims
https:// www. experian. com / blogs / healthcare / healthcare-claimdenials-statistics-state-of-claims-report /
https:// www. aptarro. com / insights / us-healthcare-denial-ratesreimbursement-statistics
The Ultimate Hack? Medical Billing Specialists
At Quick Claimers, helping medical practices achieve key billing metrics is our passion. Providers come to us when they’ re struggling with a spike in denial rates or a growing number of overdue balances. We’ ll take a look at the billing metrics, provide a go-forward strategy, and help our clients get to a place where monitoring monthly billing reports is no longer stressful.
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