Have you looked closely at your insurance aging report? How long is it taking to get your claims paid- 30, 60, 90, 120 or more days? But are your reports accurate? Just because you are getting paid does not mean you are not leaving lots of real money on the table.
The most effective way to gage the productivity of your billing staff is by checking to see what your accounts receivable is over 120 days. But what is a good percentage? The Medical Group Management Association (MGMA) puts out a yearly report benchmarking the 120-day aging bucket based on the type of medical specialty. Compare your 120-day aging bucket to the MGMA benchmark of 17.7 percent for the average practice. What is your figure for outstanding claims over 120 days old? Are your figures better or worse? If worse, you have serious problems in your billing department or your medical billing company. If better, great—but let’s take a closer look. There may still be a problem.
There are two ways your practice management system and staff can calculate your aging of accounts receivable. Some systems will calculate the aging based on when the insurance is billed. The problem here is that any time you re-bill insurance; the aging clock starts over again. A 160-day-old claim can be reset to look as if it is current. Here is an example of what I mean: A patient comes in on June 1, insurance denies on July 1, insurance is then re-billed with an appeal on August 1. In this case, the aging will be based on the August 1 re-bill date, not on June 1. Not only does this method not produce accurate accounting, but it may be masking serious issues with your billing staff.
Do you routinely mass re-bill? Remember, the aging clock starts again. If you were to run an aging report right after those claims were re-billed, they would not show up as old, but as current. Your report would look very good, and it would seem as though your medical billing department was doing a fantastic job, when in reality they may not be, and you are losing money.
The correct way to calculate the aging of insurance accounts is to run your accounts receivable reports based on the date of service. This will give you an accurate accounting of how old your claims really are and how well- and how quickly- your billing staff is following up on unpaid and denied claims. If you are not sure which report you are currently running, contact software support for your practice management system. They will be able to help you determine how the report is running.
By using the MGMA benchmark and calculating your aging correctly, you now have a standard by which to hold your manager and billing department accountable. http://w0e.397.myftpupload.com/emerald-services/services/
120 Day Plus
The 120 day aged receivables will continue.
- Run a separate aging to capture only the patient pay receivables.
- How much money is left on the table after insurance or aside from insurance?
- What is your process for collecting these accounts
- How much are you spending to attempt to collect these accounts?
- Ultimately, how much are you writing off?
The average billing office costs for collecting self-pay accounts is from 12% to 16%. This cost includes statements and notices, staff time for answering incoming calls, cost of housing the accounts, posting adjustments and payments, credit card charges. http://w0e.397.myftpupload.com/emerald-services/services/
- How much more is being lost due to billing errors?
- What percentage of the self-pay accounts has a bad address or phone number and the patient is never being notified of the balance due? (Average is up to 30%)
- How many incoming phone calls is your staff taking each day? The average staff member handles 10 phone calls a day. The average call lasts 10-15 minutes. This means that each staff member is losing 2 to 3 hours a day handling incoming calls.
- How many times will a staff member touch that account during the billing cycle?
- Are you scanning for post-Medicaid eligible patients?
My point in bring these statistics to the forefront is to ask you to re-think your billing office. Are you doing the best job you can?
What if you could come into your billing office tomorrow and never handle a self-pay account again?
How much more effective would you and your staff become if they suddenly were relieved of the burden of the phone calls?
By outsourcing your self-pay accounts from Day one of the billing cycle you would reduce your cost overnight by 40%. The reason is the outsourced company is going to take this on at an 8% to 10% contingency fee. You are only going to pay for what’s collected yet you will get your entire portfolio resolved very quickly. They are going to find the 30% of mail return accounts and be sure the right party is receiving the statement. The proactive calls will increase your customer service and collect your money much quicker.
The end result will be a dramatic increase in ALL revenue! Why? Because you staff will be freed up to do what they do best-Bill insurance and work denials.
If you would like to speak more about this please contact me.