Are Your Medical Billing Practices Healthy? (Quick Checklist)
Each healthcare center relies on medical billing practices to keep a steady income flow. Setting up a good billing system can significantly improve the financial aspect of your medical practice and give you the freedom to commit to your patients entirely.
Here, we present you with a few questions you can ask yourself to check if your medical billing practices are healthy. By going over our list, you’ll quickly learn if the system you are running is working or not.
What Percentage of Your Practices’ Accounts Receivable Are Older Than 121 Days?
You want your accounts receivable (AR) to be resolved as soon as possible because when the process drags on, you risk encountering revenue leakage. Most providers divide accounts receivable into five groups based on their age:
- Group 1: 1-30 days
- Group 2: 31-60 days
- Group 3: 61-90 days
- Group 4: 91-120 days
- Group 5: 121+ days
The national average of AR in the last group is 12-14%. So, if your practice has over 12% AR older than 121 days, you are collecting reimbursements slower than you should.
However, keep your mind that you may have issues, even if the number is lower than 12%. Some billing systems don’t take resubmitted claims into account. So, they restart the clock any time you re-bill the insurance. For instance, a 150-day old claim shows as a current the moment you resent it to the insurance company, even though it’s been sitting for five months.
Issues like this one can create inaccurate accounting and mask certain problems in the billing department. Luckily, consultants like Peregrine Healthcare can offer you a detailed analysis that locates all issues in your billing system.
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How Quickly Do You Receive Payments After Sending Claims?
You want your practice to receive a payment as quickly as possible, but the process usually takes some time. The national standard for bill collection is 30-45 days. However, an experienced healthcare consultant agency like Peregrine Healthcare can reduce this timeframe. In fact, our average collection rate is 28-38 days, and with certain insurance providers, we can do it in 7-14 days.
How Fast Are Charges Entered at Your Practice?
Medical charges need to be entered every day to ensure a continuous financial income. When you don’t do it every, or at least every other day, you risk encountering cash flow problems, which could seriously hurt your practice.
So, what happens when your in-house biller is out of the office? Or, what if you don’t even have one?
Well, your cash flow probably takes a significant hit.
Luckily, we can help with that as we always have more than one representative trained to enter medical charges, which ensures there is never a delay.
Can Your Managed Care Contracts Be Renegotiated at a Higher Percentage?
You should review and analyze Managed Care Contracts every time you are supposed to renew them. Each time you receive a new or updated contract, you should take a deep dive and determine whether it can benefit your practice.
Figure out how the resource-based relative value scale (RBRVS) affects your finances. Look at the fee schedules, health plan coverages, and other important aspects.
If you feel overwhelmed by all the information and paperwork, don’t worry, we can do it for you. Peregrine Healthcare has extensive experience reviewing Managed Care Contracts and giving recommendations to maximize your income.
How High Are the Turnover Costs After Losing an Employee?
When you lose an employee, the average turnover costs are 20% of their position’s annual salary. That goes to finding an adequate replacement for the job and training them. In addition, the rest of your staff loses a bit of morale, so there is usually a drop in productivity after a person departs.
However, Peregrine Healthcare can lower the turnover costs and help you find new hires more quickly.
Contact Peregrine Healthcare
The revenue cycle management is complex and takes a lot of time and dedication. Most medical professionals don’t have the time since they want to commit to their patients. We understand that and want to help you by offering an in-depth audit of your medical practice and making necessary changes to boost your revenue and efficiency.
If you have issues with any of the questions we mentioned above, feel free to contact us, and we’ll be glad to help.
