1. Are you receiving payment for your claims?
Obviously, the point of medical billing is to get paid for your work. But what is reasonable to expect?
You are doing well if you receive between 96 to 99 percent of claims, or better said, percentage of money from claims. I make this distinction because if you’re billing for different services, and you’re getting paid on your small claims, but not your high-fee claims, you could potentially have a high percentage of claims paid, but a lower percentage of total money in the door.
A quick note: having 100% of claims paid is always what you’re aiming for — that would be ideal. But in the imperfect system you’re working with (healthcare), be satisfied if you’re receiving 98%.
Consider it a Red Flag is you’re receiving less than 95%
If you’re at 94%, don’t panic, but its time to look closely at your reports, and determine where you’re losing 6%, so that you can make changes.
If you are under 90%, now it’s time to hit the panic button. It is time to seriously evaluate what’s going wrong.
The thing is, many practices collect less than 90% of what’s owed to them, and don’t even know it because they don’t have reliable reporting. Being able to run reports, to determine where your money stands, is a must—even for a small practice.
This leads us into question number two:
2. Do you know what has been paid or not paid, and why?
A: There are always going to be a few unpaid claims. And there are a lot of reasons why a claim can go unpaid. We recently published an article titled “the 17 reasons your insurance claims are being denied.”
Reasons can range from: The client didn’t tell you that they changed their insurance, to forgetting to get pre-authorization. Or perhaps the client had a deductible, and they never paid the bill!
If you, or the person doing your billing, doesn’t understand why claims are being unpaid, or how to fix the problems, I guarantee you that money is being left on the table.
The person responsible for your billing should be able to sit down with you, and tell you the status of every outstanding claim. There should be no mystery.
- A Red Flag is not knowing why you haven’t been paid.
- Hit the Panic button if you don’t know what’s been paid!
3. How many days are Receivables Outstanding? Or “what is your (DRO)?”
A: Under normal circumstances, you should expect payment with 45 days. Some insurance companies pay much faster, in about a week on the fast side! But legally, companies are allowed 45 days to pay.
The number one reason that claims are delayed is because the claims were not submitted timely. A good billing company (or in house biller) should generally get your claims submitted several times a week.
The other reason that claims can take a long time to be paid is if they are not submitted to the right managing company. Sometimes insurance companies take some of their services, such as behavioral health, and have another company manage them. If you submit a claim to the wrong company or department—the claim will usually be paid, but it will get bounced around for a long time first.
- Consider it a RED FLAG if your DRO is over 65 days.
- Hit the Panic button at 90 days!
Finally, whether you’re working with a medical billing company, or doing your billing in house, remember these three final takeaways
- Don’t allow too many excuses
- Require Specifics from your biller
- Use Automated reporting – there are a number of systems on the market for this, and it’s just really important, even for a small practice.
We at Thriveworks would love to help you with medical billing.
We offer full service medical billing at affordable rates to all Thriveworks franchisees. Our story is that we started as a medical practice, and after many years perfecting our billing process, we began offering help to other practices. We don’t want you to have to reinvent the wheel.
UPDATE 09/2014: To focus on providing excellent medical billing to Thriveworks franchises, we are no longer providing billing services to non-Thriveworks practices.
Learn more about the exciting benefits of opening a Thriveworks Counseling center in your area, here: Counseling Franchise.
Dr. Anthony Centore
And your Friends at Thriveworks