Healthcare practices have increased their revenues by greater than 20% using outsourced medical billing services. Medical billing is a complex task that involves medical coding, insurance claims and HIPAA regulations. Manual billing is understandably error-prone and medical practices end up dealing with denied and rejected claims that need several follow-ups resulting in outstanding receivables.
Before hiring a medical billing service, medical practices should examine:
- How the medical billing service measures its performance, and
- How it solves payment bottlenecks and issues?
Key Performance Indicators (KPIs) to measure medical billing services are:
Collection ratio
Gross collection ratio compares the amount claimed by the medical practice with the amount paid by the insurance company. Net collection ratio adjusts the amount claimed by the practice to the amount allowed by the insurance agency.
Time between billing and collection
The number of days between the billing and its collection indicates the effectiveness of the billing process. Ineffective and tardy follow-ups adds to the time a payment stays outstanding. The standard for timely payments varies across different medical areas such as dentists, chiropractors and doctors.
Number of past-due payments
Medical billing firms usually segregate past-due bills into categories of 60, 90 or 120 days past due. They try to uncover common characteristics of these claims such as the Current Procedural Terminology (CPT) code. After isolating the common characteristics, medical billing companies can try to analyze the cause of delays for that category of claims.
First-pass payments and denial rates
First-pass pay rates refer to the number of claims that are paid immediately after submission. Denial rates refer to the number of claims that were rejected and needed follow-up. This metric helps medical billing companies analyze the cause of delays in the payments. The most common causes are incorrect CPT code, misplaced claims and denied services.
Patient liability
The billing desk of a medical practice collects any patient charges, such as copay or payments from patients not covered by health insurance. The percentage of patient liability is an indication to the medical billing service to adjust patient collections at the time of service.
Transparency and Reporting
Medical billing companies manage the billing process through web based medical billing software and tools. This offers transparency in the process and allows the medical billing service and the halthcare practice to work together to resolve any open issues. The online dashboard makes it possible for healthcare practice to measure the performance and results of outsourced medical billing.
The complexities of medical billing makes medical billing companies a healthcare professional’s best friend.
Tags: Healthcare, medical billing
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