All medical practices need to maintain consistent cash flow and monitor their revenue cycle in order to ensure continued success.These guidelines will get you started on the right track and help you avoid increasing aged account balances and uncollectible claims.
Establish Billing Expectations Regardless whether billing functions are performed in-house or outsourced, the same standards should be met. The practice manager and physician partners normally establish billing performance goals using Key Financial Indicators including:
Gross collections ratio – depends on practice fee schedule and typical billing patterns
Net collections ratio – should be between 95 and 99 percent
Days in AR – target is less than 30 days
Charge entry lag – target is 2 days
Point-of-service collection rate – should be as close to 100 percent as possible
Best Practices for Billing
Submit claims daily
Generate patient statements monthly
Post payments within 3 working days
Review and resolve denials within 2 working days
Follow up on delinquent patient balances after the second statement
Review insurance aging and follow upon claims beginning at 21 days
Address patient inquiries are addressed within 1-2 working days
Generate financial reports once monthly, and always review them using the Key Financial Indicators to track progress
All contractual adjustments and write-offs should be based on consistent, written guidelines and contract fee schedules approved by the office manager and the physician partners.
For further questions regarding billing best practices or other practice support ideas, please feel free to reach out to Juliana Stanley.
It is ArMA’s mission to promote and provide leadership in the art and science of medicine; to preserve and improve the health of all Arizonans; to represent Arizona physicians in the public forum; and to defend Arizona physicians’ freedom and ability to practice medicine in the best interests of your patients.