Your medical billing staff can be the lifeblood of the success or mediocrity of your practice. Do you know how effective and efficient they are? How can you be comfortable with their performance if you have no measurement system?
Using a laisséz faire approach offers the physician or, practice manager little ability to evaluate medical billing performance. If your billing staff is high performing, congratulations may be in order. Should medical billers be under performing, some corrective action is appropriate.
Rating your medical billing staff becomes difficult, if not impossible, without the ability to evaluate their performance. Even if you use a top third-party medical billing firm to manage your reimbursement function, you need a measuring system to help you rate their effectiveness for your practice.
Establish Benchmarks
Before you can install a reliable system to learn how your medical billing staff is doing, you need to create benchmarks against which to measure results. Benchmarks provide you with baselines to use as starting points or goals and objectives.
Depending on your medical specialty, reasonable benchmarks will differ. The age and economic demographics of your patients also influences your choice of benchmarks.
According the Medical Group Management Association (MGMA), you can use their annual report on benchmarking to create medical billing baselines for your practice. After examining their survey data, you can then tweak the benchmarks for your situation, if additional factors influence your specific reimbursement results.
Evaluating Billing Department Results
Most medical practice professionals agree that evaluating the performance of billing departments starts and ends with the following items. Analyze this data and decide how effective your billing program, whether in-house or outsourced, is performing.
- Examine insurance reimbursement aging reports. While weekly reports are probably overkill for most practices, monthly reports give you meaningful data to evaluate your billing function. Typically, these reports come from your billing department or firm. Are you receiving these reports now? Are you analyzing them? If you answer “No” to either of these questions, you should turn the answers into “Yes,” as soon as possible.
- Evaluate patient payment aging. Use the same evaluation of self-pay patient receivables. Even if this patient group is small, their payment statistics influence billing staff performance ratings. Accounts receivable balances collected timely indicate your billing department is performing well. Balances that consistently reach the 90- to 120-day buckets can indicate billing and/or collection problems.
- Rate billing staff productivity based on the average age of your accounts receivable, taking particular note of those receivables over 120 days. Compare your receivable balances over 120 days to your benchmark number. Convert your amounts to percentages of total practice receivables to compare apples-to-apples.
For example, if your specialty is Pediatrics, the MGMA 120-day benchmark is 17 percent of total receivables. If your rate is only five percent, your billing department is performing well. Should your rate be over 17 percent, you need to improve their performance. Depending on your specific benchmark, you can quickly analyze the statistical performance of your billing department or firm.
Should your 120-day rate be above your benchmark, investigate the reasons. There may be influences driving your rate to be higher (or lower) than your benchmark that result from your billing or practice management software that don’t reflect billing staff performance. For instance, if your software ages claims receivable from submission date and your payer typically reimburses in 30 days, your one month receivables actually may be normal, even current.
However, if the software resets its clock when you re-bill an account over 120 days, this delinquent balance may appear as current on monthly reports. This distorts your analysis. In this example, the reports may give you false confidence. Understand the technology used to create your reports to learn how well your billing department or company is performing.