ROI of Outsourcing Medical Billing

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(No Transcript)
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ROI of Outsourcing Medical Billing

• Medical billing is the most critical part of a
  successful practice and outsourcing helps to
  enhance net revenue collection. When you do
  in-house medical billing, you are likely
  experiencing some inefficiencies in your medical
  billing even with a highly trained office manager
  and medical billing staff that lead to lower
  collections overall.
• Hence for some small and independent clinics, a
  better option is to outsource your medical
  billing for better ROI as finding and retaining
  qualified billing staff to handle medical billing
  and collections has become difficult and costly.
• It is observed that nowadays, many providers
  opting to outsource their medical billing to
  avoid the administrative burden and overhead
  associated with the billing process. Practices
  that outsource their billing can see a 7-10
  increase in net collections as well as provide
  better patient and provider experience.
• If you are not sure whether you need to outsource
  medical billing, then following the checklist
  would be handy for making an outsourcing
  decision
• Are your accounts receivable greater than 45
  days?

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ROI of Outsourcing Medical Billing

• Is your percent of accounts receivable over 120
  days greater than 15?
• Are you seeing the same, or an increased number,
  of patients but seeing a decline in revenue?
• Is your net collection rate declining?
• Do you experience a high rate of turnover with
  your in-house billing staff?
• Do you have difficulty finding qualified billing
  staff?
• If your answer for any of the above questions is
  Yes then you should outsource your medical
  billing.
• Once you have decided to outsource, you should
  know the type of billing company such as light,
  full service, and boutique based on your service
  requirements as not all billing companies are
  alike, and services can vary greatly but it is
  important to have responsibilities clearly
  defined in any contracts executed.
• Now we will look for ROI of Outsourcing Medical
  Billing
• When it comes to measuring ROI, you need to
  determine the actual costs of your current
  billing process with the help of your fixed and
  variable costs.

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ROI of Outsourcing Medical Billing

• Determine fixed cost with the following factors
• Hourly wages of staff and payroll costs
• Employee benefits
• Billing software
• Workers compensation insurance and payroll taxes
• Clearinghouse fees
•  Determine variable cost with the following
  factors
• Rise in rejections and denial rate
• Declining cash flow and net revenue
• Unplanned staff sick leave and vacations
• Stationary, postage, and statement fees
• Apart from the above, you can use some indicators
  such as First Pass Resolution Rate (FPRR), First
  Pass Acceptance Rate (FPAR) to evaluate ROI for
  outsourcing your billing.

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ROI of Outsourcing Medical Billing

• First Pass Acceptance Rate (FPAR)- (It is days in
  Accounts Receivable)
• The number of claims accepted by the payer upon
  the first submission.
• Target gt95.
• Calculation (Total Number Claims Submitted -
  Number Rejected Claims) / Total Number Claims
  Submitted.
• You can miss big profit margins if you
  consistently re-work a higher percentage of
  claims or you process outstanding AR as denials.
  Its essential to look at the number of days in
  AR and your net collections together.
• Days in AR
• The number of days that charges are outstanding.
• Targetlt30 days
• Calculation (Total Receivables - Credit
  Balances) / Average Daily Gross Charge Amount)
  Average Daily Gross Charge Amount - Total Annual
  Gross Charges / 365

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ROI of Outsourcing Medical Billing

• Net Collections
• The total amount you were potentially due from
  payers and patients was collected after excluding
  contractual adjustments.
• Target gt95
• Calculation (Total Charges - Payer Disallowed
  Amount) / Total Payments)
• First Pass Resolution Rate (FPRR)
• These metrics determine your capabilities for
  follow-up claims that are not paid the first
  time.
• The number of claims paid by the payer upon the
  adjudication.
• Target gt95
• Calculation (Total Number Claims Submitted -
  Number Denied Claims) / Total Number Claims
  Submitted
• These two KPIs are important and knowing them
  will help to determine whether you are achieving
  your ROI promised by the billing partner is
  realistic or not. If you are looking to optimize
  the ROI of outsourcing medical billing, we are
  one of the preferred medical billing partners in
  the US and our staff is HIPAA compliant with a
  clean claim submission rate of 95.