How to Know You Are Collecting Everything You Are Billing
"You don't know what you don't know", says the famous adage. However, most practice owners don't know how much they aren't collecting and they don't know how they would know if they are losing that money.
One practice we worked with recently found out that they were collecting only 40% of what they were billing, and with a few short changes they were able to fix the problem. But they wouldn't have found out if they didn't look.
Here is to find out if you are collecting what you should be:
Step 1: Find how much revenue you have billed for
- This should be fairly simple in the EHR that you are using. You will want to find a report that shows you how much money you have charged to insurance in the last 30 days.
Step 2: Find how much revenue you have collected
- Again, you would want to pull a revenue report for how much money you have collected in copays, deductibles, and insurance reimbursements.
(Note: You definitely want to exclude private pay)
Step 3: Divide what you have collected over what you have billed. This will give you a decimal, you would then multiply the decimal by 100 to get your percentage.
Conclusion: According to industry standards, you should be collecting 60% of what you bill. If you find that you are not collecting nearly that amount you will want to look at your insurance rate to make sure they are fair and you will want to see if you are collecting copays and deductibles.
If you are collecting everything you should and you are collecting less than 60% of what you are billing you should either get out of network or consider adding more private pay clients.