10 Benchmarks and 10 Best Practices to Improve Billing and Collections

10 Benchmarks and 10 Best Practices to Improve Billing and Collections

For the profitability and success of a medical practice, efficient billing and collections is of utmost importance. Any efforts to increase efficiency should be made to maximize revenues during a difficult time in the healthcare industry. To enhance your billing and collections procedures and methods, consider these 10 benchmarks to target and 10 best practices that will help make these benchmarks possible.


1. Days in Accounts Receivable – The claim should stay less than 45 days for paper billing and less than 30 days for electronic billing.

2. Transcription – The transcription should be completed within 24 hours after the procedure is completed. Some experts recommend sooner, however.

3. Insurance verification – This should be done within 3 to 5 days before the date of service. While you do not always get authorization at the moment you call, ass soon as you do receive verification, the patient must be notified. The patient should also be made aware of his/her co-pay and/or deductible before the procedure or service.

4. Coding – The coding on the claim needs to be complete within 48 hours or less. This will allows the claim to go out the door on the same day as the case was charged.

5. Claims billed out – This should be done within 24 to 72 hours from the date of service. The sooner the better to avoid possible delays or issues that will need resolved. Also to consider are slow dictation from surgeons and discrepancies related to procedure information. This should be regarded as a more aggressive benchmark with the understanding that occasional issues will delay the process.

6. Claims follow-up – This should be done within 28 days of the unpaid claim’s initial processing date. The medical biller should always follow-up. For medical facilities who filing mostly electronic claims, the biller should keep this benchmark lower.

7. Denial rate – The denial rate on claims should be less than 2 percent. The medical billing specialist must track the reason that claims are getting denied, and fix the problem so future claims will not be denied. This will reduce the expense associated with the claim filing and give the practice manager access to revenue to use for necessary expenses.

8. Accounts per collector – Any new medical practice should employ one medical biller for 350 to 400 cases per month. Also there must be one billing collector assigned ot every 800 accounts when there is outstanding accounts receivable. The office manager must monitor the collection activity closely so these cases are being worked on every 2 to 4 weeks.

9. Aged accounts receivable greater than 60 and 120 days – Less than 20 percent of cases in accounts receivable should be there for more than 60 days, and less than 10 percent should be there for more than 120 days.

10. Cash collections – The cash collections should be a percent of net revenue, with the collection goal of 100 percent of your monthly average net revenue for the preceding three months.

Best Practices

1. Post your targets – Setting goals is a wonderful motivator for office and billing staff members. You should put targets on display and reward the employee when he/she meets or beats the target. One way to do this is post a monthly cash collections goal and give the employees motivation to do better. When someone meets a target, have the entire medical billing and office staff treated to a free lunch.

2. Post the pertinent figures – A different approach to take is to display actual figures associated with the day’s work. You can track reimbursement on a board in the business office area. This is an “in-your-face” indication of how the business is doing.

3. Conduct a “core audit” – A core audit is a comprehensive review of your revenue cycle, from the beginning of the billing and collection process to the completion. This should be done when a high percentage of the accounts receivable falls in the 90-day and over range. This involves verifying insurance benefits, doing precertifications, and following up with pre-authorizations. The medical facility is required to call the insurance carrier to verify that the precertification covers the expected service to avoid potential denials.

4. Instruct coders to code for all items and services – Under the new ASC payment system, all items and services must be coded to adequately capture reimbursement. Coders should be trained to code out everything in the medical record note. These codes go through CCI edits to assure there are no issues/errors with bundling specifications.

5. Secondary payers – For certain cases where secondary payers are involved, the medical biller must pay close attention to the rules and regulations so that there are no missed reimbursements. It may be necessary to attach the primary payer’s explanation of benefits to the claim when filing to the secondary payer to prove which procedures that the primary payer did not cover.

6. Identify barriers affecting physician dictation – One common issue that holds up the medical billing process is delayed dictation. The medical biller should work to identify the cause and see what he/she can do to assist the physician in completing the dictation in a timely manner. I

7. Do not blindly rely on clearinghouse’s messages – The software vendor and clearinghouse must have a working relationship in order to process claims. Claims fall to the wayside and are not accepted by the payer when there are problems with the clearinghouse.

8. Hold collectors accountable – In the case of collections, the medical billing manager is often juggling many accounts. This makes it easy for errors to occur. When this happens, the impact of decreased revenue could be devastating. The collections process is to be structured and accountability assigned to certain individuals to assure that monies are received to the practice.

9. Get paid for high-ticket disposables – Do not miss opportunities to collect from implants and disposables. This could result in loss of hundreds or even thousands of dollars. The medical biller must have close communication between the materials manager.

10. Document payer rules – To avoid spending time on appeals, it is important to document payer rules. Payers are not willing to share these rules and many time questions about policies will go unanswered. If the payer will not assist the medical biller, then it is the responsibility of the medical biller to find these things out.

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