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Maintaining a financially healthy medical practice is important for many reasons.
On the most basic of levels, it allows you to keep the doors open. You can retain employees, keep morale high and remove the headaches associated with worrying about money month to month. Most importantly, though, it allows you to better serve your patients.
How so? A financially healthy practice is able to plan long-term for future needs. With a secure, stable revenue stream, you can do things like hire more employees, improve your facilities, invest in new technology, and offer more development opportunities for staff.
Of course, this revenue is all tied back into the rate at which a practice receives payments from insurance companies. The longer charges stay in accounts receivable, the longer it takes your practice to get paid for the services performed. Ideally, your practice should only have to submit a claim to insurance once for it to then be paid, but this isn’t always the case.
So where does your organization stand? To help you get a better grasp on where your organization stands, look at these key questions and national averages below.
How many days of charges are in accounts receivable?
The average practice has charges in accounts receivable for 35 days. Remember, the higher the number of days, the longer it takes for you to be compensated for your work. If your number is 35 or higher, then you need to begin taking steps right now to lower it. Even if you are below 35, there are most likely opportunities for you to lower your days in accounts receivable to be even fewer.
What percentage of your accounts receivable is over 120 days?
In an average practice, 18% of claims have been in accounts receivable for over 120 days. Claims unpaid after 120 days require additional, urgent attention in order to receive payment, creating more work and slowing down your practice.
What percentage of claims are paid on first submission?
The average first claim pass rate is 85%. If you are regularly resubmitting claims multiple times, then it’s time to pinpoint and rectify the reason insurance keeps refusing payment.