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On the private forum, I had posted a question about billing performance in an effort to get some recommendations for a good billing company. I got no replys but I thought I would write up a primer for the residents as to what metrics are important to measure and watch in a billing operation (either in house or outsourced). I pulled this from an evaluation of our in house billing by a respected national anesthesia billing expert:
1. Days in accounts receivable: measures how quickly a bill gets posted and converted to cash. The median for anesthesia practices is 50 days. A good service is in the low 40s.
2. Net Collection Percentage: This is the total $ collected divided by charges minus contractual write-offs. That is after adjusting for the fact that medicare will only pay you $20/unit for example. The MGMA median is 91.5%. A good billing service should be at 95% (unless you have a large amount of no pay patients).
3. % AR > 90 days: Measures how well your billing service is following up aggressively on bills that are not being paid. A number around 9-12% is good.
4. % sent to collection: This number should be very close to your % of uninsured patients, so it will vary from practice to practice. If the number is significantly higher than your uninsured %, it signals that the billing service is not trying to collect the harder dollars and just sends them to collection.
1. Days in accounts receivable: measures how quickly a bill gets posted and converted to cash. The median for anesthesia practices is 50 days. A good service is in the low 40s.
2. Net Collection Percentage: This is the total $ collected divided by charges minus contractual write-offs. That is after adjusting for the fact that medicare will only pay you $20/unit for example. The MGMA median is 91.5%. A good billing service should be at 95% (unless you have a large amount of no pay patients).
3. % AR > 90 days: Measures how well your billing service is following up aggressively on bills that are not being paid. A number around 9-12% is good.
4. % sent to collection: This number should be very close to your % of uninsured patients, so it will vary from practice to practice. If the number is significantly higher than your uninsured %, it signals that the billing service is not trying to collect the harder dollars and just sends them to collection.
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