Private practice general derms: amount billed vs collections?

[username456789]

Hi all,
For those of you practicing in non-academic general Dermatology, approximately what % of the amount you bill, say, monthly, do you collect?

I'm a first year attending whose pay is primarily salary at the moment, with a bit of a bonus based on collections. Currently, 7 months in, my collections seem to be roughly 50% of what I bill. We don't accept medical assistance, but do take plenty of Medicare as do most.

Also, and obviously payer mix will come into play, but what other factors should I be looking at that might affect this? Our billing people are in-house, and generally pretty good at what they do. I will discuss this with them too, but I'd like to have some outside context as well.

Thanks.

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[asmallchild]

Hi all,
For those of you practicing in non-academic general Dermatology, approximately what % of the amount you bill, say, monthly, do you collect?

I'm a first year attending whose pay is primarily salary at the moment, with a bit of a bonus based on collections. Currently, 7 months in, my collections seem to be roughly 50% of what I bill. We don't accept medical assistance, but do take plenty of Medicare as do most.

Also, and obviously payer mix will come into play, but what other factors should I be looking at that might affect this? Our billing people are in-house, and generally pretty good at what they do. I will discuss this with them too, but I'd like to have some outside context as well.

Thanks.

When you say 50%, is that your gross collection rate or net collection rate?

Gross collection rate is harder to pin down a target number because it depends on your fee schedule.

Net collection rates should be in the high 90s if at a well run practice with appropriate billing (I find in-house billing is usually the better way to go). Payment timeframe is important too, we target within a month as a goal timeframe.

 

[username456789]

When you say 50%, is that your gross collection rate or net collection rate?

Gross collection rate is harder to pin down a target number because it depends on your fee schedule.

Net collection rates should be in the high 90s if at a well run practice with appropriate billing (I find in-house billing is usually the better way to go). Payment timeframe is important too, we target within a month as a goal timeframe.

Good question . . . I don't actually know. Admittedly, I'm new to a lot of this and I should probably figure that out.

All I know is that I receive a monthly tally of "Billed" and "Collected" and it's usually ~50% collected on what I billed. I tend to view our practice as pretty well run and the billing is pretty on top of things in general so I am not sure where the disconnect is (and again, I know I will need to discuss this with my people).

The first couple months I figured it was just a delay in payment with insurances either slow to credential me (some will apparently pay as far back as 90 days so that even if I saw patients with insurance with whom I wasn't yet credentialed, being credentialed within 90 days = payment anyway). But I am now 7 months in and it still seems like 50% is about what I'm collecting. I'm on pace to bill for ~$1.4M, but apparently collect half of that? Maybe my "charges" comments is artificially higher than it should be or something? I don't know.

 

[asmallchild]

Good question . . . I don't actually know. Admittedly, I'm new to a lot of this and I should probably figure that out.

All I know is that I receive a monthly tally of "Billed" and "Collected" and it's usually ~50% collected on what I billed. I tend to view our practice as pretty well run and the billing is pretty on top of things in general so I am not sure where the disconnect is (and again, I know I will need to discuss this with my people).

The first couple months I figured it was just a delay in payment with insurances either slow to credential me (some will apparently pay as far back as 90 days so that even if I saw patients with insurance with whom I wasn't yet credentialed, being credentialed within 90 days = payment anyway). But I am now 7 months in and it still seems like 50% is about what I'm collecting. I'm on pace to bill for ~$1.4M, but apparently collect half of that? Maybe my "charges" comments is artificially higher than it should be or something? I don't know.

I agree it would be a good thing to discuss with your billing team.

From what you are describing, it sounds like you are describing your gross collection rate where the denominator is based on the fee schedule your group has come up with. Because those numbers are variable from group to group, it is harder to compare.

I would ask to review your net collection rate where the denominator is based on contracted insurance rates (which are also negotiable). That number should be in the high 90s.

 

[Slack3r]

I agree it would be a good thing to discuss with your billing team.

From what you are describing, it sounds like you are describing your gross collection rate where the denominator is based on the fee schedule your group has come up with. Because those numbers are variable from group to group, it is harder to compare.

I would ask to review your net collection rate where the denominator is based on contracted insurance rates (which are also negotiable). That number should be in the high 90s.

Genuine curiosity, is there any utility in reporting the gross collections using the fee schedule? Like if you bill X, but insurance only ever reimburses Y% of that, aren't gross (fee schedule) collections just academic?

 

[asmallchild]

Genuine curiosity, is there any utility in reporting the gross collections using the fee schedule? Like if you bill X, but insurance only ever reimburses Y% of that, aren't gross (fee schedule) collections just academic?

That would be another good question to ask a billing department. I'm not really sure why the gross collection rate is so frequently reported. The cynical side of me says it's just one other variable to confuse employees.

There are some groups out there (typically large, typically control a large swath of area so that they have better leverage) that like to tout how closely their net collection rates approach the gross collections because of favorable negotiated contracted insurance rates.

 

[Balderdash]

Good question . . . I don't actually know. Admittedly, I'm new to a lot of this and I should probably figure that out.

All I know is that I receive a monthly tally of "Billed" and "Collected" and it's usually ~50% collected on what I billed. I tend to view our practice as pretty well run and the billing is pretty on top of things in general so I am not sure where the disconnect is (and again, I know I will need to discuss this with my people).

The first couple months I figured it was just a delay in payment with insurances either slow to credential me (some will apparently pay as far back as 90 days so that even if I saw patients with insurance with whom I wasn't yet credentialed, being credentialed within 90 days = payment anyway). But I am now 7 months in and it still seems like 50% is about what I'm collecting. I'm on pace to bill for ~$1.4M, but apparently collect half of that? Maybe my "charges" comments is artificially higher than it should be or something? I don't know.

What's your practice setup if you don't mind me asking? Rural, urban? How many patients a day?

 

[MOHS_01]

Yeah, gross billing numbers are arbitrary and not comparable between providers or over time... so don't waste your time trying to use them as anything but a rough metric for MoM or YoY collection rates. It would be amazing if anyone had a clearinghouse program that uploaded all fee schedules and reconciled each episode of care in real time, but I'm not aware of it existing. About the best thing you can do is use medicare as your index, create a spreadsheet that calculates expected collections using MC fee schedule, and index it accordingly. There are just too many variables to compare between systems I'm afraid; procedure and payor mix being the biggest two.

I would track wRVU's (consistent and reproducible between systems), collections per RVU, and total comp/wRVU. Taken together, these can give you a decent feel for how much you're working and how much you're getting paid for it relative to your colleagues. Good luck.