Michelle Cavanaugh, RN, CMRS

No money for payroll? Can’t seem to cover your overhead this month? Are you working many hours/day yet your deposits are minimal? You are not alone. Proclaims Medical Billing is regularly contacted by practices that are facing these very same dilemmas.
Determining the root cause of less than desirable cash flow is a challenge. The first step is to gather data. A thorough review of key practice management reports will be time well spent and provide the insight you need to seek a solution.

Aged Account Receivable Report
Review your aged AR reports at least monthly. Be sure to watch the figure for claims aged greater than 60 days. This figure should be significantly lower then current aging and there should be minimal if any unpaid monies listed on the report as the aging extends to greater than 90-120 days. Ideally less than 20% of total unpaid claims should be greater than 60 days old.

Fee Schedules
It is imperative that your usual and customary fees be reviewed to assure they equal or exceed your contracted fee schedules for the major insurance companies that you are doing business with. Often a practice will use Medicare fees as a minimal acceptable charge and expect their contracts with non-Medicare insurance companies to exceed those fees.

Contract Review
When is the last time that you reviewed your contracts for reimbursement from commercial insurances? If it has been more than 2 years then it is time to dust them off and review the agreement. It may be time to renegotiate it. In addition, your staff should be monitoring that you are being reimbursed per your contracts. Confirming your fees and reimbursements will assure that you are not missing deserved revenue.

Month to date/Year to date Report
How do your charges/income compare to previous years? Review a report for last year and the current year that summarizes your monthly total charges and income so you will be able to look for any variations. Is there a significant change? If unfavorable, have there been any practice changes that would account for any dramatic differences such as a partner leaving the practice? If not, a significant discrepancy between the two reports could signify trouble in claims management for your practice.

Net collection ratio
Calculate the net collection ratio for your practice. This is a truer picture of the effectiveness of your practice’s current claims management. The net collection ratio is a percentage based on money collected minus contractual adjustments. This ratio is calculated by the following formula:
Received payments
Charges – contractual adjustments

Although the industry standard is a net collection ratio of 80-88%, clients of Proclaims Medical Billing enjoy a net collection ratio of 97% - far above the industry standard!

Now what?
Now that you have reviewed reports and done your comparisons, what trends are you seeing? Since cash flow is a direct result of the effectiveness of your billing staff, ask yourself the following questions:
Am I satisfied with my cash flow? If so, then go no farther. If not, then read on.

Do I have a reliable and knowledgeable billing staff — or is there frequent turnover?

Why do I have so much money in my aged receivable account?
Is my billing staff motivated to aggressively work on unpaid or underpaid claims?

Are denied claims being appealed or simply written off as bad debt?
Do I need to renegotiate contracts, eliminating those that pay poorly?
Is my software a barrier to effective claims filing?

Decision Time
If cash flow is less than desired, your financial success hinges on an important decision that you need to make. What can I do to improve cash flow? Do I need to go through the process of trying to find better billing staff and the time and headaches that go along with that? Or do I do as many successful practices and alleviate my worries by deciding to turn to the experts?

Outsourcing to an experienced medical billing company may be the answer that is right for your practice. Proclaims Medical Billing is owned by a Registered Nurse and staffed with certified medical reimbursement specialists, highly experienced medical billers, and coders. With over 10 years experience in billing for all types of healthcare providers, PMB can help turn your poor cash flow into more money in your pocket in a short period of time. Call today for a free, no obligation consultation. 877.279.0023.


“The personal service and unmatched attention given to our account convinced me I made the right choice outsourcing our billing to Proclaims.”
— Steven Brown, MD, Palm Coast Womens Center

“ Having used other billing companies I can honestly say that Proclaims is the most conscientious of all.
No detail is too small and follow up is excellent. We noticed an immediate upswing in collections when they took over our account.”
— Georgia Canakaris, Administrator, Bunnell Medical Center

www.proclaimsmedicalbilling.com
Proclaims Medical Billing Serving Physicians since 1998



July 2008

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