The complexities of insurance make it difficult for practices to get paid quickly. To minimize issues in cash flow, you can use benchmarking to get ahead of problems caused by delayed payments.
Even with rising premiums that increase patient responsibility, the bulk of fee-for-service reimbursements still come from payers. In the past few decades billing a patient directly at the time of service has been replaced with your office staff seeking payment from multiple insurance companies.
As dealing with the insurance companies has become increasingly more complex, so has the opportunity for a claim to be rejected and your practice to go unpaid. The process of converting patient care to money has become more and more difficult.
Insurance companies are like any other financial entity. Any gap between cash inflows and outflows presents an opportunity for them to invest for short-term interest or drive additional margins to report to investors. Ultimately, payers benefit from not paying you quickly.
This can cause problems as any delay or loss in payment can represent challenges in managing the revenue cycle of your practice. At a minimum, delays in payments can make it difficult to accurately predict cash flow. At its worst, it creates stress over keeping the lights on and can potentially lead to burnout.
Benchmarking levels the playing field
Finding ways to mitigate any delays or lost payments from payers requires an understanding of what behaviors or patterns to look for with payers.
Trying to identify a pattern of delayed payments from a specific payer can be a daunting and time-consuming task. This can be further complicated if you are sourcing this information from your EHR/EPM system, which means sorting through massive amounts of often poorly organized data.
Thankfully, benchmarking can provide a more pragmatic approach to tackling all of this data and the easiest place to start is against your practice's history.
Benchmarking against yourself is one of the main ways you can monitor your practice and see how you are doing. A key metric to look at for patterns in payer behavior is in your denials. For every 100 insurance claims you submit, it is likely only 85-90 will be adjudicated, with the rest getting delayed or even denied.
Identifying variations in denials throughout your practice's history will help you determine trends across different offices, payers, or procedures that indicate a payer rule change. This should equip you with the necessary information to prevent further denials for the same issue.
Another important metric to track internally is new patient growth. While new patient growth won't uncover patterns in payer behavior, it will indicate your practice's ability to monitor ongoing rule changes that could affect your bottom line. Patient attrition can cause an increased workload for medical practices and staff. Bringing new patients in is an important task for the practice to stay afloat and improve their revenue.
Armed with this information, your practice has the opportunity to make up for losses incurred from denials and payer rule changes and also set up a viable path towards growth.
Dealing with insurance companies is part of being a healthcare provider. While insurance rules continue to evolve and the gap between treatment and payment will likely never be reduced, proper benchmarking can give medical practices the opportunity to stay afloat and even still thrive and grow.
If you would like to learn more about how benchmarking can help your practice grow and information on how to manage your medical practice effectively, you can subscribe to our Health Prime blog.
If you have any questions about benchmarking or want to learn how we can help your medical practice, feel free to email us at email@example.com. Set up a meeting with us to discuss how Health Prime can help you get your practice back in its prime.