The complexities of insurance make it difficult for practices to receive their payments quickly. To minimize issues in cash flow, you can use benchmarking to avoid problems caused by delayed payments.
Even with rising premiums that increase patient responsibility, most fee-for-service reimbursements still come from payers. In the past few decades, billing patients directly during service has been replaced. However, recently your office staff must seek payment from multiple insurance companies.
Dealing with insurance companies has become increasingly complex. So, you have the opportunity for a claim to be rejected and your practice to go unpaid. The process of converting patient care to money has become increasingly 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 your practice’s revenue cycle. At a minimum, delays in payments can make it difficult to accurately predict cash flow. At its worst, they create stress over keeping the lights on and can potentially lead to burnout.
Benchmarking levels the playing field for practices
Finding ways to mitigate any delays or lost payments from payers requires understanding what behaviors or patterns to look for with payers.
Identifying a pattern of delayed payments from a specific payer can be daunting and time-consuming. This can be further complicated if you source this information from your EHR/EPM system. This 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 most accessible place to start is against your practice’s history.
Benchmarking against yourself is one of the main ways to monitor your practice and see how you are doing. Your denials are a crucial metric for patterns in payer behavior. For every 100 insurance claims you submit, insurance companies will likely adjudicate only 85-90. They will delay or deny the rest.
Read our blog What are some simple steps to get your denials under control?
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 information to prevent further denials for the same issue.
Another critical metric to track internally is new patient growth. New patient growth won’t uncover patterns in payer behavior. However, it will indicate your practice’s ability to monitor ongoing rule changes that could affect your bottom line. Patient attrition can increase the workload for medical practices and staff. Bringing in new patients is essential for the practice to stay afloat and improve its revenue.
Armed with this information, your practice can make up for losses incurred from denials and payer rule changes and set up a viable path toward growth.
Next steps
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 remain the same, proper benchmarking can allow medical practices to stay afloat and thrive and grow.
Learn more about how benchmarking can help your practice grow and how to manage your medical practice effectively by subscribing to our Health Prime blog.
If you have any questions about benchmarking or want to learn how we can help your medical practice, email us at [email protected]. Set up a meeting to discuss how Health Prime can help you get your practice back in its prime.
