Your medical practice probably missed revenue this year that you could have collected. But how much have you been leaving on the table?
We built a healthcare collections calculator to help you find out how much money you could have collected, instead of losing that revenue. Just enter some basic collections and A/R details, and we’ll let you know how much you may be leaving on the table.
Of course, some non-payment is to be expected. But there are steps you can take to keep that number as low as possible. Two metrics that help you identify missing revenue that could have been yours: net collections and risky A/R.
What is Net Collections Rate?
Net collections is the gap between the reimbursement you expected to receive from payers and what they actually paid. Practices lose out on revenue for all sorts of reasons:
- Insurance companies may deny claims and appeals efforts may not yield payment.
- Insurance may pay based on outdated fee schedules and the resulting variances are not identified.
- Patients neglect to pay their out of pocket costs.
To calculate your net collections rate, you’ll need to know the total collections, charges and adjustments for your practice. Once you have it, you should follow this process:
- Subtract any adjustments from your total charges. What’s left is the revenue owed by payers.
- Take your actual collections to date and divide by the expected number from your first calculation.
- That’s your net collections rate.
At Gentem, our net collections benchmark is 95%. If you are recuperating less than that, let us help you review your process to understand why.
What is High Risk A/R?
Over time, missed collections add up. Accounts receivable that were not paid on time, often known as aging A/R, are at a high risk of never being paid. Of course, not every claim will yield full reimbursement, but if you have lots of aging A/R, you may have opportunities to collect more.
Ideally, most of your outstanding accounts receivable should be in the 0-30 day bracket, since they are most likely to get paid. If you work with payers that are consistent but slow to process and pay claims, you may also expect to see A/R sitting in the 31-60 day bracket. A/R still outstanding after 90 or 120 days is at the highest risk of never being paid.
Our benchmark at Gentem is for no more than 8% of total A/R to be unpaid after 90 days, and no more than 5% after 120 days. Anything above those percentages may be unnecessarily at risk: outstanding claims in these buckets may need more follow-up for resolution. In addition, after 90 days, timely filing or appeal/adjustment limits may be exceeded.
You can use our medical lost calculator to compare your own percentages and see how that gap translates to a dollar amount. A more streamlined collections process can help you get that number down.