It is becoming increasingly difficult for medical practices to get paid the money they are owed. Payers have developed a progressively complex and confusing set of rules and processes that lead to more denials, underpayments, and lost or ignored claims than ever before.
It’s nearly impossible for doctors to get the full amount they are owed using manual processes. However, the next generation of web-based medical billing and practice management software can help practices get the money they are owed.
Learn more about what is new in medical billing and practice management software by downloading CareCloud’s whitepaper.
Medical Billing by the Numbers
- 70% of claims are paid the first time they’re submitted
- 30% of claims are either denied (20%) or lost or ignored (10%)
- 60% of denied, lost or ignored claims will never be resubmitted
- 18% of claims will never be collected
-Statistics according to research from the Centers for Medicare and Medicaid Services (CMS).
Research from the Medical Group Management Association (MGMA) estimates that payers underpay practices in the U.S. by an average of 7% – 11%. Adding the 7% underpayment to the 18% of claims that aren’t paid at all, and medical practices are failing to collect, on average, at least 25% of the money they’ve earned by treating patients.
That’s a total of $125 billion left on the table every year by American medical practices. How can upgrading your software system help your practice claim the funds it’s owed?
Do It Right the First Time
When a claim isn’t paid the first time it’s submitted, the likelihood your practice will ever receive money for that work drops significantly. One of the best ways for your practice to improve your billing efficiency is to catch potential denials before the claims are submitted.
Specialized software is the simplest way your practice can accomplish that. A robust rules engine that can automatically identify claims that are likely to be denied and correct them will simplify an intentionally complex process.
The top software solutions use an intelligent engine that constantly updates and adapts its rules, so your practice can stay on top of the latest claim denial trends and continually improve your collection rates.
Billing software with a proactive rules engine will:
- Increase first pass resolution rate
- Improve speed of collections
- Decrease work for in-house staff
Get Paid in Full
Another problem keeping your medical practice from collecting the full amount of money you’ve earned is payer underpayments. Practices are reimbursed different amounts for the same procedure due to the individual contracts the doctor has with each payer.
It’s nearly impossible to manually keep track of every payer contract, so it’s impossible to know when your practice is being underpaid.
Many practices are turning to software that can automatically compare the actual payments received with the payments specified in each payer contract — and alerting them when discrepancies occur.
An effective contracts module will help your practice:
- Raise net collection rates
- Increase efficiency and organization
- Forecast future collections
The Power of Reporting
To make the best decisions it’s important for your medical practice to be able to mine data for billing and collection trends to figure out where your practice can improve.
The simplest way to do that is with technology. An intuitive software system that allows you to schedule customized reports to be created at certain intervals for on-going analysis, as well as generate custom reports on the fly when specific information is needed quickly can make a tedious manual process automatic.
Analytics can optimize your practice by:
- Creating easily understood reports for better decision making
- Reducing staff requirements and increasing productivity
- Catching mistakes and underpayments
The increasing complexity of revenue cycle management for medical practices is making it more important than ever to get a handle on the process to efficiently collect more of the money your practice is owed.
Installing your first practice management system, or upgrading to web-based practice management software, with the features described above, is a major step toward improving your practice’s accounts receivable operations.