Collection Formulla
The collection rate of a healthy clinic, often defined by the following formula, is expected to be above 95%, but more often than not many a practice bleed a lot of money due to improper preparation and understanding of the payer contract.
Collection Rate = Total Collections/(Total Charges – Adjustments)
To be able to bill accurately, the in-house or outsourced medical biller should be in touch with the latest version of payer contract obligations, which includes but are not limited to the following:
a. The Fee Schedule of the Products.
b. The rules of payment.
c. Preauthorization criteria.
d. Submission time frames.
Nature of Contract
Insurance companies most often than not offer standardized contracted rates to providers, but the buck does not stop there. The content & language of the contract should be able to protect the provider from any amendments that the payer may come up with a very short notice period. Besides, a clinic has to be precisely aware of the nature of the so called “deal breakers” such as
1. The number of procedures permissible for a service date.
2. The nature of the multiple procedure reduction or MPD.
3. Implant allowances.
4. Special payer EDI rules of submission. etc
Billing Skyfalls
In the eventuality that the payer does not seem to honor a well-prepared contract for a claims submission, the appeals process should be quite easy. You just go ahead and intimate the payer via a letter that you haven’t been paid as per the contract. A well-structured payer contract can go a long way in shielding you from any unexpected medical billing skyfalls.
Remember that the medical billing process begins even before that first claim first has been submitted; in fact even before the first patient is seen for the year; it begins when the payer contract agreement is taking shape in the forges of the medical billing cauldron.
