The dictionary defines it as “the action or process of collecting something while achieving maximum productivity with minimum wasted effort or expense.” Or as physician practices will concur, receiving monies for services provided as quickly as possible at the contracted rate. Those are both correct. The mystery is how is that done and how is it measured?
There are several tasks that can contribute to collection efficiency. It is no secret that the timely submission of claims to payers plays a large role in success. We work to submit all claims for payment within 48 hours of the service being provided. This helps our team achieve and maintain a company DSO (Days Sales Outstanding) of 35 or less. Other important objectives are cash posting in a timely manner, reconciling all payments with bank ledgers and following up on all claims within 30 days of submission and denial.
When measuring collection efficiency, one thing that may fly under the radar of some is payer contracts. Lack of close attention to contract details, such as term dates and rates, can make or break your revenue cycle success. Recently, we received notification for our client that one of their large payers was undergoing some changes to their fee structure; some specialty types would have increased reimbursement, while others would see significant reductions. We received and reviewed the document. From that, we were able to determine that for our radiation oncology client, this change meant a substantial increase in current reimbursement for their services. We confirmed “intent to participate” with the payer and watched for an official contract to be sent. Once received, we forwarded to our client with a note letting them know that upon signing and effective date, they would see a 30% increase in reimbursement for their services. During a visit, a patient mentioned the changes to our physician and was concerned that they would no longer be able to be seen at the center. Imagine how excited our client was when he was able to quickly reference the correspondence that we had sent to him and assure the patient that the practice would continue to be participating in their network. WIN!
Maintenance of credentialing and contracting are the basis of collection efficiency. Without that, the rest of the process is ineffective.
