When it comes to billing practices for dermatology services, an important metric you should know, understand and monitor regularly, is your net collection rate. It’s not enough that you provide exemplary dermatology care you must be paid for it too – and in a timely manner! Understanding your net collection rate is an important component of any successful practice. When it comes to medical billing and collection, it also means having a firm you can rely on to provide these trusted services is as crucial to your success as the skin care services you offer. If you don’t yet understand the importance of net collection rates, and how they might reveal deficiencies in your revenue collections process, we urge you to take a few moments to read this blog. If you still have questions about how to collect revenue due to bad debt, late filings, claims underpayments or billing and coding errors, contact us for more details on how we help dermatology clinics improve their net collection rates. Your success is our success!
What is your net collection rate?
A net collection rate is a metric used by medical services providers to evaluate the overall health of their business. At its core, it is the net, or adjusted, percentage of reimbursement ACHIEVED, out of the reimbursement ALLOWED, based on your contractual obligations with payers. In the simplest of terms it’s measuring your billing practices against your billing success.
Collection Rate Definition:
This is a pretty straightforward service definition that compares your rate of billing to your rate of collections and includes the time taken to complete those collections. Billing cycles and length of collections are both a factor. The collection rate refers to the percentage of revenue collected from consumers on an annual basis and is calculated as follows: Revenue collected divided by revenue invoiced. Generally speaking, a claims ratio of 95% or better will point to a healthy bottom line while anything less suggests your practice might be losing money. Much of this potential waste comes from rejected claims that have to be resubmitted – meaning your staff are duplicating efforts and wasting time and money in the process.
Why You Might Need Medical Billing and Collections Services
You are the expert in your field. Spending many years in school and in practice, you help people to both look and feel better, help cure disease, manage chronic skin care conditions and in that sense, provide both medical and mental health services for your patients. Every member of your team is crucial to your success but getting bogged down in medical billing details and/or the business of collections is time consuming and not an area where you should have to focus your valuable time.
Medical billing and collections is called a business for a reason – because it requires an investment of time, and a particular skill set, demeanor and expertise to be successful. Derm Care Billing Consultants has the time, the expertise and a highly skilled team dedicated to dealing with both individuals and insurance companies daily in order to maximize your collections and improve your net collection rate.
Research suggests that as many as 15 to 25% of claims submitted to insurance companies by medical practitioners each month are rejected. This might be the result of something as simple as a coding error. Collections that are focused on individual persons/patients might be problematic simply because your patient didn’t understand their obligations in the first place such as their responsibility for co-payment or not having access to online payment systems. In other words, to improve your net collection rate might sometimes be a joint effort between HOW you are collecting payments and EDUCATING your staff and clients on payment methods and WHEN payment is due.
Consider improvement strategies such as collecting co-pays prior to service; ensuring your staff is up to date with training so that coding errors don’t happen, and that your process for medical billing is occurring within a reasonable timeframe from when the services were provided. OR
Simply contact a specialist in the field, like Derm Care Billing Consultants to help alleviate the worry and improve your financial bottom line!
Without a full understanding of your net collection rate it might be easy to dismiss the potential benefits of a service like that provided by Derm Care Billing Consultants. However, the reality is that when comparing expenses as a cost of doing business against the cost of medical billing and collections done by team members of your clinic or practice, you’ll find the benefits of outsourcing medical billing and collections outweighs those costs. If you find your net collection rate is hovering around the standard of 75-80%, it’s time to focus on methods of improving that metric. Put the health of your practice first, just as you put the health of your clients first and utilize the expertise of a service that specializes in the business of billing and collections. Your clients will leave with their health restored and your business health will prosper too!