The revenue cycle is comprised of the front office staff (check-in, registration), the providers (charge capture of diagnosis/CPT Codes) and the back end billing team (processing codes for payment). The Medical Group Management Association (MGMA) has some great resources and courses to train yourself and your staff on various areas of the revenue cycle as well as benchmark tools to identify how your practice performs.
For primary care medicine, various resources recommended by MGMA benchmark back office billing to cost 7-9% of collected revenue. If your practice manages all aspects of billing, the estimate this cost the practice needs to include the cost of the biller(s), the software for billing, the clearinghouse, training for the biller, postage, phone lines, management time. Some challenges for a smaller practice include:
• Hiring a qualified candidate and managing their on going performance
• Developing a contingency plan for when the biller quits or is on extended leave.
• Limited budget for the biller to train via approved courses
• Developing and maintaining an audit function for the biller’s work
• Monitoring the day to day work of the biller
• Retaining the biller in the practice due to limited opportunities for advancement.
• Providing an acceptable level of benefits (healthcare, vacation, etc.)
If the practice outsources the back-end billing function, the cost is listed in the contract as a % of revenue. Some questions to ask include: does the billing company specialize in Pediatrics? Request them to share their performance versus MGMA benchmarks. What is the collection rate to the contract amount? What is the average Accounts Receivable days for the company (ask for the minimum and Maximum)? Will they provide an dedicated toll free line for patients to call related to questions on their patient statement? Are there individuals available Monday – Friday to answer questions and help the front desk as needed?