Every time you think your eye care billing is under control, new reimbursement, coding, or staffing roadblocks appear. When you’re continually managing claim denials and rejections, eligibility and benefits verifications, claims submission, payment posting, AR cleanup, and collections, billing issues start to compound and you find yourself buried under a pile of paperwork.
The key financial metric to focus on is to make sure claims are “clean and free from errors” before you submit them. Knowing how to prevent rejections or denials in the first place is your best return on investment (ROI).
Want to know how to evaluate the efficiency of outsourcing eye care billing—and how to calculate your ROI? Here’s everything you need to know.
The True Costs of Your Current Optometric Billing Process
On average, healthcare providers will see a 5-10% increase in net collections when they outsource their revenue cycle management (RCM). To help you determine the true costs of your current billing process, let’s look at four critical financial and operational processes that are part of calculating your ROI.
Calculate determinate (fixed) costs
Staff hourly wages and payroll costs
Workers’ compensation insurance and payroll taxes
Stationary, postage and statement fees
Look at indeterminate (variable) costs
Increase in rejections and denial rate
Decrease in cash flow and net revenue
Increase in bad debt
Unplanned staff sick leave and vacations
Assess and identify key decision points for outsourcing billing
Are your accounts receivable (AR) greater than 50 days?
Is your percent of AR over 120 days greater than 15%?
Are you seeing the same or an increased number of patients, but seeing a decline in revenue?
Is your net collection rate declining?
Do you see a higher percentage of bad debt write-offs due to delinquent patient accounts?
Is your staff spending more time on claim follow-ups and calling insurance companies instead of on patient care, services, and selling optical products?
Review other opportunities and growth for your staff when you outsource billing
Improve the patient collections process through more frequent and efficient communications.
Educate patients on eye care benefits, patient financial responsibilities, and increase service and product collections.
Act as a liaison with the billing service team to learn more about non-covered benefits, collecting deductibles, and more.
Provide more efficient patient care and have more time for marketing your practice (social media, patient relationship management services, and promotional campaigns).
“Fast Pay Health has cut our turnaround time in half—now we see payments in 5-7 days.” – Stephanie Haenes (Art of Optiks)
Determine if Outsourcing Eye Care Billing is Right for You
The national average for First Pass Acceptance (FPA) rates for medical claims is 70%. Many practices lose revenue due to poor first-pass ratio and claim re-work because of never-ending healthcare changes. You can lose a big chunk of your profit margins if you consistently re-work a higher percentage of claims or you process outstanding AR as denials.
It’s essential to look at the number of “days in AR” and your “net collections” together.
Days in AR may be at or above industry best practices. Net collections may be low because your biller is merely writing off denied claims rather than following up with insurance companies.
How to calculate days in AR:
Days in AR: The number of days that charges are outstanding
Target: <30 days
Calculation: (Total Receivables - Credit Balances) / Average Daily Gross Charge Amount*
*Average Daily Gross Charge Amount - Total Annual Gross Charges / 365
How to calculate net collections:
Net collections: The total amount you collect from insurance payers and patients after excluding contractual adjustments
Calculation: (Total Charges - Payer Disallowed Amounts) / Total Payments
The ROI You’ll See With Smart Optometry Billing Solutions
What if your billing service can typically achieve 90-95% of what’s owed you? The best optometry and ophthalmology billing services follow the 80/20 business rule and deploy resources to target problem payers through high-value/high-return services.
Outsourcing to a full-service optometry billing solution like Fast Pay Health can increase your revenue and gross margins. Paying for a higher billing service level has the potential to be a significant investment. But will you know if this investment will generate a higher ROI?
Let’s take a look at a sample ROI calculation for outsourcing optometric billing services.
“I see Fast Pay Health as an investment, rather than an expense. Considering what it takes to get AR under control and sustaining it at a low level consistently, using an optometry billing service has saved us time and money.” – Julie Honda, OD (see success story)
Other Advantages of Outsourcing Eye Care Billing
Still wondering if outsourcing billing services is worth springing for? When you have the right RCM partner, the advantages of outsourcing far outweigh the costs of these services. Nine advantages that happen when you outsource optometry billing include:
You don’t have to do all the work
You reduce staff expenses
You get ahead for a change
You decrease insurance follow-ups
You work smarter with eligibility verification
You access a billing team with uninterrupted service
You lower accounts receivable
You get paid for your work
You pay more attention to patients
Experience Positive ROI with an RCM Partner
It’s time your billing process receives the focus it deserves.
The Fast Pay Health billing approach is to triple-check everything so that you see a consistent return on your investment. We know the ins and outs of working with the top insurance payers, and we take the time to research and analyze every process to maximize your payments—so you can focus on patient care.
Ready to experience the positive ROI of outsourcing eye care billing? The Fast Pay Health team will help you get started.