STEPS
1. Measure Billing Quality
> What is your adjusted collections rate?
> What is the percent of your claims paid within 15 days and 60 days?
> What percent of your accounts receivable is above 120 days?
2. Calculate Personnel costs
Include benefits, training, replacement, motivation, vacations, conflicts, sick days, employee payroll,
payroll taxes, insurance benefits, retirement plan.
3. Measure your capital expense on billing.
Include capital investment in software and hardware, monthly maintenance, backups, disaster
recovery, replacement, training, telephone systems and supplies.
4. Measure Lost Time.
Include your own time required to follow up on especially complex cases.
5. Estimate Lost Opportunity Costs.
How much business could you bring to your practice if you spent the time marketing it instead of following up on claims, managing personnel, or dealing with software problems?
If you add up these costs and you and they amount to 8 percent or more of the revenue brought in they you need to take a serious look at out sourcing your billing to a professional company.
