Calculating ROI for Outsourcing Optometric Billing and RCM
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When you and your staff constantly manage optometric billing tasks daily, like outstanding claims, denied claims management, insurance verification and eligibility, provider credentialing, and collections, issues start to compound, and you are soon buried under a pile of paperwork.
Eye care practices that prevent rejected and denied claims before claims are submitted are one step closer to hitting the center target on a return on investment (ROI).
To help you determine the true costs of your current billing and revenue cycle management (RCM) process, let’s look at four financial and operational questions critical to calculating your ROI for outsourcing to an optometric billing and RCM partner.
1. What are the actual costs of your current optometric billing and RCM process?
Optometry and ophthalmology practices must set aside a budget for medical billing services, and you may be wondering if such services are worth the investment. However, having the right billing and RCM partner can bring many benefits that outweigh the expenses of these services.
Determinate Costs: The first step to measuring your ROI is calculating determinate (fixed) costs and looking at indeterminate (variable) costs. Fixed costs are more challenging to control than variable costs. Fixed costs are set rates such as salaries, billing software, clearinghouse fees, and paper, postage, and statement fees.
Indeterminate Costs: Variable costs change with the rise or fall of revenue. For instance, an increase in claim rejections and denial rates, a decrease in cash flow and net revenue, an increase in bad debt, unplanned staff turnover, sick leave, and vacations affect your true costs.
Download our guide today: The ROI of Outsourcing Eye Care Billing and Revenue Cycle Management. Learn how to calculate your First Pass Acceptance rate, days in accounts receivable, and net collections rate, and see ROI examples and a sample ROI calculator.
2. Does your current billing staff have the necessary expertise and resources?
Every time you think your vision plans and medical billing are under control, new reimbursement rules, code changes, or staffing roadblocks appear. Assess your current situation to identify key decision points for outsourcing. To give you an idea, answer the following questions:
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 more patients but seeing a decline in revenue?
Is your net collection rate declining?
Is your staff spending more time on claim follow-ups, denied claims management, and calling insurance companies instead of patient care, providing services, and selling optical products?
Is your staff neglecting to verify patient insurance eligibility and benefits consistently? Practices who verify benefits and eligibility before the appointment date collect 30% to 40% more than providers who don’t verify benefits.
Do you have certified coders on staff to review never-ending billing code changes?
3. What will your billing staff do if you outsource medical billing?
A good optometric billing services partner will work with you to help create more efficient procedures for your practice. Outsourcing medical billing and other RCM services will allow you to delegate these tasks to a professional team, like Fast Pay Health, which specializes in the nuances of the financial twists and turns related to eye care.
For instance, your staff will have more time to:
Improve the patient collections process through more frequent and efficient communications.
Educate patients on their eye care benefits and financial responsibilities.
Increase service and product collections by simplifying contact lens ordering and focusing on how to compete with online optical retailers.
Act as a liaison with the medical billing partner to learn more about non-covered benefits, collecting deductibles, and more. In addition, a good RCM service will work with you to help create billing procedures to make your practice more efficient.
Market your practice (social media, patient relationship management, promotional campaigns, etc.) to increase business opportunities.
“I see Fast Pay Health as an investment rather than an expense. The team is a huge contributor to our practice’s success. They specialize in alleviating the burden of insurance billing and giving you peace of mind. ”
4. What is the ROI of outsourcing your optometric billing and revenue cycle management?
Medical billing and RCM are not a one-size-fits-all approach. Fast Pay Health understands what it takes to provide a comprehensive solution that consistently delivers value to your eye care practice. On average, practices will see a 5% to 10% increase in net collections when they outsource their billing and RCM.
80/20 Rule: Imagine if your billing service could typically achieve 90% to 95% of your owed amount. The best medical billing and RCM partners follow the 80/20 business rule (the Pareto Principle) and allocate resources to target problem payers through high-value and high-return services. This rule states that "80% of consequences come from 20% of the causes."
First Pass Acceptance Rate: A crucial financial metric to focus on is ensuring that vision and medical claims are clean and error-free before submission. The national average for the First Pass Acceptance (FPA) rate is 70%. FPA represents the percentage of claims accepted for adjudication by insurance payers on the first transmission.
First-Pass Ratio and Claims Re-Work: Many practices experience revenue loss due to a poor first-pass ratio and claims re-work, particularly with ever-changing healthcare and medical coding. If a higher percentage of claims require re-work or outstanding accounts receivable (AR) are processed as denials, a significant portion of your profit margins can be affected.
Days in AR and Net Collections: It’s critical to look at the number of “Days in AR” and your “Net Collections” together. Days in AR may meet or surpass industry best practices. Net Collections may be low if your medical biller writes off denied claims without following up with insurance companies.
Complex issues can accumulate when your staff is responsible for daily billing tasks such as posting payment, tracking outstanding and denied claims, verifying a patient's insurance eligibility, and ensuring the provider is enrolled and credentialed by insurance payers. Eventually, your staff may become overwhelmed with paperwork.
Determine Outsourcing Optometric Billing ROI: Request a Free Practice Analysis
Outsourcing billing services allow you to delegate critical RCM and medical billing tasks to a professional team. We know the ins and outs of your eye care insurance payers best, and we work with any ophthalmology and optometry practice management software.
Request a free practice analysis today and see how Fast Pay Health takes a proactive approach to help you get paid faster and improve the financial performance of your practice.