Use a Billing Company with Expertise in Urgent Care Billing
Mistake #12: Using an ED or primary care billing company to bill for your startup urgent care center
In Mistake #11, we already covered the mistake of choosing a spouse or an inexperienced biller to do urgent care billing. So let's assume that you will not make that mistake, and you will look to outsource your billing to an expert biller.
Even so, you don't want just any billing company, you want a billing company that does excellent work and is expert at urgent care billing. We have helped many centers clean up the mess created by a competent billing company that did not really understand the unique aspects of urgent care billing. Choosing a billing company with specific expertise in urgent care coding and billing can be a key to the financial success of your new urgent care center. If you outsource, choosing the right company to do your billing, may be the most important decision that you make in starting your new urgent care center.
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Does the biller really understand the codes (and modifiers) that are critical to urgent care reimbursement? Urgent care coding is quite complex. It can take six months to a year for an experienced biller to learn the basics of urgent care billing. Meanwhile your revenue cycle management will suffer delays, and even a 30-day delay in your cycle can mean that you will have to borrow an additional $100,000 to keep your urgent care center open.
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Will the biller really understand and chase difficult past due accounts? Some accounts (especially workers compensation cases) may take very long to collect.
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Is the biller really an expert in urgent care services? There are only a handful of experts in billing and coding for urgent care centers.
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How has the biller served other urgent care centers? Ask for several references. Make sure the references are urgent care centers that have been with the billing company for at least a year. Find out what their average days of accounts receivable ("average days in AR")* have been. Find out what percentage of billings are written off as bad debt.
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What rate will the biller charge? You don't want the rate to be too high, and you don't want the rate to be too low. You are not buying a commodity where price is the major determining factor. You need a combination of outstanding quality and reasonable fees. A biller will need substantial resources to do an excellent job billing for your urgent care center. Is the biller's fee very low? If so, choosing the "cheapest" biller may be a very costly decision. A biller who collects 3% more than another biller, is always worth one or even two percent more than the cheapest biller.
PV Billing, an affiliate of Practice Velocity, performs over $35-million of annual urgent care billing. You may want to consider using the expertise, experience and quality of PV Billing to perform billing for your urgent care center. Their years of experience in the field of urgent care billing in many states will ensure that your center receives the best billing services available.
*Average days in accounts receivable (AR) is the amount in accounts receivable divided by the average daily receivables. It is expressed as "days in accounts receivable." The actual calculation of days in AR is as follows: ARtotal/Revenue90days/90days.
- ARtotal = total revenue billed but not yet collected (nor written off)
- Revenue90days = the total amount of revenue billed over the past 90 days.
In general, the lower the number of days in AR, the better. A good value for days in AR is under 50-60 days. It is possible to produce a total value for days in AR that is under 40 days, but this can usually be done only with excessive write-offs or with extremely harsh billing policies that may result in poor patient satisfaction. Because the result is not expressed in gross dollars, but rather as a multiple of average daily billings, days in AR can be used to compare billing effectiveness for practices that are quite different in gross revenue.