Strategies for Improving Net Collection Rate Medical Billing Percentages
Your objective should be to run a financially stable practice that continues to meet the needs of your patients. To do that, work to improve your net collections rate. Some ways to improve it include the following:
Ensure patients understand the payment process
Some patients do not understand their financial obligation when receiving medical services. This lack of insight leads to confusion about whether or not they must pay later.
Create educational materials that explain the payment process to your patients at the time of scheduling their care. It’s also beneficial to provide a reference sheet to your team so they can inform and educate patients about their payment requirements for various types of care.
Collect payments upfront
Many practices that collect outstanding balances or expected payments upfront at the time of service (or front-end point-of-service collections) have a higher net collection rate. Implement rules within your practice to ensure your practice collects copayments, deductibles, and other fees at the time of service instead of billing later.
This step reduces friction and improves efficiencies. It also ensures patients know what their financial expectations are.
Make payments easy to make
When patients need to make payments, ensure the process is as easy and versatile as possible, providing strategies to meet most patient needs. For example, consider any of the following tools to implement:
- Financing: Some medical providers offer financing or take partial payments for elective procedures over time and then schedule care once the patient makes the final payment. Consider alternatives, including low- or no-cost financing so patients can make monthly payments.
- Accept credit cards: Though not feasible in every situation, by accepting credit and debit card payments, you make it easier for patients to make their payments easily in the office or over the phone. Consider accepting mobile payment applications as well, such as Venmo and PayPal.
- Use apps and portals: Provide your patients with easy online tools to make payments. This includes online patient portals as well as mobile apps for your service.
Enforce accuracy in your net collection rate
For many healthcare practices, net collection rate is an RCM key performance indicator (KPI). This means you may be monitoring it every quarter or more often to track improvements. If you plan to do so, focus on these key areas to follow accuracy best practices:
- Create a plan for improving your net collection rate: Choose actionable steps to take to improve these metrics.
- Start with small improvements: It’s more likely that you’ll see steady improvement through the application of new payment strategies of upfront payment collections. Create a strategy and stick with it.
- Track your figures over time: Use a resource to help you track this KPI, which is one of the many factors contributing to your organization’s financial stability.
Investigate and address denials
Insurance claim denials are a common reason for a low net collections rate. If you notice this as a factor in your KPIs, start working on this area first. Ask yourself and have your RCM team join in on the answers to these questions:
- What information is coming in about why your healthcare service is receiving denials? Are you taking action on these immediately?
- Are important deadlines or milestones not being met, such as essential claim requirements, follow-up claim status, and claim submission delays?
- Are any errors causing the problem? If so, what are they and which ones are showing up more than others?
Note that underpayments and denials from insurers are not always accurate. You should have a process in place to follow up with each of these to ensure accuracy.
