10 Benchmarks for Billing and Collections

Here are 10 billing and collections benchmarks you can use to gauge the efficiency of your ASC. Look for coverage of billing and collections and best practices to improve their efficiency in the Nov./Dec. issue of Becker’s ASC Review.

1. Days in A/R — Fewer than 45 for ASCs with a combination of paper and electronic billing; 20 to 35 days for centers conducting mostly electronic billing, which includes submitting electronic patient statements, suggests Vickie Sanders, vice president of business office services for Nueterra Healthcare.

2. Insurance verification — Within three to five days before date of service, suggests Alexandra Reyes, RN, administrator for Treasure Coast Center for Surgery in Stuart, Fla.

“You don’t always get an authorization at the moment when you make that call,” she says. “But as soon as insurance verification is completed, you need to turn around and call patients to notify them of their responsibilities, at least three to five days prior to their date of service. It's only fair to make them aware of what their deductible or co-pay will be to avoid any problems on the day of surgery.”

3. Transcription — Within 24 hours or less after the procedure is performed, suggests Ms. Sanders.

4. Coding — Completed within 48 hours or less. “The claim should also go out the door the same day the case is coded and charged,” says Ms. Sanders.

5. Claims billed out — Within 24 to 72 hours from date of service, suggests Ms. Sanders, with the higher-end target to account for possible delays caused by issues such as time needed to resolve any discrepancies concerning procedure information or slow dictation from surgeons, but 72 hours should be the exception and not the rule. You may want to consider a more aggressive benchmark — with the understanding that occasional issues will hold up the process — and target to have claims sent out within 24 hours, as is the benchmark for Treasure Coast Center for Surgery.

6. Claims follow-up — Within 28 days for those that remain unpaid, says Ms. Reyes. “All claims need to be touched, again, at least every 28 days until the claim is resolved,” she says.

For centers filing mostly electronic claims, you may want to keep that benchmark lower.

“We’re always looking to see if (our centers) are following up on their accounts in a timely manner,” says Ms. Sanders. “If they know they’re getting paid every ten days from a payor, then they should have a 15-day review if they haven’t received payment.”

7. Denial rate — 1 to 2 percent, suggest Ms. Sanders. “Tracking the reason you are not getting paid the first time a claim is billed is very important,” she says. “You need to identify the reason for denial and fix whatever the problem might be so that future claims will be paid the first time you bill, which will reduce the expense associated with claim filing and give you access to your cash that can be used for other expenses.”  

8. Accounts per collector — Ms. Sanders suggests that a new center staff one collector per 350 to 400 cases performed per month. When reviewing your outstanding A/R, you should have one collector assigned per every 800 accounts, with the business office manager monitoring the collection activity closely to ensure accounts are being worked at a minimum of every 15 to 30 days, she suggests.

“We look at the number of accounts our centers have outstanding in their receivables,” she says. “If the center has been open for awhile and there are 2,400 outstanding accounts, and a collector can only follow up on about 800 accounts per month or 40 accounts per day, you would need three collectors to work through the entire receivable in one month.”

9. Cash collections as a percent of net revenue — At a minimum, the collection goal should be 100 percent of your monthly average net revenue for the preceding three months, suggests Ms. Sanders.

“We track and trend this goal monthly, and if we are short in our overall collections for the month, the collection shortfall is added into the next month's collection goal,” she says. “By adding back in the cash shortfall from the prior month to our current month's collection goal, we anticipate at the end of the year we will have reached 100 percent cash to net revenue for that year.”

10. Aged A/R greater than 60 days and aged A/R greater than 120 days — Less than 25 percent of your A/R in the 60-day bucket and less than 10 percent in the 120-day bucket, suggest Ms. Sanders.

“We monitor our A/R closely, watching what percentage of A/R rolls into all buckets but specifically these buckets,” she says. “If the A/R starts to climb in these two buckets, a manager will review in detail what might be causing the increase in AR. The manager may add additional resources if necessary or identify that there are one or two accounts that are causing the problem and escalate the work effort to get these accounts paid. Monitoring your A/R buckets is critical in keeping your AR clean and not letting it get out of control.”