Is Your Billing Software Warning You About These Red Flags?

Billing problems can be a huge headache, and seriously hurt your practice's bottom line. If you're constantly chasing down payments or resolving errors, it's crucial to identify these red flags before your revenue cycle takes a dive. Luckily, your Electronic Medical Record (EMR) can be a valuable tool in pinpointing and fixing these issues. 

However, if your current physical therapy billing software is adding to the chaos or not providing the data you need, it might be time to re-evaluate your system.

Here are three key warning signs to watch out for:

1. Accounts Receivable (A/R) Over 90 Days Make Up 20% Or More Of Total A/R

This metric indicates the portion of outstanding payments that are significantly delayed. In the healthcare industry, payment collection typically takes 45 to 50 days after service. If it exceeds this timeframe, the likelihood of bad debt increases. A prolonged delay reduces the probability of payment, with collection rates dropping to 10-15% after 90 days.

Here’s a simplified example: If over 20% of your expected income remains in A/R over 90 days, you may only collect a fraction of it. Aim to keep A/R over 90 days under 20%.

How Your EMR Should Help:

• Utilize automated billing and claim submission features to minimize errors and delays.
• Access real-time claim status data to identify and resolve issues promptly.
• Enhance client communication through automated reminders and secure messaging to reduce overdue balances.

2. Claim Denial Rates Over 5%

Claim denials signify missed revenue opportunities and hinder your practice’s financial health. Once denials accumulate, catching up becomes challenging. Addressing denials promptly is essential as they lead to significant financial losses and hinder practice growth.

How Your EMR Should Help:

• Ensure accurate documentation of client encounters to support claim validity.
• Utilize an EMR with AMA-licensed billing code selection.
• Track claim status and promptly address rejections or denials to maximize reimbursement.

3. Cash as a Percentage of Net Revenue Under 95%

This metric reflects your practice’s efficiency in converting revenue into cash flow. Ideally, it should be around 95%. A lower ratio indicates inefficiencies in payment collection, impacting your practice's financial stability.

How Your EMR Should Help:

• Implement fully integrated EMR billing to streamline the billing process.
• Utilize reporting and analytics features to monitor financial performance and KPIs.
• Leverage billing software to automatically calculate financial metrics and gain insights into your practice’s financial health.

Remember your EMR can be a powerful ally in identifying and addressing billing issues, but sometimes, managing these tasks in-house can still be overwhelming.

This is where partnering with a reputable billing company can make a significant difference. By outsourcing your billing needs, you can alleviate the stress of managing complex billing processes, allowing you to focus on providing quality care to your patients.

If you're ready to take the stress out of billing and ensure your practice's financial health, consider partnering with us. Advanced Rehab Management Services offers specialized billing solutions tailored to the unique needs of rehabilitation practices. 

With a deep understanding of the intricacies of physical therapy billing, we provide comprehensive support to ensure efficient revenue management. Contact us and let’s see how we can work together to increase your revenue!