Are You Doing Your Own Billing?
1. First, figure how much money you are spending, and how much money you are losing, by doing it yourself or paying your own staff.
- How much time do you spend on the phone per month doing insurance related things that could be done by someone else?
How much money do you make seeing clients per hour?
- How much time do you spend buying the supplies or maintaining the equipment or software needed? Buying printer ink? Shredding forms with mistakes, etc?
- How much time do you spend reading updates from insurance companies, trying to keep up with insurance changes related to NPI numbers, HIPAA, etc?
- How much time do you spend on hold waiting for insurance company staff to talk to you?
- How much time do you spend training and retraining your own staff?
- How much time do you spend on paperwork that could be done by someone else?
- Do you enjoy doing these insurance and billing related tasks?
Multiply the hours you are spending by your rate per hour. This is your cost in lost revenue in terms of your time.
Hourly Rate x Number of Lost Billable Hours per Month = _____________ Lost Revenue
And if you hate doing these tasks and would rather spend two hours doing therapy than one hour doing them, factor that in, possibly increasing the value of that lost revenue figure by as much as a multiple of two. If you enjoy doing these tasks, and would rather do them than therapy, you may choose to reduce the figure above.
2. Second, estimate your lost opportunity cost.
- How many more clients do you estimate you could attract if you spent the time marketing your practice instead of doing secretarial and billing work?
- How much more networking, public speaking, writing or other activities would you do?
- Or would you take a walk, meditate, or do other things that would improve your work performance?
Consider whether you would have time and energy to market your practice more, grow your practice more, or create you ideal practice if you didn't have such insurance billing chores? Nobody can market your practice the way you can, but someone else may well be able to do insurance billing better than you. And would you have more energy to devote to your practice if you could get rid of tasks you dislike?
How many unpaid claims do you have because you have not had the time and patience to follow-up on them? Be honest with yourself here. Are you really spending the time need to follow-up and get the claim paid, or do you give up because your time is more valuable than the relatively small amount of money you will get to collect the claim? Are you "leaving money on the table?" that a dedicated, detail oriented, clerical type person who expects to make far less money per hour than you would go after for you? Do your accounts ever get so messed up that it takes you months before you send a patient a statement, or just write off a balance entirely because you can't figure out how to get it to balance properly? What is your current rate of collections?
Many therapists hate insurance follow-up on rejected claims and avoid doing it. To them it seems like a small amount of money and not worth the drudgery.
Do you ever lose money because you fail to keep track of your authorizations?
Lost Opportunity Cost Estimate = $___________
3. Third, figure your expenses for billing and claim filing.
How much do you pay staff per month, including taxes, worker's comp, etc? How much do you spend on postage, paper, printer ink, supplies, claim forms, clearinghouse fees, etc? How much do you spend on software and how much on software maintenance fees? How much office space and filing space would you gain if you outsourced or used a telecommuting virtual assistant rather than an in-house employee? Are there any services you pay for that you would not need if you outsource your billing? Would you be able to cut back on a phone line or another expense?
Expenses Incurred per Month for billing = $________________
4. Fourth total the three figures above.
Lost revenue + Lost Opportunity + Expenses incurred = total cost of billing |
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