This document discusses how medical practices can improve their revenue cycle management and profitability. It states that on average, 15% of medical practice revenues are lost to unpaid claims, amounting to $150,000 lost for a $1 million practice. It promotes a comprehensive revenue cycle management service that can reduce costs, accelerate cash flow, and improve efficiency. It also outlines key performance indicators that practices should analyze, such as the percentage of accounts receivable over 120 days and adjusted collection rate, and provides industry benchmarks for these metrics.

1. IMPACT YOUR BOTTOM LINE
FACTS
According to the AMA, a medical practice loses over
15% of revenues to unpaid claims.
Do the math: For a two physician practice that
generates $1 Million in revenues, that’s $150,000
left on the table.
MAXIMIZE YOUR PROFITS
Improve your practice’s profitability with Emerald
Health’s comprehensive Revenue Cycle
Management service:
• Reduce costs
• Accelerate cash flows
• Improve productivity & efficiency
Focus on the key drivers to your practice’s longevity:
patient care and quality
KEY PERFORMANCE INDICATORS
Analyzing your practice’s key performance indicators
and benchmarking against industry averages is
necessary to identify areas of improvement.
Following indicators are the most essential in
gauging the health of your medical billing operations:
Percentage of A/R over 120 days
Amounts Owed to the Practice by patients, third
party payers, etc. that is GREATER than 120 days
old.
Adjusted Collection Rate
Collected revenue divided by net charges
(allowable). Out of $100 that a payer allows for a
certain CPT code, how much do you collect?
Days in Accounts Receivable (DAR)
= Total Receivables / (12 month gross
charges/365).
Cash
How much cash are you collecting?
MEDICAL BILLING BENCHMARKING
Percentage of A/R over 120 days
BEST IN CLASS: <12%
Industry Average: 12-20%
Red flags: >20%
Adjusted Collection Rate
BEST IN CLASS: >98%
Industry Average: 96-98%
Red flags: <90%
Days in Accounts Receivable (DAR)
BEST IN CLASS: 25-35 days
Industry Average: 40-45 days
Red flags: >65 days
Cash
Compare cash balances MoM, QoQ, YoY. Are
there any noticeable trends? What factors are
causing these trends?
Is your practice benchmarking?
WHY EMERALD HEALTH?
Maximize revenues
Reduce costs; payroll expense, employee
turnover, training costs
Accelerate cash flows; decrease DAR,
increase cash balances
Have greater transparency on key
performance indicators
Improve productivity that allows your
practice to focus on your patients
Comprehensive - Low flat rate billing
Take advantage of our
FREE REVENUE CYCLE ASSESSMENT
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Billing Services – Revenue Cycle Management
© 2012 by Emerald Health LLC. All Rights Reserved.