Speeding Up Cash Flow: Unveiling the Cost of Delayed Medical Billing

Speeding Up Cash Flow: Unveiling the Cost of Delayed Medical Billing

The impact of high turnaround times from billers in medical billing is often overlooked, but it affects us all. Delays in processing times create financial strain for healthcare organizations and patients. By understanding the hidden costs and inefficiencies, we can improve the process for better financial outcomes.

Previously, we discussed how initial delays in medical billing can stem from factors beyond the biller’s control. However, when an apparent completed claim is handed over to the biller, it is not uncommon for further delays to occur due to the sheer volume of incoming claims billers must handle.

One to two months are considered the average claim submission time. However, to paint a vivid picturefrom first-hand experience, we worked with a practice that discovered their average time was a staggering 110 days, or just over three and a half  months. They managed to bring the biller’s processing-time down to one day by leveraging advancements in technology.

Though delays are common in medical billing, they come with significant costs. Let’s delve into numbers to better grasp the magnitude of the issue.

Recent studies reveal surprisingly slow turnaround averages for medical billers to process a claim – anywhere from one to two months – highlighting both the substantial time investment involved and the mountain of claims passing over their desks.

Leveraging technological advancements in the field of medical billing highlights the potential for substantial time and cost savings.

But why does speed matter?

Aside from cash-flow disruption – which can make it challenging to meet financial obligations, such as paying for staff salaries, leases, or purchasing supplies – it is estimated that delays in billing and reimbursement cause healthcare providers to lose up to 30 percent of their potential revenue. With nearly a third of the revenue at stake, imagine the impact this has on the overall healthcare system. We’re talking hundreds of billions of dollars lost each year.

To put these claim quantities and revenue at stake into perspective, consider a bustling hospital with hundreds of patients coming through its doors every day. Each patient requires various medical services, from tests to surgeries. All of these services need to be billed and reimbursed properly to keep the hospital (or practice) running smoothly. However, with a delayed turnaround time from medical billers, a substantial chunk of revenue is left hanging in the balance.

Two things can happen as time goes by. One is that the provider who performed the service may no longer be with the practice or hospital, for whatever reason, and thus is no longer able to answer questions. Therefore, the money falls off the table.

The other thing that can happen is that delayed claim submissions bump up against a closed insurance submission window. The more delay, the higher the rejection or denial rate, due to errors in rushed submissions or discovery of lack of information.

When the submission window closes, revenue is lost.

Now, let’s talk about solutions. The good news is that the healthcare industry is not turning a blind eye to this issue.

With advancements in technology and the rise of artificial intelligence (AI), healthcare providers are exploring billing systems that leverage machine learning algorithms to automate the submission of claims and track their progress. This helps billers process more claims, faster, decreasing the chances of delays and increasing revenue.

Additionally, electronic health record (EHR) systems are being integrated with billing software, enabling real-time documentation and immediate claim submission. This integration eliminates the need for duplicate data entry and reduces errors, speeding up the billing process.

By adopting these technological solutions, revenue cycle management becomes more efficient, and clinics, hospitals, and practices can focus on what they do best: providing excellent healthcare to their patients.

Programming note: Listen to Susie Vestevich report this story live today during Talk Ten Tuesdays, 10 Eastern, with Chuck Buck and Dr. Erica Remer.

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