Your Net Collection Rate is one of the most important metrics for understanding your ophthalmology practice’s financial health and success. But how well do you understand its importance?
Medical practices need to monitor the success of their collections in order to spot any problem areas and minimize losses. If your practice deals with late filings, billing errors, claim rejections, or underpayments, you’re likely struggling to collect revenue. All of these things lead to a low net collection rate.
What is the Net Collection Rate?
The net collection rate refers to collecting the revenue you should be able to collect. It’s calculated by dividing the total payments for a period by the total charges for that time period minus the approved write-offs. These write-offs can be bad debt, discounts, overpayments, contractual allowances, and so forth.
What’s a ‘Good’ Ophthalmology Net Collection Rate
Ideally, your practice should aim for a collection rate of 95% or higher. If your clean claims ratio is less than 95%, this is an indication that your practice is suffering from revenue loss due to errors and claims rejections. If it was, for example, 80%, 20% of your claims submitted every month have errors or problems and have to be resubmitted. Every time this happens, your practice is not maximizing its earning potential.
A Net Collection Rate of 95% is a great sign that your practice is effectively managing its revenue collections. If your rate is between 90% and 94%, your financial health is pretty good, but with room for improvement. If your rate is less than 89%, your coding and billing systems may be preventing your practice from reaching its full potential. This means you may need to outsource your medical billing to a professional.
How To Improve Your Ophthalmology Net Collection Rate
Monitoring collections and regularly calculating your net collection rate is the best way to spot troubling trends and minimize undue losses. Here are some tips to help improve your Net Collection Rate:
- Implement an automated front-end system so that 100% of copayments and deductibles can be collected at the initial point of service. This prevents patients from leaving the office with outstanding bills and helps your staff avoid the hassle of chasing payments afterward.
- Outsource your billing processes to avoid any problems. These problems can be submitting claims, entering incorrect codes or modifiers, missing payment deadlines, or inputting errors in patient information. All of these problems can lead to denials and delayed payments.
- Track other financial metrics, like your accounts receivable, outstanding bills, and write-off percentage.
How Eye Care Billing Consultants can Help
If your practice has a low Net Collection Rate, you can benefit from outsourcing to the professional ophthalmology billing specialists at Eye Care Billing Consultants. We use the latest billing technology to help your practice get the highest collection rate possible. Our medical billing professionals provide support from start to finish, beginning with client registration, claim creation and submission, denial management, accounts receivable, and collections. Furthermore, we help you understand your financial health with regular reviews, reporting, and practice analysis. By utilizing our streamlined systems specifically designed for ophthalmologists, you can focus on providing your patients with the highest level of care.