Your Net Collection Rate is one of the most important metrics for understanding your practice’s financial health and success. But how well do you understand its importance?
All medical practices need to monitor the success of their collections in order to spot any problem areas and minimize losses. If your practice is suffering from issues with late filings, billing or coding errors, claim rejections, and claim underpayments, you are likely struggling to collect revenue. All of these things lead to a low net collection rate.
What is the Net Collection Rate?
It 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 (such as bad debt, discounts, overpayments, contractual allowances, and so forth).
What’s a ‘Good’ Ophthalmology Net Collection Rate?
Ideally, your practice should aim for 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.
If your Net Collection Rate is already 95%, that’s a great sign that your practice is effectively managing its billing methods and revenue collections. If your rate is between 90% and 94%, your financial health is pretty good, though there may be 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, and 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, which 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 with submitting claims, entering incorrect codes or modifiers, missing payment deadlines, or inputting errors in patient information, all of which lead to denials and delayed payments.
- Track other financial metrics, like your accounts receivable, outstanding bills, and write-off percentage.
If your practice has a low Net Collection Rate, you can benefit from outsourcing to a professional ophthalmology billing specialist like 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.
