Recover Up to $240,000 Annually per Physician: The Impact of Effective Billing Strategies

patient reimbursement

Unlocking Hidden Revenue Streams 

Did you know that U.S. healthcare spends one-fifth of the GDP, approximately $4 trillion, on healthcare, with a staggering quarter of that amount devoted to administration? A significant portion of these administrative costs stems from complex billing processes, consuming valuable time and resources. For healthcare CFOs, this represents a critical area for potential revenue recovery and operational optimization.

Physicians' Revenue Loss Due to Billing Work

Physicians are increasingly finding themselves entangled in administrative work, sacrificing valuable patient interaction time. As one internist in Chicago aptly describes, "In my clinical role, I love seeing patients, but it comes at a cost. I spend only a few minutes diagnosing but then need 10 to 15 minutes to document everything just to ensure I get paid." This administrative burden translates into a significant financial loss, with estimates suggesting that physicians lose between $68,000 and $85,000 annually in revenue due to time spent on billing and insurance matters.

The Impact of Reimbursement Denials

Billing inefficiencies not only consume valuable physician time but also contribute to substantial revenue losses due to reimbursement denials. In 2019, approximately 9% of reimbursement requests were denied by payers. By 2023, this figure had risen to around 12%, resulting in a potential revenue hit exceeding $100,000 for a practice with $1 million in billings. This figure represents a significant 10% loss in revenue, underscoring the critical nature of efficient billing practices.

However, the 12% of billings ultimately written off by providers only scratches the surface. The initial rate of denial is often much higher, meaning healthcare providers invest countless hours attempting to mitigate these losses. The time and resources spent on managing denials could be better allocated to direct patient care and other critical tasks.

Outsourcing Billing: A Pathway to Revenue Recovery

Given the challenges and inefficiencies associated with in-house billing, many healthcare practices are turning to outsourcing as a solution. According to the 2016 Merritt-Hawkins report on physician salary survey data, the average primary care doctor generates approximately $1.4 million in revenue for their organization annually.

By outsourcing billing, healthcare organizations can recover up to $240,000 in revenue per physician each year. This recovery stems from two primary areas: the reduction of patient reimbursement denials and the reallocation of time saved from administrative tasks to patient care.

A reliable third-party partner can manage all aspects of the revenue cycle, from pre-authorization and coding to billing and collections. They can also provide valuable analytics, offering insights into account aging, payer behavior, and patient responses to reimbursement changes. This holistic approach can alleviate cash flow challenges, enhance patient acceptance of reimbursement, and minimize the incidence of non-eligible patients.

Evaluating the Need for Outsourcing

Healthcare practices must consider several factors when deciding whether to outsource billing. As suggested by Dan Schulte, SVP of healthcare at HGS, key indicators include:

  • Outdated Patient Accounting Systems: If your system is antiquated and requires replacement.
  • Credentialing Challenges: Persistent issues with credentialing can be streamlined through expert outsourcing.
  • Changing Reimbursement Models: The constant evolution of reimbursement structures necessitates adaptive management.
  • Weak Net Revenues and Cash Recoveries: Underperformance in revenue and cash flow can be addressed with specialized support.

The FYDI Advantage+

FYDI medical agents are seasoned experts in healthcare billing, offering HIPAA-compliant services tailored to meet your specific needs. With dedicated account managers and customizable services, FYDI provides comprehensive revenue cycle management, ensuring regulatory compliance and delivering measurable ROI.

To explore how FYDI can optimize your practice's billing processes and enhance revenue recovery, check our services or book a free consultation today.

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References

  1. Weaver, Elizabeth Woodcock. "How Doctors and Practices Can Rein in Administrative Burden." Medical Economics, 10 Mar. 2023, www.medicaleconomics.com/view/how-doctors-and-practices-can-rein-in-administrative-burden. Accessed 1 Aug. 2024.

  2.  

    Greiner, Carolyn, et al. "Exploring the Relationship Between Burnout, Moral Injury, and Professional Fulfillment in Physicians." SAGE Open, vol. 9, no. 4, Dec. 2019, doi:10.1177/2158244019899092.

  3.  

    "How Much Revenue Do Primary Care Physicians Generate?" UHC Solutions, 19 Sept. 2023, www.uhcsolutions.com/how-much-revenue-do-primary-care-physicians-generate/. Accessed 1 Aug. 2024.

  4.  

    Woodcock, Elizabeth. "The Pros and Cons of Outsourcing Billing." Medical Economics, 27 Feb. 2024, www.medicaleconomics.com/view/the-pros-and-cons-of-outsourcing-billing. Accessed 1 Aug. 2024.

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