How to Calculate Medical Billing Costs

Medical billing is a mission-critical yet complex area of practice management. Without measuring costs of billing, the practice owner cannot manage it. Your total cost is the sum of lost collections due to billing quality, billing personnel expense, capital investment, your own time, and the cost of lost opportunity to develop your practice. Steps: 1. Measure Billing Quality. What is your adjusted collections rate? What is the percent of your claims paid within 15 days and 60 days? What percent of your accounts receivable is above 120 days? 2. Calculate your personnel cost. Include benefits, training, replacement, motivation, vacations, conflicts, sick days, employee payroll, payroll taxes, insurance benefits, retirement plan contributions. 3. Measure your capital expense on billing. Include capital investment in software and hardware, monthly maintenance, backups, disaster recovery, replacement, training, telephone systems and supplies. 4. Measure lost time. Include your own time required to follow up on especially complex cases. 5. Estimate lost opportunity costs. How much business could you bring to your practice if you spent the time marketing it instead of following up on claims, managing personnel, or dealing with software problems? originated by: Yuval, Jack Herrick, Anonymous, james_uk Source: www.wikihow.com