How to manage your billing team (In-house or Outsourced)

And the thing that I would say about how to know when your billing solution is doing their job correctly is that it's not like every other metric we have in our business. It's not like a physical therapist who does so many visits per week. The number one problem I've had in starting my billing company was knowing how to create metrics for my team to know how much they can do in a period of time. Like, we know visits per week for pts, but what do you do for billers when one system is totally different than another and it requires a totally different work load to do simple tasks? So what I'm going to share with you guys is going to highlight what you guys already know and hopefully even simplify it in a way to where you're constantly keeping your thumb on your billing. So the biggest mistake I have experienced when I work with clients is that they are always looking at their billing retroactively. Right? And that's typically how our billing solutions work. They're like, okay, let's have a meeting, if you even have them. But if there is a billing meeting, it's typically all right. So here's the accounts, here's the ar, here's what we've done. There's no talk about moving forward. And that's where we drop in leadership. The power is in the future thinking and planning. But we don't know how to do that as business owners because especially in the medical billing space, this is a very complex world. It really is. It's even more complex than I thought. I thought I knew billing and collecting very well when I went to my sixth solution that ended up working so well. But having owned this company has totally opened my mind into the absurdity and the absolute ridiculousness of how these companies operate and how challenging they make it for you to get your money. So oftentimes, really good people start billing companies and they drop the ball because of the complexities, because they don't know how to run a business. And so what I'll share with you are the. In my mind are the ways to look backwards and forwards to help you oversee your billing and always know where your money's at. So let's start with what we typically do, which is the retroactive stuff, which is very important. We look at the accounts receivable. When I speak about it, like in terms like, you've never heard this before, so many of you know this, but that's. Let's just start from the basics, right? Accounts receivable, that's the report that shows us Money we are expecting to receive. These are patient accounts that we are waiting to receive ar and it's broken down into various time frames. It's done a little bit differently. This is for today. I'm just going to keep it pretty simple. So 0 to 60, 60 to 90, 90 to 120.

And then greater than 120.

So obviously in billing, it's a time game. Insurances know this. They are constantly trying to create little rules that make you delay getting your money. The longer that you go without getting your money, the sooner they can get to timely filing, which means they don't have to pay you at all, which is absurd, by the way, that there's like, there's a point in which they don't have to pay you at all. Think about any company. If you don't pay them, eventually they would sue, right? But not in healthcare. So we want most of our money here. So what we want is 75% or greater of all of our money in that first bucket of 0 to 60 days. We want 5% or less in the next two buckets and we want 15% or less in the 120. So for my billing company, one of the two main statistics we track for their performance when they're over an account is anything greater than 120. You know, as you guys were talking, you can do it different ways. You can do 90 or greater or 120 or greater. 120 and greater for us. And we do take out liens and motor vehicle stuff because that's in all workman's comp, because that's a totally different system. So unless you're heavily invested in those two types of reimbursements, this statistic right here is the one that we can watch to see what ultimately isn't being done. And so, yeah, there's like red, yellow, green for statistics, right? The yellow Range is between 15 and 20. Green is anything below 15. And if your company can do it under 10%, that means typically they're doing a very good job. So the accounts receivable is a great place to start looking retroactively. Other statistics that I recommend are, and you guys have pointed this out already, that not all these statistics on their own are very powerful. But. But I like to know my reimbursement per visit.

Average, knowing it's going to shift. But here's the thing. We want to track this every month for the year.

Monthly and quarterly. I have a form if you guys are interested in getting that. Actually, just the billers would put that in place for me. And then let's just put the Q for the quarterly because I can't talk and spell at the same time. So the money per quarter, like that way you're just watching it, it's never your average. Is what you're looking for over time. Where we have how much money per visit am I getting over time? That really helps later in the CFO job that we should be wearing, which is, all right, how much is it costing me per visit versus how much is it making me per visit versus how much am I netting per visit? But that's an important metric. Other people will look at percentage, percentage of collections, which is fine, but there's so many factors in this. You know, some people are like, well, 40% is great. It totally depends on your fee schedule, your payer mix, and all those different items. But when you're looking retroactively, those are typically the main metrics. I'm a big fan of the ar looking at your money per visit. And then you can dial down from there into everything else, like visits. On visits that are not paid because of off authentic. All those details, you can get really deep. But if we're looking at just the. I'm trying to give you guys the smallest amount of information to give you the greatest knowledge of where your money is. So for. For you moving in forward in particular, this is the thing that no one measures, and this is the thing we do it in the black. That is our secret sauce. That isn't a secret, because we want every billing company to do this, is they start projecting their income. If we're paying a biller or an outsourced solution to do our billing and collecting, they should tell us in advance what they're supposed to achieve. And that drives me crazy that no one else did this for me until Katie came around, my partner, she would say, hey, well, your job. My job is to tell you how much money I'm gonna go collect, not just how much I did collect. And that shifted everything for us as a company. When I sold my company, my company wasn't the biggest or even the second biggest. We merged with five companies. Mine was the third biggest in terms of patient visits. But I got paid more than anyone else. And do you know why? Because I collected more per visit, I was more efficient, thanks to Katie. So what we do, we can create this very easily in Excel. And I have a template if you guys would like that as well. I'm happy to give it to you to give to your company. I don't care. It's not proprietary is that we created a graph. And. And what we do is we have two lines. One will show what the.

Expected collections are.

Okay. So we do this on weekly. We do this on a weekly basis, and we update this every week. And how we get there is really simple. You want to take your average collection per visit.

And then you want to multiply it by the number of visits that you did two months prior. So if we're in. If we're projecting March, we're looking at January. It's not an exact science. Again, when you're doing this for a year or more, it becomes way more reliable. Okay. And so every month, this line will shift. It will go up, down a little, but it stays relatively flat. It will adjust, but it stays flat. And then we mark how much we actually collected each month.

The average should always be 100%. So the other metric we give our billers is that they need to be collecting above 95% of their expected collections for that client. So that way we're not waiting for cash flow. Because in cases where we run out of money, this is what happens. Inevitably, billers are hiding something. The fact that they're not doing their job or whatever. Like, maybe they're ignorant. They don't know what they're doing. And so if this is the number we should have been expecting, as things get worse, things are going like this, but we don't know it. And then, like, we'll have a good week. Oh, things are getting better. But when you're looking at the overall trend, it's like, no, we are losing money. And so whenever we have a situation where our billing company has screwed up and we're monitoring their progress, we have to go into future focus mode, where we start projecting everything that they're going to be making, and we monitor it every single week. Okay. How they do it this week versus last week, are we trending up? And especially in cases where they've dropped the ball, I would also recommend that we go retroactive a little bit, like maybe the previous month to two months, and chart those exact same graphs so you can see over time if they're actually getting your money sooner, if that makes sense. So, again, there's lots of other ways you can measure billing, but the big thing I wanted to focus on was the quickest way to look at your history and the easiest way to look at your future so that you know where your money is.