If you’re an executive overseeing a Federally Qualified Health Center (FQHC), it is likely that your primary mission is to provide quality healthcare to the community. Robust billing systems and processes are essential to achieve this goal and ensure the center’s long-term success. One crucial performance metric that can guide your decision-making and provide valuable insights into your FQHC’s financial standing is the ratio of paid and unpaid claims.
Discover how our team at Synergy Billing uses this data to help community health centers around the country unlock the potential of their organization.
Paid Claims vs. Unpaid Claims: An Overview
What are we looking at when we analyze the paid claims of an FQHC? The claims paid ratio we uncover is the percentage that represents the number of claims successfully reimbursed by insurance providers or government payers compared to the total number of claims your FQHC submits.
Typically, when you have accounts receivable (AR), that means you’re making money and waiting to get paid, but it’s not always a good thing. Sometimes there are false positives where it looks like you’re still owed money, but the adjustments just haven’t occurred yet. For every payer contract, we typically have contractual adjustments. Sometimes partially paid claims are left sitting out there on the books.
We look at the volume and percentage of how many claims have been paid. We want to see 95% of claims receive a payment within 60 days of service. This ratio serves as a valuable indicator of your center’s billing efficiency and overall financial health.
Assessing Billing Efficiency:
A high percentage of claims paid suggests that your billing department is effectively processing claims, leading to timely reimbursements. Conversely, a lower ratio might raise concerns, indicating potential issues with your billing practices that need to be addressed.
Identifying Revenue Leakages:
A lower ratio of paid claims to unpaid claims can indicate revenue leakages. Revenue leakages are the amount of money you have earned but haven’t quite collected yet. This can happen due to a variety of reasons, like waiting on adjustments from insurers or payments from patients.
Revenue leakages hinder your FQHC’s ability to provide the best possible care to patients. By closely monitoring this paid claims ratio, you can identify and rectify billing inefficiencies, improving your revenue stream and optimizing your center’s financial performance.
Enhancing Service Quality:
The amount of paid claims of your FQHC is indirectly linked to the quality of services your community health center can provide. An increase in unpaid claims might indicate that your billing department is struggling to keep up with the administrative workload, leading to potential delays in claim submission or inaccuracies.
This is why using your paid claims as a performance metric can serve as a starting point for streamlining your billing process and ensuring your staff can focus on delivering top-notch care to your community.
Optimizing Resource Allocation:
Understanding the dynamics of your percentage of paid claims can assist you in making informed decisions about resource allocation. By pinpointing the areas where claims are frequently denied or delayed, you can allocate resources strategically to address these challenges. This could involve additional training for billing staff, upgrading billing software, or collaborating with insurance companies to identify and resolve common billing issues promptly.
Navigating the Complexities of Insurance Companies:
Dealing with various insurance companies and government payers can be complex and time-consuming. The ratio of paid claims can help you identify which payers have higher rates of denials or delayed payments, enabling you to centralize your engagement with them and potentially renegotiate terms for better payment outcomes.
Best Practices to Improve the Percentage of Paid Claims
Remember: here, at Synergy Billing, we want to see that 95% of your claims are paid within the first 60 days. But this doesn’t always come easily for many FQHCs. Boosting your paid claims ratio may require a comprehensive approach. Here are some best practices to help you enhance billing efficiency and overall FQHC performance:
- Regular Data Analysis: Analyze data regularly to identify patterns, trends, and recurring issues affecting the percentage of paid claims. A third-party analysis, like Synergy Billing’s Assessments, can be an efficient way to use that data to strategize tangible next steps.
- Staff Training and Development: Invest in continuous training for your billing team to keep them updated with the latest billing regulations and coding practices. Need an easy solution? Ask us about our Billing Bootcamps!
- Implement Technology Solutions: Consider using advanced billing software that streamlines claim submission and automatically identifies potential errors, minimizing the risk of claim denials. Additionally, during a Synergy Billing assessment, we will uncover the technology issues that are impacting your revenue and make recommendations for improvement.
- Robust Denial Management Process: Establish a well-defined process to manage denied claims promptly and efficiently, reducing revenue loss due to underpaid or unpaid claims. Insurance companies don’t make money when they pay claims. It’s our job to make sure they do it anyway.
- Engage in Payer Communication: Foster strong communication channels with insurance companies and government payers to resolve billing-related issues promptly. Building strong relationships with the insurance companies and government payers your health center works with can create longevity of better results.
- Patient Education: Educate patients about the importance of providing accurate and up-to-date insurance information to minimize billing delays and denials. This is a factor that doesn’t necessarily require monetary investment either. Remember, increasing revenue doesn’t have to mean increasing operating costs.
By understanding the significance of paid claims vs. unpaid claims and embracing data-driven decision-making, you can drive your FQHC toward greater financial stability and enhanced patient care. Utilize this valuable performance metric as a guiding light to illuminate your path toward a thriving and successful Federally Qualified Health Center, serving the community with exceptional healthcare. And when you’re ready to work with specialized experts in all areas of revenue cycle and billing operations, give Synergy Billing a call!
Check out this short video of Jayson Meyer, CEO of Synergy Billing explaining paid claims.