26 March 2009

Velocity tracking

One of the metrics we monitor at our practice is the speed with which monies are collected.  Mostly this reflects on the performance of the billing company.   Generally it's a good thing to know how many "Days in AR," or days of charges still in the accounts receivable.   Low numbers are better, reflecting less "inventory on the shelves" and a shorter time from service provided to payment received.   This number can, however, be "gamed" if the billing agency were to move delinquent accounts off the books rapidly.   Ideally, they will rapidly write off the obviously uncollectable accounts (i.e. homeless patients with no billing address, charity cases, and the like), while keeping the accounts that have potential on the books and working them to collect what they can. 

One other fun thing to do is compare the payers against one another to see who's paying in a timely manner and who is not.  (Widen the browser window or click here to see the full image.)Payer Velocity
Your mileage may vary.  Our state is an aberration in that traditional Medicaid is a very fast payer; compare that to Illinois, where they are eight months behind.   Of course, we joke, it doesn't take very long to pay nothing!  

You can see that, as is typical for most large billing agencies, Medicare is generally the fastest, with 70% of accounts paid in 15-60 days, and less than 20% aging beyond 90 days.   All the commercial agencies underperform, with fewer accounts current, and many more accounts >90 days old -- these usually result from denials, requests for more documentation, subrogation claims, and pure orneriness.  Auto claims and Worker's Comp, unsurprisingly pay the slowest, involving as they usually do lots of third-party liability and often requiring investigation.

Bear in mind that the vast majority of the revenue will in fact come from the first 60 days; claims that go over 90 days are rarely in fact paid.  The private insurers count on this -- a claim delayed is a claim denied.  Also, we are non-aprticipating with many of the commercial payers, which also tends to slow things down, since the common practice is to send the check to the patient, who then (we hope) will forward it to us.

The utopian dream would be a payer that had the speed & efficiency of Medicare with the payment rates of the privates.  

Dream on...


  1. I think this graph would be easier to read if you used cumulative percentages, rather than raw percentages. (That is, plot the points "percentage up to 30 days late", "percentage up to 60 days late", "percentage up to 90 days late", and "all claims".)

  2. Posts like this are why I check you blog daily.

  3. Elizabeth -- good point. I should be able to coax that out of Excel. I'll see what I can do.



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