Managed Care Underpayments Continue To Plague Providers. Take Advantage Of This Free Underpayment Penalty Calculator For Partially Paid Claims.
A managed care plan that pays only a portion of a claim timely, and the remainder of the claim (overdue amount) after the statutory claims payment period, must pay the preferred provider a penalty that is determined by how late the payment was made.
What is Partial Payment Rate
Partial Payment Rate (PPR) is a key metric in healthcare revenue cycle management that measures the percentage of patient accounts that have been partially paid by insurance companies or patients themselves.
PPR is an important metric because it provides insights into the effectiveness of a healthcare organization's billing and collections processes.
A high PPR may indicate that the organization is struggling to collect full payments from patients and insurance companies, which can negatively impact cash flow and revenue.
On the other hand, a low PPR may indicate that the organization is doing a good job of collecting full payments, which can improve financial performance. By tracking PPR over time, healthcare organizations can identify trends and make adjustments to their billing and collections processes as needed.
The Financial Impact of Underpaid Claims
The financial harm caused by underpaid claims to your practice (business) may be difficult to appreciate. Underpayments cost providers tens of thousands of dollars in lost revenue annually and additional costs for administration and pursuing claims are not included in that figure.
You should never ignore payment errors. Recurring underpayment results in revenue loss, while overpayment can cause recoupments.
Payment variance due to payer underpayment can have disastrous consequences for your bottom line. Underpayments also force you to spend resources and time spotting and fixing payment errors. Because it takes so much time to settle erroneous claims, many providers don't rework a significant percentage of claims. As a result, many claims remain underpaid.
Revenue Leakage of Underpayments
Many physicians underestimate the revenue leakage of underpayments and should be tracking them. These are parts of your practice where you should never cut corners. It is one of the most important areas to head off potential underpayments in your practice (business).
A physician group with 20 providers that brings in $14 million in annual net revenue could be missing out on $140,000 to $420,000 in the annual income they've earned. A group with 100 physicians earning $70 million per year gets shorted $700,000 to $2.1 million. That money could go to additional staff, a down payment on a new PET/CT scanner, or any number of practice improvements.?
FREE UNDERPAYMENT PENALTY CALCULATOR FOR PARTIALLY PAID CLAIMS
This Excel spreadsheet calculates the penalty amount, which is based on the underpayment amount, derived from a ratio of the balance owed divided by the total claim's contracted rate. This ratio is multiplied by the contractual, or discounted, amount (billed charges - contracted fee).
You do not need a Box account to access this resource. Here you go:
The Physician's Advocate in Payer Contracting
Achieving more favorable contracts requires resources, time, and industry knowledge your team may not have. If this is the case, schedule a free consultation with us and we’ll take care of it for you.
Starting with your top 5 payers, our team partners with you to analyze and communicate directly with payers to obtain better rates and competitive terms, while you focus on patient care.
Contact Us Today (512) 787-1852 or Schedule Your Free Consultation / Demo here.