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Factors Contributing to Revenue Loss

Hospitals in the U.S. leave approximately $125 BILLION “on the table” each year due to poor billing practices. Correct claim submission is the economic life blood of any facility. It’s highly technical, requiring extensive specialized training and experience.

The Two Most Common Factors Contributing to Revenue Loss:

  1. Billing Errors Industry estimates indicate that up to 80% of medical bills contain errors. Insurance companies are very exacting on correct billing and coding practices; even the smallest mistake will cause insurers to reject a claim.

  2. Failure to keep current with Rules and Regulations These rules are constantly changing, requiring hospital administrators to spend time and money on continuing education, software, and staff training to stay current. This has a direct effect on cash flow and profits.

Possible Adverse Indicators:

  1. Collections Falling - a Net Collection Rate of less than 90%1.

  2. Dollars in A/R Increasing - should not exceed 17% of Net Revenues

  3. Time to Collect Increasing - Days in A/R over 55

  4. Denied Claims Increasing - should not exceed 4% of gross income

  5. Analytic Reporting Deficiencies – A limited overview of how your financials are functioning may cause you to overlook obvious economic warning indicators.

  6. Office Staff Turnover – Especially damaging in the billing department. Staff changes inevitably lead to a slowdown in claims submissions, increased errors and decreased A/R productivity.

  7. Technical Skill Deficiency – In-house billing requires substantial financial and training investment to achieve optimal systems performance.

  8. Overwhelmed…Falling Behind – Due to new software, new staff members, a staff member’s extended absence or an unanticipated increase in patient admissions, additional temporary help may be needed.

Advantages Obtained by Outsourcing

  1. Experienced billing & coding professionals work with you

  2. Billing compliance

  3. Enhanced reimbursement

  4. Cash flow improvement

  5. Better financial perspective

  6. Assistance navigating a constantly changing industry

  7. Stress reduction with increased CASH flow & collected debt


For more information, contact Medical Recovery Services

(816) 229-4887

Medical Recovery Services is a full-service revenue cycle company assisting

hospitals and surgical centers in achieving their full earning potential since 2004.

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