Medical Groups Struggling To Collect Payments Promptly

Posted on August 18, 2017 I Written By

Anne Zieger is veteran healthcare consultant and analyst with 20 years of industry experience. Zieger formerly served as editor-in-chief of FierceHealthcare.com and her commentaries have appeared in dozens of international business publications, including Forbes, Business Week and Information Week. She has also contributed content to hundreds of healthcare and health IT organizations, including several Fortune 500 companies. Contact her at @ziegerhealth on Twitter or visit her site at Zieger Healthcare.

Particularly as patients assume responsibility for more of the costs of care, it’s getting harder for providers to collect on outstanding bills.

My recent look at a dashboard created by the Medical Group Management Association certainly underscores the point. The story it tells is a grim one. Despite their best efforts, few practices are succeeding at meeting RCM challenges.

The MGMA intends the dashboard, which focuses on the number of days bills spend in Accounts Receivable, to give medical groups some benchmark RCM data. It relies on data from the group’s 2016 DataDive Cost and Revenue study, and allows users to view (at no cost):

  • Mean percentages of accounts receivable aged 0-30 days, 31-60 days, 61-90 days, 91-120 days and over 120 days
  • Mean days gross fee-for-service charges in A/R
  • Meeting days adjusted fee-for-service charges in A/R

It also allows users to select a specialty group type, including primary care, nonsurgical, surgical and multispecialty practices and look at their specific profile.

For example, the dashboard reveals that roughly 50% of accounts held by primary care practices spent a mean of 0-30 days in A/R, 11.2% of accounts were aged 31-60 days, 6.9% were at 61-90 days, 6.2% stayed in A/R for 91-120 days and 25.4% for 120+ days in A/R.

The MGMA page also stated that primary-care groups had an overall average of 61.86 adjusted days in A/R and 35.60 gross days in A/R.

Does that sound depressing? Well, it should. What’s more, other specialties’ performance was nearly as bad in some categories and even worse in others.

Look at the performance of nonsurgical groups. Only 44.7% of nonsurgical groups’ revenue came in within 30 days in A/R or less, almost 13% of accounts averaged 31-60 days before being paid, and almost 15% of accounts spent between 61 and 120 days in A/R. Twenty-eight percent of accounts had a mean 120+ days in A/R before being satisfied.

The other stats were even worse. For example, nonsurgical groups’ accounts spent a mean of 88 days in A/R and 46.2 gross days in A/R. Not very encouraging.

Even well-paid surgeons weren’t exempt from this problem. Most of the account aging stats were distributed similarly to the other specialty areas, and only 28.2% of accounts in this area spent more than 120 days in A/R. However, adjusted days in A/R came in at 136.7 and gross days in A/R at 54.

Meanwhile, the tally for multispecialty groups was a bit better, but not much. Account aging benchmarks were very similar to primary care practices, and adjusted days in A/R came in at 69.4.

Most of you probably had an idea that medical groups were facing these kind of collection problems, even if you didn’t have these benchmark numbers in hand. The thing is, they were even worse than I feared. (An acquaintance working in medical billing called the results “comical.”)

I don’t know what percentage of the accounts in question were self-pay, but given that self-pay is becoming a steadily higher proportion of medical practice revenue, these stats are pretty bad news. Something’s gotta give eventually. Plus, we’ll have to keep tracking how this data trends over time.