It's good to have choices. And if you're a provider staring at a list of accounts receivable that are creeping up on 120 days, those choices become meaningful. The way that's done is by utilizing the power of indexing to compare payment performance among insurance companies on a level playing field, which ranks payers according to selected criteria.
The same indexing concepts that quantify and rank payers can also be applied to the ranking of medical billing services. Since each medical or chiropractic billing service submits claims only to a defined subset of payers - those that insure the patients of the providers served by that billing service - the scope of an individual billing service index is limited by those claims. For example, if they only work with three payers, that's a different scope of index entirely than an index that works with 12 payers, because one bad apple in a field of three can skew the whole picture.
Scope isn't the only variable in understanding the meaning of indexing. The perspective of the chiropractic or medical billing service is also important to understand. Since each of the providers served by a chiropractic biller sees only a subset of the total patient population insured by a given payer, their perspective is limited by the number of patients seen by those providers. Data obtained from nineteen patients is more easily skewed by aberrations than a patient-base of three hundred.
These limitations of index scope and perspective drive the distinction between "ideal" and "partial" payer performance indices. An "ideal" medical billing performance index is computed from comprehensive statistics across all providers nationally, irrespective of the billing service that helped process the claims, while the "partial" payer's performance index is computed from statistics across all providers that are served by a specific billing service or individual provider. So, using the "ideal" index, a healthcare provider can see which payers are performing best across the board, and by using a "partial" index they can ascertain how that payer is doing with a specific billing service's claims.
In other words, the rule of thumb is to know your index to understand your payer. Obviously, index quality is directly proportional to scope and perspective: the wider the scope and the broader the perspective of the billing service associated with an index, the better the resulting data. While the "partial" performance index computed on the basis of a specific biller's observations only approximates the "ideal" index, it is the only realistic payer performance index available today. Most importantly for medical billing services, since they use different billing processes and technologies, such partial indices rank the same payers differently, and in fact, they may contain different payer members in the same month. In this sense, the partial chiropractic or medical billing index becomes a characteristic of the biller, instead of the payer, allowing the providers to select the best medical billing service available based on this data, and challenging billers across the nation to continuously improve their service quality.
How To Compute Your Medical Billing Index
At a first glance, navigating the landscape of statistical payer and billing service indices is about as simple as rewiring your phone system. But it's not as difficult as it seems - all you need is a calculator and the following procedure:
- Step 1: Compute the percentage of your receivables that have aged beyond 120 days for each individual payer (insurance company) to whom you submit claims.
- Step 2: Weight-average them across all your payers, which emphasizes those to whom you submit the most claims versus lesser-used insurers.
- Step 3: Compare your payer index results to the monthly Billing Precision Index, which is available online.
- Step 4: If your index is higher, then your office billing process might benefit from improvements.
