How We Reduced Payment Velocity From 74 Days to 35 Days 

Healthcare providers must not only provide high-quality care, but they also need to get paid for their services promptly. A successful health business will not have cash-flow troubles if it does not experience slow payments from insurance companies. There are many reasons why claims can be processed slowly, including errors in coding, delays in claims submission, issues with eligibility of the patient, or slow follow-ups from accounts receivable (AR) department. At Total Medx, we are proud to inform that we helped accelerate the payment process in the recent case from 74 days to 35 days. There were not only change in paid process. The improvement also involved collection of information on payment bottlenecks, claims optimization, denial management improvement, and development of a better AR follow-up strategy. 

Let us explain how we worked on the project. 

What is payment velocity in medical billing? 

Payment velocity means the speed with which payments are received after the services have been provided and claims filed. The slower claims process is, the more funds get stuck in accounts receivables. For instance, companies that take 74 days to receive payments have much more money frozen in unpaid claims than the companies with Ensuring fast payment can enable the healthcare providers to:

– Improve cash flow 

– Decrease the pending accounts receivable 

– Improve revenue forecasting 

– Reduce claim delays 

– Decrease workload connected to administration 

– Spot billing issues at an early stage 

For medical institutions, fast payments don’t only mean a high number of claims submitted, but also clean and precise claims submitted timely. 

 

The Problem: 74-Day Payment Cycle 

Upon analyzing the practice’s revenue cycle we have noticed the 74-day payment cycle requiring attention. 

The practice was making a lot of services, nevertheless, revenue was not going through the billing cycle. 

There were some factors preventing quick payments. 

– Claims submitted incorrectly 

– Delay in claim submission 

– Problems with insurance and eligibility verification 

– Poor accounts receivable follow-up 

– Rejected and denied claims that weren’t processed 

– Aged accounts without attention 

– Absence of proper prioritization for accounts receivables 

Each of the issues we have listed might seem a manageable problem, but together they can form a serious problem in the way of gaining revenue.  

 

Stage 1: Finding the Bottlenecks in the Revenue Cycle 

The first thing we have done was analyzing the movement of billing processes from patient registration to payment. We didn’t analyze such claims in anThis made it possible for us to realize why revenue was stuck in a bottleneck in terms of timely payments.

We investigated the following items that contributed to delays:

– Claim submission timelines

– Rejection patterns

– Denial trends

– Payer-specific issues

– AR aging

– Issues related to coding and documentation

– Eligibility checks

– Payment posting process

The aim was straightforward: to identify the real causes of delays rather than merely tackling symptoms of the issue.

 

Phase 2: Working on Clean Claim Submission

One of the biggest possibilities was to prevent avoidable claim issues on the submission phase itself.Claim submission issues that stem from faulty patient details, missing information, wrong coding and data, as well as eligibility hurdles, result in claim rejections and denials. Every time a change is made, the payment is delayed.

We developed the pre-submission process by focusing on:

– Patient data accuracy

– Insurance verification

– Eligibility checks

– CPT and ICD-10 coding accuracy

– Modifier application

– Necessary data for a claim submission

– Claim filing reprimanded by the payer

 

By eliminating potential issues ahead of time, the company is allowed to submit claims for payment more efficiently.

Step 3: Applying a Proactive Mindset to Denial Management

If denials are not addressed timely, they would seriously impede the payment speed.

Instead of letting denied claims languish in accounts receivable, we have prioritized them based on age, claim value, payer, or denial reason.The denial pattern of the claims was reviewed to assess the denials as problems of one instance or recurring process issues. For example, repeated denials likely linked to the same payer or coding trap signal a workflow problem that requires correction.

By doing that, the office was able to go from reactive denial management to a proactive revenue-cycle approach.

Step 4: Intensifying AR Follow-Up

Accounts receivable management was another key area of our focus.Not all of the open claims equally require attention. Older and more valuable claims present a bigger revenue opportunity than newly filed claims.

We implemented a structured accounts receivable follow-up process to focus on:

Claims with high balances

A/R balances that are older

Request denials from the payers

Denied claims

Claims that require more evidence

Accounts close to timely filing or appeal deadlines

By doing so, we ensured that the outstanding claims continued to be followed up The Outcome: 74 Days Cut to 35 Days

By employing the techniques of cleaner submission of claims, active denial management, well-organized AR follow-up and continuous performance review, we brought the practice’s payment speed down from 74 days to 35 days.

This is a decrease by 39 days, which means that the revenue goes through the process much faster.

The main idea is that the improvement of payment speed would not normally mean the complete restructuring of the billing operation of the practice. Normally, the main changes will happen when the process inefficiencies are spotted and the proper bottlenecks are addressed.

All This for Your Practice

If your practice keeps waiting for the insurance payment for weeks or even months, the issue may be much deeper than slow insurance companies.Indeed, the revenue cycle can be affected by such issues as avoidable mistakes in claims, late submissions, unresolved denials, problems with eligibility or improper AR follow-ups.

Knowing this facts and going through thorough analysis of the medical billing (and the accounts receivable) for the particular practice will help understand where the delays in revenue occur and which improvements can give great results.

FAQs

1. What causes slow payment velocity in medical billing?

Slow payment velocity can result from claim submission delays, coding errors, eligibility problems, rejected or denied claims, missing documentation, payer processing delays, and ineffective AR follow-up. Identifying the specific bottlenecks is essential for improving payment turnaround.

2. How can a medical billing company improve payment velocity?

A medical billing company can improve payment velocity by submitting cleaner claims, verifying patient eligibility, managing denials quickly, prioritizing high-value AR, following up consistently with payers, and monitoring key revenue-cycle metrics. The objective is to reduce avoidable delays throughout the billing process.