As an exercise to test your Anesthesia Billing IQ – Let’s walk with Anesthesiologist Bob as he decides which company to use for his billing.
Anesthesiologist Bob expects $1,000 for a case he performed.
Billing Company A charges 3%. Billing Company B charges 5%.
Which billing company should Anesthesiologist Bob select?
Which option would you select?
If you chose Anesthesia Billing Company A, then you are not alone. Many anesthesiologist providers select their billing company by primarily looking at the cost percentage.
“What will this cost me” is a common question, and a very important question for businesses.
However, there is actually much more to the equation than simply the percentage charged. Don’t fall into the lower Anesthesia Billing IQ Category by not looking at the entire picture. To make an educated decision, let’s look at the full equation.
Billing company A, who charges 3%, collects 80% of the contracted amounts.
The 80% collection equals $800, and after Billing Company A’s 3% charge, Bob’s take home pay would be $776.
However, Billing Company B, who charges 5%, collects 97% of the contracted amount. The 97% collection equals $970, and after Billing Company B’s 5% charge, Bob’s take home pay with this billing company would be $921.50.
Now that you have the collection rate and take home pay amount, which billing company should Anesthesiologist Bob select?
Once you see the entire equation, the obvious choice is Billing Company B – while their percentage charged is higher, their collection rate gives Bob a significantly higher revenue. Those with the highest Anesthesia Billing IQ will choose Anesthesia Billing Company B.
Now the question “What will this cost me” seems a little different. While at first glance, Billing Company A “costs” 3% and Billing Company B “costs” 5%, in actuality, the cost associated with Billing Company A is $146.50, which is what they are losing in revenue by not selecting the company with the maximum collection rate.
Here are some helpful tips when interviewing anesthesia billing companies:
- You don’t want the cheapest billing company; you want the best company…The best company will not be the cheapest company. But, the best billing company will give you the highest collection rate, increasing your take home revenue. The cheapest option will cost you money in the end.
- If your main concern when selecting an anesthesia billing company is “What percentage do you charge?,” – you are missing the big picture. Your questions should be about collection rate percentage and total revenue increase.
- The easiest way to increase your take home revenue without doing any more work is by partnering with an anesthesia specific billing company whose goal is to increase your total revenue, by fighting to collect every penny that you work for.
If you would like help increasing your anesthesia revenue, contact Fusion Anesthesia. The team at Fusion Anesthesia can look at the past 6 months of your billing, and show you exactly where and how they can increase your revenue.