Bill Sample / December 10, 2018 / Dionne Boone
If you dont include the responsibilities of each party in the contract how does it protect either of you when the relationship starts to fall apart? And if neither party knows their responsibilities how can you expect that the relationship will work? Here is an example. You specify in the contract that it is the obligation of the providers office representative to supply you with all the payment remittances but you are not getting them which is causing you to do a lot of extra work in contacting the insurance carriers to check status on claims that were already paid. It is upsetting to spend three or four hours calling insurance companies to find that the claims were paid but the doctors office missed sending you the eobs.
Days in Accounts Receivable (DAR) A growing number of days in accounts receivable are symptomatic of a faulty billing process. One way to determine DAR is to count days from the date of service to the date of payment for every claim and then average across all claims. A simpler way to compute average number of days in accounts receivable by taking a ratio of accounts receivable to average daily charges or Number of days in accounts receivable = (Accounts Receivable / Average Charge) x 365 This metric too depends on medical specialty patient demographics payer mix and CPT sample. Another downside is that this metric is sensitive to provider as it counts the lag time of unsubmitted claims for services already delivered.
When we started our Medical Billing Service in 1994 there was very little information available on medical billing services let alone medical billing service contracts. In fact some of the information indicated that you really didnt even need a contract if you didnt want one. That couldnt be further from the truth! Having a contract for your Medical Billing Service is very important to protect both you and the provider. Many new billing services ask us for a sample contract or a copy of our contract. Using a sample contract or somebody elses contract is not a good idea. It would be like taking somebody elses will whiting out their name and writing in yours. The only time it will hurt you is when you die and then your family could be in trouble.