What is Cost to Collect?

The multistep process of revenue cycle management often results in a high cost to collect for smaller practices. Cost to collect is an important key performance indicator (KPI) that healthcare organizations use to track the expenses involved in patient financial services. It encompasses all costs associated with patient billing, including employee wages, office facility overhead, and even the cost of paper for invoices. A lower cost to collect is often an indicator of a more efficient revenue cycle, which results in healthier margins and better financial performance.

A 2019 report by the Advisory Board indicates that for many health systems, the cost to collect can range from 1.5% to as high as 3.5% of net patient revenue. Finding ways to lower this percentage is an ongoing challenge, and this is where revenue cycle automation comes into play.

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Reduce Cost to Collect in the Revenue Cycle with Automation

Automating the revenue cycle by using technology to handle repetitive and time-consuming tasks can significantly cut down on labor costs and boost efficiency. Here are some effective starting points for automation in the billing process:

• Eligibility Verification: One of the main causes of denied claims is errors in patient eligibility verification. Automated systems such as pMD’s pDemographics service automatically verify patient demographics and coverage details using Artificial Intelligence (AI). Verified insurance eligibility drastically reduces the likelihood of denied claims and lowers the cost to collect.
• Claims Management: The process of manually checking claim submissions is prone to human error and one missing document or piece of information can result in a denial. An AI-powered software can automatically detect errors in claims, flagging them for review before submission. This reduces the instances of costly denials and claim rework, also contributing to a smaller cost to collect.
• Payment Posting: The manual process of posting payments to patient accounts is another time-consuming and error-prone task. Effective solutions such as pMD’s Billing & RCM services have automated processes to help collect patient balances, which frees up your staff to focus on other tasks that need human intervention.

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Automation in Healthcare Revenue Cycle Management

A survey commissioned by AKASA found that automating revenue cycle operations can reduce the cost to collect by as much as 20%. This is a significant saving for healthcare organizations operating on tight margins. Revenue cycle automation is not just about reducing costs. It also plays a crucial role in minimizing revenue leakage, improving patient satisfaction, and freeing up staff to focus on patient care.

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How pMD^® Can Help

At pMD^®, our mission is to streamline and optimize the patient care episode and the revenue cycle. Through our advanced, end-to-end practice management and revenue cycle solutions, we can help practices consolidate vendors, reduce costs, streamline workflows, improve patient care and satisfaction, and collect their maximum reimbursement more quickly.

Not sure what a vendor could do to improve your behavioral health billing? Contact pMD^® for a no-commitment financial impact analysis by our team of healthcare RCM experts free of charge!

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