What is a good return rate?

[FredG]

I recently met with a third-party billing company that claims over 80% financial return rate with their current clients, with some as high as 87%. My research pegs the average at closer to 58%.

I am wondering what is considered a good collection rate for a rural area.

Yes, this company did provide some references, but the 80+% rate just seems too high compared to the averages I have read about and experienced in the past with other departments. It just doesn't "feel right". I will be contacting some of their references and talking to other 3rd party billers.

As a backgrounder, my department is volunteer and rural with about 400 calls (240 or so transports) and a part of the local VFD. State law does not allow our type of department to bill, but we are looking at options to possibly split off from the FD down the road and billing/revenue is a piece of the puzzle. My department is trying to get all of our ducks in a row before we pursue any specific course of action.

TIA

[island emt]

Revenue recovery averages around 60% for the majority. It depends if you are hard or soft billing. Are you chasing the pt's for cost not covered by insurance? Are you chasing uninsured pt's for payment? Do you take people to collections and force the percentages higher?

[fireflymedic]

In my general area rate of return averages around 60 percent - some better some worse. Granted the vast majority of people in this area that require 911 transport are not insured making things quite difficult. Those that are, it's medicare/medicaid which though most of us don't like it, is what pays our paychecks. There are two services I know with excellent return rates one last year had 82 percent, the other 78 percent - but are in technically rural areas by definition, but good sized towns with a high tax base and multiple employment opportunities that are steady with benefits compared to the majority of true rural areas like immediately surrounding me which have extremely poor residents, many on welfare, no health insurance, no job opportunities and things not getting better - only getting much worse by the day. I think that is largely dependent upon what your success rate in return payment is. Obviously the smaller your department, the higher your rate of return needs to be to keep going - the smaller the more than one unpaid bill is going to hurt. Collections sometimes increases return, but as many have said and is so true, you can't get blood from a turnip. Best benefit is to work with them on a payment plan or reduced pay for full payment. I know where I work operates within this so perhaps this may help you? Best of luck to you.

[crotchitymedic1986]

Most of the ones that are claiming the 80-90% are not counting your mandatory write-offs for taking assignment. They can collect 80-90% of what is billable, which is anywhere from 40-60% of your total AR, depending upon your demographics and whether you are transport or 911. Anyone that claims they can collect 80-90% of all of your billed calls is lying or fraudualant

[FredG]

Thanks guys!

When I worked their calculations backwards (they never actually put it on paper, but did discuss transports, mileage, and potential billing rates), their estimated yearly revenue based on our transport volume works out to about 80% of the potential billed calls. Looking further into this, it also appears they are basing potential revenue on an average call having 20-25 loaded miles at $15 per loaded mile. The problem with that is the nearest community hospital is just under 9 miles from the centerpoint of the coverage area. The nearest hospital in county is closer to 20 miles, but 90+% go to the closer one.

They claim they rarely go to collections, usually only when they know the insurance company paid the patient and the patient did not send in payment.

CrotchityMedic1986, you mentioned mandatory write-offs. Can you explain further?

The last time I worked for a service that billed was about 7 years ago, so I know I'm out of the loop, but I want to make sure I understand what transports may be written off.

Also, this is a 911 service with the very rare interfacility when a commercial service can't come down out of the city(maybe 3-4 a year).

[island emt]

Mandatory write offs or adjustments are caused when dealing with Medicare , or state care programs and some of the bigger HMO 's that only reimburse a set amount no matter what you bill for services.

In other words if you bill $400 for a bls call + mileage they only pay $310 so you have to either write off the $90 difference or chase the pt to make it good. Part of the cost of doing 911 service. This is one of the reasons you see extremely high base rates in some areas.

[FredG]

Thanks! I kinda figured it had to do with the govt payout on calls, but your explanation was great.