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Strategies for Reducing the Cost of Medical Group Billing

The admin costs for running a medical practice today are higher than ever and it is vital that every practice reduce expenses in a thoughtful way that doesn't create a negative impact on revenue. With the right plan in place any practice can make significant improvements in operating efficiency.

How much is the overhead for a medical practice? That depends.

MGMA research shows that overhead expenses typically take up 60% of practice revenue. That is a staggering amount. This expense is spread out across cost centers within the practice and many of them are fixed or very difficult to reduce, i.e. office space, medical equipment, staffing etc.

How much does it cost to collect Revenue?


Every cost center in the practice must review its own particular operation and make sensible changes when possible. The billing office is in a unique position to effect both revenue and expenses. An office with a top-notch team as well as cutting-edge technology can both increase revenue and cut expenses simultaneously.

In order to achieve this a practice must invest in 2 critical things, a motivated billing team and best-in-class RCM technology. The right system can help achieve both goals, increase revenue and reduce expense. The right system will provide your team with the time-sensitive information it needs to shorten the revenue cycle and do this with a level of efficiency that allows for a smaller staff.

So what are the numbers?

Nationally, the industry standard Target Billing and Insurance Related (BIR) expenses is 6% - 6.5%. But this number is too high. A motivated staff with TKSoftware's technology can push BIR down as low as 4.5% which is a 30% difference.

Our clients have made this happen by focusing on the three fundamentals: The Tech, The Team, and The Timing.

The Technology must be easy to use, present relevant data in a format that can be consumed and acted upon quickly while providing intuitive analysis of trends to allow for instant decision making. This includes expert customer support.

The Team must be knowledgeable and motivated. A small team with these characteristics is much more effective than a large team without.

The Timing formula is simple and includes filing claims asap after the encounter as well as correcting and refiling rejections asap. These are just the basics, but mastering these is critical. Once the basics are mastered, the practice must utilize more advanced RCM tools like denial management and deductible verification that can increase revenue even more. Increasing revenue has a positive impact on the entire practice by reducing relative operation expenses across the board.

In the final analysis, putting the right tools in the right hands is the key to reducing BIR expenses.

Matthew Behringer
Managing Partner