Revenue Cycle Management: Charge Lag (Part 3)

As we continue our series on medical revenue cycle management, we want to highlight the importance of understanding your charge lag. This is especially important as the new ICD-10 coding has come into play. As a company who offers electronic medical billing services, we often see charge lag being overlooked. If you are experiencing a dip in your revenue, it may be due to your charge lag.

Do you monitor the time it takes to drop a bill? It’s time to start. Let’s talk about how charge lag works, and how awareness could help you optimize your revenue cycle management.

Why Monitor Charge Lag

Charge lag is a major component to consider when looking at your revenue cycle process. The longer it takes your office staff to drop a bill, the longer it takes your practice to get paid. Many providers look past this because they see any lag of time as short and insignificant. Two to three days of lag time doesn’t sound that bad.

Unfortunately, two to three days of lag time can be pretty damaging.  Here’s an example of how a short lag in time can affect your overall revenue cycle:  Imagine your account receivable cycle is running around 30 days on average.  If it takes 3 days from the patient’s encounter to transcribe the bill and then drop it, you could be artificially inflating your accounts receivable cycle by 10%. This inflation is caused solely by an inefficient charging process that is creating a charge lag. 10% is an awfully big inflation when dealing with large amounts of money. Thus, studying your charge lag is significantly important.

How Does Charge Lag Occur?

There are many items that go into charge lag, and the one MEREM Health experiences most often is the failure to adapt to new technology. Practices that haven’t converted to electronic health records, and still dictate and transcribe their encounter notes with paper and pen have a greater charge lag than those who have converted. It typically takes 24-48 hours for practices who handwrite health records to get their dictation back. This adds that extra 2-3 days between patient encounter and charge submissions that electronic medical billing services can prevent.

The implementation of ICD-10 has also played a role in increasing charge lag. As practices are having to relearn most, if not all, of their former popular codes, charge lag inevitably increases. Because many physicians have accepted this transition as a learning process, they have allowed a cushion on billing times. This cushion will cause charge lag. Because practices frequently overlook the importance of charge lag, the may not be expecting a significant change to their revenue cycle. Unfortunately, any extension in charge lag time produces substantial results.

Why Using Electronic Medical Billing Services Works

By hiring a company who offers electronic medical billing services, you can significantly decrease your charge lag time. Because things are done electronically, rather than manually, coding and transcribing becomes effortless.

Outsourcing your medical revenue cycle to coding professionals who understand electronic health records and ICD-10 thoroughly will not only significantly reduce your charge lag time; your practice may also gain additional hidden revenue cycle funds in the process.

Stop wasting time doing medical revenue cycle management inefficiently. Outsource your billing. Interested in learning more? Contact MEREM Healthcare Solutions today.