"Cash is king," a phrase that has become the maxim of many financial offices. In a clinic setting, ultimately the billing process is only as good as the cash flow that it generates, and no payroll has ever been paid out of money that is outstanding in accounts receivable.

Very little has ever been understood about what is considered to be ‘normal’ for billing and collections in occupational health. It is believed that the normal patterns found in healthcare, in general, cannot be applied to the occupational health setting, because the nature of the business and the payors are fundamentally different. But there has been no data to establish what is considered normal. For this reason, our most recent survey looked at the billing practices of such clinics.

The first part of the survey dealt with common billing practices and formats. Looking at the information systems that are used, a fairly equal distribution of responses was found. 29% of respondents indicated they use their hospital system for billing, 40% use occupational health specific software, and 31% other free-standing financial software. Most programs appear to utilize the same system of billing for both injury and non-injury services.

The majority of programs operate on a monthly billing cycle. For injury services, 50% generate invoices monthly, 17% bimonthly, 19% weekly and 15% daily. In terms of non-injury services, 64% produce invoices monthly and the remaining 36% is equally divided between the other three time intervals.

The vast majority of the respondents (71%) send original invoices to either the employer or the payor, depending upon the request of the employer. Only 14% send invoices to the payor in all cases. On the issue of attaching medical records to original invoices, the responses were split with 48% consistently attaching records and 52% submitting invoices without records.

The average annual revenue of the respondents was $1.4 million. One of the most common tools used to measure collections performance was the total outstanding accounts receivable (used by 28%) which averaged $804,000. An even more popular quality measure is the average number of days outstanding in accounts receivable, preferred by 32% of sites. While detailed experience was not shared by all participants, the average days in accounts receivable for those providing the information was 83.5 days. The range, however, was quite broad, with the lowest value reported at 33 days and the top side peaking at 149 days.

The other quality measure that seems to be popular is the total percentage of the accounts receivable that is at 90 days or older. 31% of those surveyed indicated this measure to be their primary indicator. However, very few of those using this indicator provided enough details to determine an average percentage. The range varied from a low of 15% to as high as 30%.

Other results of interest were the frequency of re-submitting unpaid invoices – 56% run on a 30-day cycle and 28% wait 60 days or longer before any repeat invoicing is done. The survey also attempted to look at the average number of staff used for billing and collections activity. The average staffing level was 2.0 FTEs, with the average number of monthly invoices being generated at 1,450 per month.

Beyond the raw data, some effort was made to determine if there is any correlation between billing practices and positive outcomes. The best available data came from sites that reported the average days in AR. Focusing on those responses, the data were examined to determine if there is any correlation between lower days in AR (positive outcome) and factors such as type of billing system used, inclusion of medical reports, size of staff, or frequency of re-billing.

Based on the responses, there was no significant correlation between collections performance and any single billing practice. However, there was a somewhat inferred correlation between those sites that included medical records with their invoices and those that reported their days in AR below the overall average. Staff size had no apparent impact – in fact, those sites reporting the largest staff often had less favorable outcomes. Likewise, the type of information system used had no significant correlation. Even billing frequency, which one might expect would bring the accounts receivable down, seemed to have no impact with those sites that billed weekly or more frequently.