What this graph illustrates: Over the past twenty years, the healthcare revenue cycle has experienced a surge in the use of technology to improve overall financial results. Electronic claims submission, electronic remittance advice (ERA) and electronic eligibility verification have all resulted in a quicker adjudication processes at the major insurance carriers (Medicare, Aetna, United, Oxford, etc.). The graph below segments Aetna’s payment lag times (calculated from the date of claim submission to receipt of 835/ERA) into five day periods. As illustrated below, the majority (36.93%) of Aetna’s claims are paid within 11 to 15 days of claim submission.
What this means to you: Maintaining consistent cash flow is one of the most important objectives of a billing staff for a multitude of reasons, including physician and staff compensation. Understanding payment lag times for each of your major insurance payers will enable you to accurately predict/model short term cash flow as well as quickly identify when one of your insurance carriers decides to deviate from the norm. In this Aetna example, you can see that claims that are “going to be paid” are paid quickly. If you have not received reimbursement within 30 days of billing an Aetna claim (or a corresponding denial), you may want to have your billing staff review the claim for accuracy/correctness.
(Click on graph to enlarge image)