It doesn't take any special math skills to send out medical bills. However, for reporting, calculations of how much money is and should be coming in and other things related to medical billing, good math skills or an understanding of calculate information is imperative in a medical billing career.
Cash and Allowances
The most obvious way math is an important skill in medical billing relates to adding up how much cash has come in and calculating allowances.
Cash is the easiest one to understand. A check comes in, one writes down how much it's for, and on a daily, monthly, and yearly basis, totals are calculated.
When it comes to allowances and adjustments, the math skills need to be ramped up a little bit. With some insurance companies, there's a fee schedule which tells exactly how much they're going to pay for specific procedures. With others, there's a percentage calculation for how much they'll pay based on either your gross billed amount. With Medicare, it's based on a percentage of fee schedule and percentages based off cost reporting.
Upfront Billing Allowances
Some billing companies or departments like to send out claims showing how much they expect to be paid for provided services. This isn't always easy to do. If you're billing an insurance company and all you have to do is bring down the amount for each service to what the insurance company says it's going to pay, that's easy. It gets complicated if you have to do different calculations for multiple services within the same group for a particular insurance.
For instance, in some states, three or more radiology procedures being billed to Compensation would be paid differently. They might pay 100 percent for the first procedure, 75 percent for the second and 50 percent for every subsequent procedure. If your state requires you to bill this out for what you expect to be paid, you need to know do the calculations for the correct amounts of each service.
Days in AR
You'll need an understanding of math to know calculate days in accounts receivables (AR). This figure tells you the average of how many days it takes to collect what you're owed. It takes into account billed accounts, non-billed accounts, gross receivables or net receivables, and the dollars and aging of each insurance. Some software will give you some of these answers, but not all of them.
Outstanding Accounts Receivables
Knowing interpret outstanding accounts receivables requires a good mathematical understanding of calculations. The first thing that you'll need to know is interpret outstanding receivables based on different time criteria. Then you'll need to figure it out based on group aging. Then you'll need to know figure it out based on the different insurances, and how they pay. And finally, you'll need to know do different averages and estimations of revenue, such as why new receivables may be higher or lower at certain times of the year, and how it impacts your receivables. Without understanding do the math, one can get false information from general data.
Balancing Out Work
One last reason for understanding math is figuring out disperse work, whether a person works by themselves or with others. A novice might think you could split the alphabet by the number of people you have and that would bring about a fair amount of work for each, but medical billing doesn't work like that.
For instance, people whose last names begin with B, J, M, S and W will often have more claims than many of the other letters, but it's not always like that. Between insurances, it's possible that those letters will skew in much different ways. Also, one might have to figure out that a person billing paper claims will take longer than a person billing everything electronic, so the division of the workload might not look fair, yet may be fair.
And finally, the dollars associated with each insurance type might not work out to being the same either. If a medical billing entity is billing Medicaid claims out at net balances, it might give a false impression of how much work there is to do. That's because Medicaid pays the least of every insurance company. Inpatient claims, which are the highest dollar amounts of all medical claims, might actually be the result of only a few claims that the billing department is having trouble getting paid.
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