Secondary Claim Collection Rate is a key metric in healthcare revenue cycle management that measures the effectiveness of a healthcare organization's efforts to collect outstanding balances on secondary insurance claims. This metric is calculated by dividing the total amount collected on secondary claims by the total amount billed for those claims. Secondary insurance claims are submitted after the primary insurance has paid its portion of the claim. The secondary claim collection rate is an important metric because it helps healthcare organizations understand how successful they are at collecting the remaining balance from secondary insurance providers. A high secondary claim collection rate indicates that the organization is effectively managing its revenue cycle and maximizing its reimbursement potential. To improve the secondary claim collection rate, healthcare organizations can implement strategies such as timely and accurate claim submission, effective follow-up on outstanding claims, and clear communication with patients and insurance providers. By monitoring and improving this metric, healthcare organizations can optimize their revenue cycle and ensure financial stability.
Secondary Claim Collection Rate is calculated by dividing the total amount collected from secondary insurance claims by the total amount billed to secondary insurance carriers, and then multiplying the result by 100 to express it as a percentage.
The formula for calculating Secondary Claim Collection Rate is:
Secondary Claim Collection Rate = (Total Amount Collected from Secondary Insurance Claims / Total Amount Billed to Secondary Insurance Carriers) x 100
For instance, if a healthcare organization billed $100,000 to secondary insurance carriers and collected $80,000 from them, the Secondary Claim Collection Rate would be:
Secondary Claim Collection Rate = ($80,000 / $100,000) x 100 = 80%
This means that the healthcare organization was able to collect 80% of the total amount billed to secondary insurance carriers. A high Secondary Claim Collection Rate indicates that the organization has an effective process for collecting payments from secondary insurance carriers, which can improve its revenue cycle management performance.
Best practices to improve Secondary Claim Collection Rate are:
1. Timely submission of secondary claims: It is essential to submit secondary claims within the stipulated time frame to avoid claim denials. The quicker the submission, the higher the chances of receiving payment.
2. Accurate claim submission: Ensure that the secondary claim is accurate and complete, with all the necessary information, including the primary payer's explanation of benefits (EOB). This will help avoid claim denials and reduce the time taken to receive payment.
3. Follow-up on denied claims: It is crucial to follow up on denied claims promptly. Identify the reason for the denial and take corrective action to resubmit the claim. This will help reduce the time taken to receive payment and improve the secondary claim collection rate.
4. Implement a denial management process: Establish a denial management process to track and manage denied claims. This process should include identifying the root cause of the denial, taking corrective action, and monitoring the progress of the claim.
5. Monitor and analyze secondary claim performance: Regularly monitor and analyze secondary claim performance to identify trends and areas for improvement. This will help identify any issues that may be impacting the secondary claim collection rate and take corrective action.
6. Train staff on secondary claim submission: Ensure that staff responsible for submitting secondary claims are adequately trained and understand the process. This will help reduce errors and improve the accuracy of secondary claim submissions.
7. Utilize technology: Implement technology solutions such as revenue cycle management software to automate the secondary claim submission process. This will help reduce errors, improve accuracy, and speed up the payment process.
By implementing these best practices, healthcare organizations can improve their secondary claim collection rate, reduce claim denials, and increase revenue.
The industry standard benchmark for Secondary Claim Collection Rate is typically around 95%. This benchmark is important because it indicates the effectiveness of a healthcare organization's revenue cycle management process. A high Secondary Claim Collection Rate suggests that the organization is effectively managing its claims and maximizing its revenue. On the other hand, a low Secondary Claim Collection Rate may indicate issues with claims processing or follow-up, which can lead to lost revenue.
Revenue cycle software can greatly improve the Secondary Claim Collection Rate metric by streamlining the claims process and reducing the number of denied claims. With the help of advanced analytics and automation tools, revenue cycle software can identify and address the root causes of claim denials, such as coding errors, missing information, and eligibility issues. This not only improves the accuracy and completeness of claims, but also speeds up the reimbursement process, resulting in a higher Secondary Claim Collection Rate.
If you're looking to improve your healthcare organization's Secondary Claim Collection Rate, consider booking a demo with MD Clarity's revenue cycle software. Our platform is designed to optimize the revenue cycle process, from patient registration to claim submission and payment posting. With our advanced analytics and automation tools, you can identify and address claim denials quickly and efficiently, resulting in a higher Secondary Claim Collection Rate and improved financial performance. Book a demo today to see firsthand how MD Clarity can help your organization achieve its revenue cycle goals.