Insurance Payer Mix

Often practices rarely analyze just what kind of insurance reimbursement they are receiving for their patient’s services. Experience has shown us that as long of the revenue number is acceptable to the physician, little effort is made to understand just what kind of "insurance mix" the practice has.

Clearly if the practice is suddenly is skewed to Medicare and Medicaid the physician will see the revenue line drop off, with the number of patient’s continuing to be stable or increase. In simple terms this results in the physicians as well as the staff working harder for less reimbursement. Neither one of the government plans were intended to provide the practice with the majority of its revenue, although in some cases, it is becoming the norm.

Your geographic area is a major factor in developing a balanced payer mix. Practices serving are area comprised of one or two major insurance carriers have little choice in developing a balance insurance mix. However, in general limited payer participation is the exception.

Our target would be to have no more than 15% to 18% in any one category, however we recognize that this may not be possible for all practices. What this exercise does is allow you to better understand your source of revenues, and select new payers with an analytical approach.

Also, don’t forget to factor in patient co-payments (which have increased in the past few years) when deciding to accept a new or additional payer.