Two women sitting and talking

How to Start an ABA Therapy Practice & Clinic: A Step-By-Step Guide

Due to the staggering impact of Covid-19, in 2020, the global autism spectrum disorder therapeutics has reached a whopping 3.6 billion US dollars. If you have dedicated your life and your career to providing your community with specialized ABA (Applied Behavioral Analysis) therapy services, you might consider taking your commitment to the next level. 

As a board-certified behavioral analyst (BCBA), you’ve had the chance to supervise behavior analysis and mentor ABA therapy providers. However, by starting your own ABA clinic, your expertise and experience can become irreplaceable assets for your community, especially in this moment of unprecedented need. 

If you are unsure where to start in your pursuit of launching your own ABA therapy clinic, check out this step-by-step guide by Rethink

Benefits and Potential of Starting an ABA Clinic: Understanding the Market

If you are launching an ABA practice to serve your community, you might be doing so with a humanitarian, compassionate mindset. Nonetheless, it is essential to keep in mind that you are, in fact, running a business. It’s not strictly going to be using the ABA therapy skills that you’ve developed.

For how enriching this venture is, there are some new skills you have to learn when running a company. Let’s start with one of the most important ones: understanding the market.

Starting an ABA clinic represents a significant financial investment. At this time, the market is in the midst of a full global boom, which has both positive and negative ramifications.

In particular, ABA therapy providers represent the fastest-growing segment within the “communication & behavioral therapies” category within the autism spectrum disorder therapeutic sector.

While there is certainly not a lack of business opportunities, the competition for new ABA clinics is fiercer than ever. The main competitors you will have to deal with include:

  • Other local and multi-state clinics and practices
  • Franchises
  • Private equity-owned and large corporations

Nonetheless, local practices are the pillars of community wellbeing and sector growth. Join this thriving industry with the tips below. 

Taking Care of Your ABA Therapy Business’s Administrative Side

While the goal of a local ABA practice is to provide a service to the community, some thornier aspects of owning a business cannot be overlooked. The administrative side of things might not be the most exciting aspect for you, but that’s where the help of a trusted accountant and attorney come into play!

Develop a Business Plan

Whether you are looking to start a small, local business, or you are looking to build out a franchise, you will need funding. There are several pathways you might consider, including:

  • Self-funding
  • Investors, angel investors or family members
  • Loans through specialized lenders or banks
  • Grants - such as the ones offered by SAMHSA or HRSA
  • SBA Line of Credit 
  • Local government and private company grants

No matter what type of funding you are hoping to get, you will need to craft a business plan for your ABA therapy practice. Your business plan should include your value proposition, mission, vision, financial forecast, target market insights, competitor analysis, and details about your unique selling points. 

There are two main reasons why you should not skip this step:

  • A business plan defines a clear roadmap for your business and helps you keep track of your goals, achievements, and efforts
  • A business plan is needed by investors to verify your credibility and understand what is worth investing in your ABA business. After all, a return on investment is their number one concern. 

Choosing Your Business Model and Registering Your ABA Business

The business model and type of business for your private ABA clinic should be chosen wisely. Some of the most popular options include:

  • Sole proprietor - a sole proprietor or sole trades is the only owner of an unincorporated company. A sole proprietor only pays personal income taxes, and can keep the rest of the profits. It also comes with unlimited liability, which can cause you to struggle to get capital funding. 
  • Partnership - partnership, limited partnership, and a limited liability partnership are business types used to get into business with a co-owner. After paying taxes, profits, losses, and liability are shared among the partners. 
  • Limited liability company (LLC) - LLCs are legal entities regulated by the state or country they are in. They can be treated as a sole proprietorship, partnership, or corporation, depending on the number of owners. While there is plenty of paperwork linked to starting an LLC, this business structure can help you protect yourself and your company from significant losses. 

Generally, the best option is to register your private ABA clinic as an LLC. Setting up a sole proprietorship or partnership might seem easier, but it might not offer you the legal protection to operate with peace of mind. In any case, since each practice is unique, consulting a specialized lawyer or accountant can help you understand the pros and cons of each. 

Once you have decided on your business entity, you can register it with the IRS here

Policies, Legal Contracts, and Compliance

Policies and legal contracts are what determine the relationship between the ABA provider and its clients, and they are the backbone of a business - especially for ABA companies. These include:

  • Billing and fees - some payment models include fee-per-service and predetermined per-person payments. Your contract will also outline billing schedules, cancellation fees, and payment types
  • Confidentiality, nondisclosure, and privacy policy - privacy policies and terms and conditions of service are essential aspects to consider, especially because your ABA therapy clinic and providers will handle sensitive data such as a patient’s medical history and conditions. 
  • Liability release - when operating as an ABA therapy provider, your business entity will carry a liability. If you have registered your clinic as an LLC, you might only be subjected to limited liability, but legal contracts can help you keep losses at bay.

In terms of compliance, before opening a business you will need to:

  • Obtain your employer identification number (EIN)
  • Set up your business taxes
  • Determine your forms of payments
  • Select a payment processor, if taking credit and debit cards
  • Decide on whether you will be accepting insurance

Legal contracts and complaints are essential to shaping your business, so make sure you are working in partnership with a specialized lawyer. 

Finding the Right Premises and Location

To determine what location will work best for you, you will need to answer these questions:

  • Will you offer in-home services?
  • Can you deliver services via online platforms?
  • Do you need a physical space for your practice?
  • Can you rent an office space hourly?

The cost of buying or renting depends on location and size. It’s hard to give an estimate, but larger cities tend to have higher costs, while rural areas are lower.

Deciding on Your Company Name

The name you decide to give your ABA therapy company can influence your marketing strategy and brand image. Some key factors to keep in mind when choosing a name include:

  • Ensuring it is easy to spell and remember
  • Checking that it is unique - you can check this in the state’s business registry
  • Making sure the name you choose describes what you do
  • Don’t make your name too specific as this could limit your company’s future development 
  • If you are using an abstract name, double-check the meaning of it in different languages
  • Check domain availability. If possible try to get a .com domain and avoid dashes or numbers.

Insurance and Enrollment

ABA clinics develop important relationships with insurance providers. Accepting insurance as a form of payment is an excellent option which can add considerable value to your business, make your ABA therapies more accessible, and expand your practice’s reach. 

If this is the strategy you have chosen, there are different factors to keep in mind:

  • Each insurance provider has different requirements, payout timings, and reimbursement rates.
  • You must create the right insurance contracts with the insurance providers in your network to maintain control over your cash flow
  • You need to be aware of the credentialing process

Both you and the insurance provider need to agree that you will be able to offer insurance as a payment type. The process of becoming a certified care provider on an insurance provider’s panel is called credentialing. During the credentialing process, the provider will verify your education, certifications, and training to ensure your clinic meets its network standards. 

While getting credentialed is essential for your budding clinic, the process can take longer than a year. Thanks to the right practice management software, you can effortlessly keep on top of your Enrollment and Credentialing tasks and focus on what’s important. 

Putting Together a Team 

Your clinic’s team will be your most important asset, and ideally, you should focus on a diverse team. Below are some team members to consider:

  • Registered Behavior Technician (RBT) - covers similar roles and tasks to the BT, but also offers a certification issued by the Behavior Analyst Certification Board (BACB) for meeting their strict requirements.
  • Board Certified Behavior Analyst (BCBA) - these independent practitioners have graduate-level certifications and can supervise the administration of ABA treatments by the BT and RBT.
  • Board Certified Assistant Behavior Analyst (BCaBA) - this is an undergraduate certification that allows practitioners to work under the supervision of a BCBA or BCBA-D. BCaBAs can assist with tasks above the level of competency of BTs and RBTs.
  • Biller - this person will be responsible for billing, revenue cycle management, eligibility checks and insurance verification. This position is extremely important because cash-flow is the lifeline of any business. You may consider doing this yourself or leverage our outsourced billing services so you can focus on increasing billable hours and providing more care to clients. 

Supporting tasks of your business can be delegated to experienced contractors, such as marketers, billers, accountants, IT professionals, and attorneys. You also have the option to hire these positions in-house, but when starting a new business it might not be the right time to do this.

Investing in the Right ABA Therapy Clinic Technology

As businesses become more reliant on technology, ABA practices must as well. However, technology can represent a significant cost for a young ABA practice so understanding what is needed, beneficial, and profitable is essential. 

Here are some pieces of tech that you shouldn’t skimp on.  

Choosing a Practice Management Solution

A tailored Practice Management Solution is the most important system to integrate. Whether you are running a small practice or you are planning on opening multiple outlets, a Practice Management platform designed to meet your unique needs can:

  • Collect and analyze data
  • Help you manage your clients
  • Streamline appointment scheduling
  • Manage billing, fees, and insurance reimbursements
  • Increase the level of cybersecurity of your practice
  • Provide better, more customized services to your clients
  • Give authorized personnel immediate access to necessary documents and information
  • Streamline the channels of communication with your clients

All this not only helps you cut down costs, but can help you prevent financial losses, damage to your practice’s reputation, and customer dissatisfaction. 

Try to resist the urge to default to paper and pencil. We understand it’s easier to get started, but in the long run it can be overwhelming. The right practice management system is highly scalable, so you can entirely focus on expanding a company without having to switch or adapt systems. 

Setting Up a Business Email Address

Your clinic will require a custom business email address, which you can set up via Google Workplace or Microsoft 365. There are other valid alternatives, but these two options are the most widespread and provide a high level of integrations, spreadsheets, documents, calendar features, scheduling benefits, and team management features. 

Depending on your budget, you could also set up a professional address for your customer service, ABA therapists, and BCBA professionals, so that your clients can communicate directly with their providers and have a direct channel of communication with your clinic. 

Installing a Phone System

An integrated phone and VoIP system that connects multiple lines is an efficient solution to streamline your ABA clinic’s communication channels. These solutions are affordable even when you are getting started. 

If you end up using Google Workplace, you can sign up for Google Voice which integrates with your email system. Again, it’s easy to use your personal phone number, but we highly discourage that. Over time your phone number will be picked up by sales people and you will receive a lot of solicitations. 

Devising a Marketing Plan to Grow Your ABA Therapy Business

Now that you have set up your ABA therapy business, you will need to make it more easily visible, accessible, and discoverable by potential clients. To start growing your ABA business, you will need to design a marketing plan that is suitable for your goals and target market. 

If you are already focused on managing your practice and supervising ABA therapies delivered in your budding clinic, you should consider letting a professional marketer devise a strategy to attract patients. 

Some of the aspects to cover include:

  • Deciding on your brand voice and visual identity - The key goal of marketing campaigns for ABA businesses is to gain the trust of clients and patients. Creating a trustworthy voice and visual identity can not only help you increase traffic, but also improve your reputation!
  • Building a business website and focusing on Search Engine Optimization (SEO) - Having an online presence is essential to build trust and make your new business more discoverable. Use local SEO techniques to help patients, who are already looking for your services in your area, discover your practice. 
  • Gaining visibility with a Google Business Profile - Registering for a Google Business Profile is essential for any business. Thanks to this service, your clients will be able to immediately know your contact details, reviews, operating hours, and location. 
  • Create a social media community - While social media channels might not seem like the best marketing channel for your practice, there are many ways to use these platforms to your advantage. For example, giving them free advice, tips and suggestions can offer you unparalleled returns!  
  • Generate reviews and testimonials - Reviews help your organic visibility, but also help convert prospects into potential patients. It’s also important you are following the Ethics Code for Behavior Analysts guidelines regarding reviews.
  • Network with other practices and ABA clinics - Not all providers are your competition! By expanding your network and cooperating with other providers, you can help your clients enjoy better care. 

Keep The Future (and Scalability) of Your ABA Practice in Mind

According to the Bureau of Labor Statistics (BLS), businesses in the social assistance sector are among the longest surviving ones. However, the rate of survival of businesses has been shortening over the past 20 years. 

Around 25% of businesses survive past their 15th anniversary today, and over 65% of new businesses fail within their first 5 years on the market. These statistics tell us that the first years of your business are the most crucial ones. 

During this delicate time, it is important to focus on what investments can help your ABA therapy company grow and become more resilient.

Launching an ABA Therapy Clinic: Your FAQs, Answered!

  • Who can start an ABA therapy clinic?

To start an ABA therapy clinic, some states require you to be a Board-Certified Behavioral Analyst. Please check with your state’s requirements before fully investing into an ABA Therapy business.

  • What accreditations do I need to start a credible ABA therapy practice?

While you just need your training and certifications to get started, you can increase the credibility of your practice by getting accredited by BHCOE.

  • How much does it cost to start an ABA therapy clinic?

There is no clear data on this as it depends on various factors such as your personal goals, location, etc.

Get Started on Launching Your ABA Therapy Today

In this guide, we have explored the steps required in order to build an ABA therapy clinic. However, don’t forget that what makes it successful is the relationships you build with your customers. 

Partnering with the right contractors and professionals such as accountants, attorneys, and marketers will put you in the position to create these new relationships. But in order to increase reliability and growth, which is a contributing factor and result of building strong relationships, consider partnering with Rethink to integrate a personalized Practice Management System. 

 


the right hand of a female taking notes

Free ABA Data Sheets & Forms - Updated 2022

At Rethink Behavioral Health, we offer all-in-one behavioral health solutions for Applied Behavior Analysis (ABA) providers. We believe that technology allows providers to grow quicker through efficiencies, but we understand some still prefer paper and pencil.

At the end of the day, we want to be a resource for everyone, because when it comes down to it, all we’re trying to do is improve care for those who need it. With that in mind, we developed several data sheets that ABA providers can use to track their data.

These free ABA data sheets are easy to download. We encourage you to customize each sheet to meet the needs of your clients or service delivery model. If you’d like to learn more about our clinical and practice management solutions, please contact us here.

To download our Free ABA Data Sheet, please fill out your information below:

What’s included

We’ve broken this bundle of free ABA data sheets down into two primary categories, they are:

  • Programming
    • Skill Acquisition (SA)
    • Behavior Reduction
  • Supervision forms

Programming includes any goals that are trying to be accomplished to increase a variety of skills, such as daily living, communication and social skills, along with behavior reduction strategies, which includes any forms dedicated to tracking challenging behaviors.

Supervision forms will include any Procedural Integrity (PI) forms, Inter-Observer Agreement (IOA) and other tracking forms which we’ll go into more detail on below. These are more for program and staff evaluation.

Programming

As mentioned above, Programming pertains to any goals that are to be accomplished to increase skills and replacement behaviors, and decrease problem behavior. Programming is broken down into two categories; Skill Acquisition and Behavior Reduction.

Skill Acquisition

The first component related to programming is SA. In this section we’ll review Task Analysis (TA) and Discrete Trial Training (DTT), as well as several methods of data collection.

Task Analysis (TA) Data Collection

Clinician monitoring parent-caregiver behavior with complex behavior chains use this method to break them down into smaller steps.

A sequence of brushing teeth, washing hands, then going to bed is a common example.

Additional steps and targets can be identified by understanding each step.

Discrete Trial Training (DTT)

One of the most common ABA teaching methodologies is Discrete Trial Training. It is a one-on-one approach aimed at teaching students new skills in a systematic way.

DTT allows for massed or interspersed trial options. In our DTT Data Sheet, clinicians can track up to 10 individual trials and track accuracy and independence in responding.

Cold Probe Data Sheet

Cold Probe Data Sheets are ideal for tracking skill acquisition with many targets within a program.

They allow the parent or therapist to probe correct or incorrect responses at the beginning of the session prior to teaching. This can be used instead of trial by trial data collection.

Rate Data Sheet

The Rate Data Sheet helps track both the frequency and rate of targeted skills. These two factors are related, but have different definitions.

Frequency is defined as the number of times something occurs, while rate is the frequency of that same activity over a specified period of time.

Interval Data Sheet

Tracking intervals allow for an observer to set any amount of time to monitor the occurrence and/or duration of a behavior, and is an estimate of how often behavior is occurring. This sheet has space to track 20 intervals, which can be defined as whole, partial or momentary-time sampling (MTS).

Whole means that a behavior occured for the entire interval, partial describes a behavior that occured at any point throughout that interval, and MTS tracks if behavior is occurring at the end of the interval.

Duration Data Sheet

These sheets allows clinicians and therapists to track the lengths of time of each occurrence of behavior for each skill.

Behavior Reduction

Behavior reduction focuses on any maladaptive behaviors targeted for decrease. The two primary sheets that will be used in this component are the Antecedent Behavior Consequence (ABC) Data Log and Scatterplot Data Sheet.

Additionally, the Rate, Interval and Duration sheets detailed above can be used for tracking behavior reduction.

Antecedent Behavior Consequence (ABC) Data Log

The log provided is an unstructured ABA data log, as opposed to structured. This log can be edited to create a structured data sheet per client, which can be helpful for parents and caretakers as it makes the process more objective. Parents can select from a menu of options as opposed to writing their own thoughts down.

ABC Data allows parents to see patterns in behavior, including challenging behaviors such as tantrums, aggression, self-injury, etc, what causes them, and what follows them. This sheet helps track a specific behavior during an activity, along with the antecedent (before), consequence (after) and possible function.

Total duration is also an important component to track here, as duration may decrease before frequency of episodes decreases.

Scatterplot Data Sheet

Our Scatterplot Data Sheet helps to determine behavioral patterns with regard to time.

These sheets allow clinicians to track when behavior occurs in 15, 30 and 60-minute intervals over a 24 hour period.

Supervision Forms

Supervision forms included anything related to Procedural Integrity (PI), Inter-Observer Agreements (IOA), and additional forms used for tracking, but not necessarily related directly to client behavior.

Their purpose is to record data on parent and caregiver performance, so supervisors can provide feedback to improve performance as needed.

Task Analysis (TA) Procedural Integrity (PI) Data Sheet

When it comes to Task Analysis, procedural integrity is essential. PI is defined as how accurately a program is consistently implemented as it was intended.

This method is used by a clinician monitoring parent-caregiver behavior with complex behavior chains and breaking them down into smaller steps. Examples include a sequence of brushing teeth, washing hands, then going to bed. By understanding each step, additional steps and targets can be identified.

With TAs, any type of skill can be targeted. Our TA PI Data Sheet allows clinicians to track trials for pre-teaching behaviors, in-session steps and space at the end for error correction.

Discrete Trial Training (DTT) Procedural Integrity (PI) – Data Sheet

This is a structured method for teaching a new skill. Because of this, it’s especially important that caregivers implement trials as programs.

It is also used to evaluate a parent or caregivers implementation of DTT trials. This free ABA data sheet tracks up to 10 individual trials, along with pre-teaching, within-session and error correction responses.

Natural Environment Training (NET) Procedural Integrity (PI) Data Sheet

Last, but not least, is Natural Environment Training. NET is less structured than DTT, and allows clinicians to capture teaching opportunities as they occur naturally.

A child may be able to learn a skill in a structured environment, but may struggle to generalize the skill in the natural environment. This is an important factor for educators to understand, so they can tailor instruction so students can apply lessons learned naturally.

Similar to DTT, this free ABA data sheet tracks up to 10 individual trials, including pre-teaching, within-session and error correction responses.

Inter Observer Agreement (IOA) Templates

IOA data sheets are designed to evaluate accuracy in ABA data collection and identify observer drift or bias.

With IOA data collection, two people will observe a child or client at the same time, and record data on the target behavior or response. Once completed, they will compare their data.

The process helps determine if behaviors are well-defined, recorded accurately and consistently. This is also known as program correctness, and highlights the importance of recording data accurately.

Behavioral Skills Training Tracking Form

The Behavioral Skills Training Tracking Form is used to teach a new skill to a caretaker or caregiver. This may be an especially effective method of training with telehealth services.

The instructor provides a set of instructions and models for parents what to do step by step. The parent practices while the ABA therapist or supervisor watches and provides feedback, and this process continues until the skill has been mastered.


Growing Resilience to Manage Compassion Fatigue in Healthcare

About This Webinar

The mental & emotional wellbeing of employees is the #1 concern for 93% of healthcare employers. Join us to learn how Whil (Rethink’s new division for employee mental health) helps healthcare professionals build the foundational skills for resilience, emotional wellbeing, and good mental hygiene.

Join Joe Burton, CEO of Whil for this fast-paced, experiential and funny peek into stress management. Learn practical techniques that you can immediately apply and best practices to create a culture of wellbeing. See first-hand why the top healthcare organizations are now investing in training to help employees manage stress while improving focus, results, and patient relationships in high-performance cultures. You’ve never had this much fun learning how to reduce stress!

About the Speaker

Joe Burton

Founder & CEO of Whil, a Rethink Division

Joe Burton is the founder and CEO of Whil, a Rethink Division. Whil is the leading digital wellbeing training platform helping professionals manage their Personal Well-being, Professional Resilience, and Parenting Challenges. Joe is an entrepreneur in scientific wellbeing, former President of Headspace, and spent fifteen years as a global COO in public companies. He’s an alumnus of Harvard Business School, author of Creating Mindful Leaders, and regular contributor to Forbes, Business Insider, and HuffPost. He’s worked in over 50 countries and travels the world speaking on disruption, leadership, resilience, culture, emotional intelligence, and mindfulness as a competitive advantage.


woman doing billing from office

5 Tips For Moving Away From Manual ABA Therapy Billing

Whether you’re starting a new ABA therapy business or you’ve had one for a while, it’s tempting to default to paper or pencil when documenting things such as billing. It was originally the only way and can seem like the simplest way to keep track of things during the moment. The truth however is that it can cause lots of issues for your business.   

In order to become more scalable and to avoid being overwhelmed over time, you’re going to want to enter the modern age of billing with automation. Technology will improve your processes, relations with clients and vendors, and ultimately be what you need to help your business grow and find more success in the 21st century.

In this blog post, we’re going to look at five tips to help you move away from manual or pencil & paper billing to automated billing. By the time you’re done reading, you’ll wonder why you've been using an eraser regularly in 2022!

1. Audit Your Software, Systems and Processes

An integral component of automating your billing processes is having a solid EMR system to support your business. This will allow you to securely store client’s PHI and access online scheduling. 

With systems that allow scheduling, this will help automate the billing process by accessing data connected to the scheduler which will flow into your billing system to generate claims, according to services scheduled/rendered. 

Analyze the amount of time currently being spent on manually billing for your funders and apply a dollar value to that time – consider items such as looking up patient demographic information, calculating service units, adding pertinent claim information onto your form, time spent keying into payer portals, etc. 

Many funders are also forcing providers to use electronic options for claim submissions, or they are adding fees for acceptance of paper claims which should be considered when looking into your billing options. 

Lastly, analyze your current processes for manual billing – how are you tracking billing compliance with each of your funders, what are your audit procedures, how are you tracking claim reconciliation? These should all be considered when reviewing the RCM (revenue cycle management) processes.

2. Look for an Automated Billing Solution Integrated with a Clearinghouse

Most EMR systems will have either a built-in billing module or a connection to a billing system that will allow for electronic claim submissions and tracking. Attend demos for these systems to help determine the system that will best suit the needs for your business and will allow you to manage your revenue cycle effectively and efficiently. 

Important qualities to look for when determining a billing system include:

    • Process automation
    • Clearinghouse connection & payers available through that clearinghouse
    • Ability to handle unique billing scenarios for complex payor requirements
    • Reporting (full visibility into key functional areas – denials, under/over payments, contract rate comparisons, etc.)
    • Denial and general A/R management and tracking
    • Easy ERA connections for payment posting
    • Patient billing features (electronic statement options, ability to pay online, etc.) 

3. Assign an Owner to Manage the New Billing Process

The person managing the billing process should be the point of contact during implementation of the new system and should be ready to fully learn the system before anyone else in the organization. 

This person will also be responsible for creating workflows and documentation on processes established by your business. They should be prepared to create training documents on the system related to billing as it pertains to your business.

4. Create Standards Across Your Organization

Now comes the fun part! It’s time to sit down once you have access to your system and document the normal workflow from A>Z. This is such a critical piece when starting out in the event someone else needs to cover or you grow your team, and includes creating SOPs (standard operating procedures) that outline steps to take within the system to manage the full RCM process. 

Recommendations are to break down the revenue cycle into each separate component and then start creating workflows from there. Examples of this include:

    1. Patient intake procedures & documentation of billing information
    2. Verification of benefits
    3. Authorization Documentation/Tracking
    4. Incomplete/Un-verified Appointment Reporting
    5. Claims Auditing/Claims Scrubbing (Initial Billing)
    6. Rejection Management
    7. Payment Posting
    8. Denial Management
    9. Patient Billing
    10. Audit Procedures (Unbilled charges, payments, etc.)
    11. Reporting

Once you have created the SOPs for each functional area, it’s also important to start looking at your billing schedule for the Initial Billing process above. A few things to think about:

    • When are staff required to sign off on sessions if using an integrated scheduling system?
    • How frequently will you be billing? Daily, weekly, bi-weekly? Will you have a set day where you will dedicate to auditing and generating your claims through the system?
    • When and how frequently will you follow up on any rejections from the clearinghouse?
    • When and how frequently will you be posting payments that come through your clearinghouse? Weekly, daily, etc.?
    • How much time will you dedicate to general A/R management?
    • What does your reporting schedule look like? Weekly or monthly reporting?

You will then also want to start thinking about audit procedures once you have established normal operating procedures to ensure all staff remain compliant with the guidelines established above. These will include various checks and balances put into place by your organization to assure all steps are being followed for revenue efficiency.

    • How are you auditing your payments that are getting posted? Are you reconciling against your bank statements and at what frequency is this occurring?
    • Are you monitoring under/overpayments? Does your system have the capability to report this back to you?
    • Spot checks with billing to assure payor compliance is being met
    • Unbilled audits to assure all sessions were captured and billed through the system

5. Determine Measures of Success by Implementing KPIs and Reviewing Your Time Savings Analysis

There are several known KPIs within the RCM industry that you can report on to compare/benchmark to determine revenue efficiency. An ideal billing system will have multiple reports available for you to run to gather the bulk of the information needed below for calculations. 

A few of these KPIs are outlined below along with the industry benchmark to compare against:

DRO (Days in Revenue Outstanding)

    • This indicates your overall revenue cycle efficiency.
    • Calculation = Divide the total accounts receivable by the average daily charges. The result is your DRO.
    • 50+ days is standard – healthy DRO is 35-45 days

Net Collection Rate

    • This measures how effective your practice is at collecting reimbursement for services rendered.
    • Calculation = total payments divided by total net charges (charges less any approved write offs)
    • >95% is standard

Rejection Rate

    • This helps measure proper coding and compliance with payor standards/expectations.
    • Calculation = Total number of rejected claims divided by the total claims filed within a given period.
    • 5-10% is standard

Denial Rate

    • This is your ability to comply with payor requirements to enable accurate claim payment, and relates directly to your claims scrubbing/auditing process above.
    • Calculation = Total dollar amount of claims denied by payers within a given period divided by the total dollar amount of claims submitted within the given period of time.
    • 5-10% is standard

Total A/R Over 90 days

    • This indicates revenue cycle effectiveness at collecting against your A/R.
    • Calculation = Divide total dollar value of AR greater than 90 days old by dollar value of total A/R
    • <25% is standard – healthy indicator is below 15%

To summarize, improving automation is key to overall business success, especially when it comes to back-office functions for ever-growing organizations. There is a lot that goes into converting from manual billing to automated billing through an integrated system and those factors should be considered in your analysis, along with cost savings and time savings.

Your revenue cycle management tools and resources are key to business success. If you do not have the necessary tools or resources to dedicate, consider outsourcing as an option while growing your business.