02 Nov Have You Looked at Your Payor Mix Lately?
Have you ever calculated the payor mix for your practice? Do you track any changes to your payor mix on a regular basis (annually / quarterly)?
Your practice’s payor mix is a calculation that allows you to look at what percentage of your total business is attributed to a particular reimbursement source. If you decide to calculate based on charges, and you assess that half of your charges are attributed to payor A and a quarter each of your charges are attributed to payor B and payor C, then your payor mix is 50% payor A, 25% payor B, and 25% payor C.
Instead of charges you can also look at payments to see what percentage of your income is coming from each source, or you can look at this by encounter, or unique patient – it depends on what aspect of your business you’re trying to assess.
It’s a good idea to track changes periodically as well. For example, if a large percentage of your patient base comes from a large employer group that provides BCBS insurance to their employees, and one year they decide to shift to Cigna, depending on what your reimbursement contracts look like for each payor, it might be important to know about this change and how it might affect your business. If you don’t know about a change like this before it occurs, assessing payor mix can also help answer questions about financial changes to your practice.