The call I get every month
This post is about the signals that a billing team is telling you what you want to hear. If the problem is specifically denials, see denied-claims-never-resubmitted.
Last Tuesday, an orthopedic clinic owner called me with a familiar problem. His billing company reported a 95% collection rate. Clean claims, timely submissions, everything green across the board.
His bank account told a different story. Revenue was flat. Payroll felt tighter every quarter. He was seeing more patients than last year but taking home less money.
I asked him one question: "When was the last time you compared your billing reports to your actual bank deposits?" He paused. Then he said, "I don't think anyone has ever done that."
He is not unusual. That call happens at least once a month with a new clinic owner.
The gap nobody tracks
Here is what most clinic owners don't realize: your billing company and your accountant are looking at completely different numbers.
Your billing company tracks claims submitted, charges posted, and collections received in their system. They report a collection rate based on what they billed versus what came back. That number looks great because it is designed to look great.
Your accountant sees bank deposits. Checks that cleared. ACH transfers that landed. They reconcile your books against your bank statements. They have no idea what was billed, denied, appealed, or written off.
Nobody connects these two pictures.
The billing company says 95% collected. The accountant says revenue is $4.2M. But when you actually trace dollars from the moment a patient walks in to the moment cash hits your bank, there is a gap. Sometimes it is 6%. Sometimes it is 12%. On $4.2M, that is $252K to $504K per year that just evaporates.
What we actually find
When we do a full revenue cycle review for a clinic, the same problems show up over and over again.
Unsubmitted claims sitting in queues. The billing team batches claims. Some get stuck. A coding question holds up a batch. Nobody notices for two weeks. By the time someone catches it, you have 30 days of delayed revenue.
Denials marked "resolved" that were never reworked. The billing system shows the denial was touched. Someone opened it, looked at it, maybe even added a note. But the claim was never corrected and resubmitted. In the system it looks handled. In reality, that money is gone.
Underpayments accepted without appeal. A payer sends $120 for a procedure your contract says should pay $185. The payment gets posted. Nobody checks it against the fee schedule. Multiply that by hundreds of claims per month, and you are leaving tens of thousands on the table every year.
Patient balances written off too early. After one statement and maybe one phone call, the balance gets written off. No payment plan offered, no second attempt, just gone. We see clinics writing off $8K-$15K per month in patient balances that were never seriously pursued.
Credits from payers sitting unclaimed. Overpayments, duplicate payments, credit balances. They show up on the aging report. Nobody requests the refund or applies the credit. It just sits there.
None of these show up in the billing company's collection rate. Every one of them shows up in your bank account.
The real numbers
Let me make this concrete.
In our experience reviewing clinic financials, practices typically lose $30K or more per $1M in revenue to these gaps. That is the conservative end. We routinely find $50K-$80K per million in recoverable revenue when we do a full audit.
Now scale that to a real practice. A 3-location clinic doing $5M per year. At the low end, that is $150K per year in leaked revenue. At the higher end, $400K.
That is not a rounding error. That is a provider's salary. That is the expansion you have been putting off. That is the difference between a 12% margin and a 20% margin.
We worked with a mental health practice (anonymized Sorso client, Pacific Northwest, three locations, about $3.2M in annual revenue). The owner was frustrated because revenue was growing, but her take-home pay was not keeping up. When we dug in, we found that her billing company was reporting solid numbers, but actual cash collections told a different story. Between unworked denials, underpayments, and patient balances that were being written off after a single statement, she was losing roughly $17K per month.
That is $204K per year. Her billing company never flagged any of it because, by their metrics, everything was fine.
What to do about it
You do not need to fire your billing company tomorrow. But you do need to start verifying their work.
1. Reconcile billing reports with bank deposits every month. Pull your total collections from billing. Pull your total deposits from your bank. Compare them. They should be close. If there is more than a 3-5% gap, something is wrong, and you need to find out what.
2. Track denial follow-through rates. Ask your billing company for a denial report. Not just how many denials came in, but how many were reworked, how many were resubmitted, and how many were collected on the second attempt. If they cannot produce this report, that tells you something.
3. Audit your top 5 payers quarterly. Pull the contracted rates for your most common procedures from your top 5 payers. Compare them to what you actually received. You will almost certainly find underpayments. Some of those will be within the timely filing window for appeals.
4. Look at your write-off report. How much are you writing off each month? What percentage of those write-offs are patient balances under $500? How many attempts were made before the write-off? If balances are being written off after a single statement, you are leaving money behind.
These four steps will take your office manager a few hours per month. They will also tell you whether your billing company's 95% collection rate is real or performative.
What your numbers actually look like
Most clinic owners have never seen their billing data and bank deposits side by side, broken down by payer and by location. That is what we build in the first 30 days of working with a practice.
If you want to know what your numbers actually look like, take the free assessment. It takes 15 minutes and gives you a financial scorecard specific to your practice, with a clear picture of where money might be falling through the cracks.
