I saw a wonderful post recently that explained healthcare billing better than most explanations I’ve heard.
It went something like this:
Imagine you pay your monthly Netflix subscription. Then you pay again when you actually watch a movie. And then, three months later, you get another bill, because one of the actors wasn’t in Netflix’s network.
Ridiculous, right? It’s a post about insurance, not Netflix.
Now flip it around and look at it from the practice’s side.
You see a patient. You count that revenue. Then:
The patient doesn’t pay their portion. The money you counted never arrives.
The claim was coded incorrectly. The insurer claws back money it already paid you.
The patient is readmitted to the hospital. Another clawback.
Or the claim is denied outright. No payment for that visit at all.
Unlike most businesses, what you’ve earned isn’t settled when the work is done. The person in the chair usually isn’t the one paying you. An insurance company is, and it can change its mind months later.
That means a practice can look financially healthy today while carrying losses that simply haven’t shown up yet.
It’s not the most common situation. But I’ve looked at practices where that’s exactly what was happening.
If your payers clawed back 5% of last year’s revenue tomorrow, would you see it coming?
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