Charge Lag Hangover; it's costing you
Charge lag or better know as, “how long does it take to get a dang claim out the door!?” is the gap between seeing the patient and actually billing out the claim.
When the crew is on point you hum along getting claims out the door in 24-48 hours. But when things aren’t a well oiled machine, even just one extra day can drain your cash, add to your Account Receivables, and increase your denial chances.
These days, the average practice has a charge lag of about 4-7 days.
The issue: Every day increase in lag over 3 may reduce collectible revenue by about 3%.
We know. Not cool. But here’s some math and some answers.
The math part
Let’s say you are crushing the game, your charge lag is 2 days and your net collections are 96%. Here’s what the monthly impact may look like, using even smaller lag impact numbers:
This assumes 21 clinic days per month.
And yes, these are even more conservative numbers as to the impact of a higher charge lag. But even smaller numbers really start to add up.
Annualized, a monthly $13K impact is $156K.
What would you do with an extra $156K in revenue this year?
For work you’ve already done?
Why lag has such a big impact
1/ Late or missing documentation - It can take time on the front end to get encounters closed and charts signed off. We get it, after a long day the last thing you want to do is get on the computer to chart. The wine doesn’t drink itself after all.
2/ Timely-filing limits - Those irksome commercial plans will flat deny claims after 60 days from time of service. Seems like a long time, but you might be surprised. Plus, we’re not talking about 60 days from date of service to submission, we’re talking about 60 days to get to a resolution. So if it takes a week to submit, their turn around time is 3 weeks, you get a denial, and then need to resubmit, the clock has been running the whole time.
3/ Denial re-work drag - Each denied claim costs money to fix and delays cash another 2 to 3 weeks.
4/ Documentation recall - Clinicians forced to reconstruct visits days later leave modifiers off, downgrade levels, or omit minor procedures. That’s revenue for work that was already done, gone forever.
Monday-morning playbook - the doing something about it part
Pull last quarter’s charge lag. Your EHR can tell you or use Excel to calculate the time between date of service and first submission.
Post the running average lag on the break-room fridge. Or somewhere. Make the KPI visible.
Track, tweak, update. It’s measured, now manage it. What creates roadblocks, bottlenecks, issues? Jump in and fix them. Get the process running smoothly.
Celebrate a 2 day lag streak with tacos. Because, always tacos. And generally mimosas during clinic hours is frowned upon.
Wrapping up
Payers will keep inventing new ways to stall your money and preserve their float. Don’t help them by slow-rolling your own claims. Charge lag is the rare RCM lever that:
Costs almost nothing to fix
Speeds up payments
Can lower denials without writing a single appeal letter
Close the lag gap and you reclaim that margin. No extra patients, no payer negotiations, no bankers needed. Just some good old fashioned speed.
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