{"id":836,"date":"2021-08-18T16:41:51","date_gmt":"2021-08-18T16:41:51","guid":{"rendered":"https:\/\/www.bikhamhealthcare.com\/provider-resources\/?p=836"},"modified":"2026-02-03T20:06:06","modified_gmt":"2026-02-03T20:06:06","slug":"how-to-manage-your-payer-mix-in-order-to-improve-your-bottom-line","status":"publish","type":"post","link":"https:\/\/www.bikhamhealthcare.com\/provider-resources\/how-to-manage-your-payer-mix-in-order-to-improve-your-bottom-line\/","title":{"rendered":"How to Manage Your Payer Mix in Order to Improve Your Bottom Line"},"content":{"rendered":"\n

In the medical industry, a dollar charged isn’t always a dollar earned. Instead, physicians are paid an amount that equals the sum of the copay, the deductible, and the amount that the patient’s insurance agrees to pay. However, this sum rarely adds up to the figure that a physician actually charges for their services rendered. How much less this amount that is actually paid ends up being ultimately depends on the payer that is making the payment.<\/p>\n\n\n\n

For this reason, payer mix can have a significant impact on a medical practice’s revenue. In this article, we’ll examine what payer mix is and how to create an ideal payer mix in order to maximize your practice’s revenue.<\/p>\n\n\n\n

What is Payer Mix?<\/strong><\/h2>\n\n\n\n

Payer mix is essentially a breakdown of a medical practice’s sources of revenue. At the broadest level, payer mix demonstrates the percentage of revenue coming from private insurance companies vs government insurance programs vs patients that pay out-of-pocket. Payer mix can then be further broken down into the individual companies and programs that make up the private insurance companies and government insurance programs categories. Since different payers will pay different amounts for the same services, understanding and managing your payer mix is an important part of maximizing your practice’s revenue.<\/p>\n\n\n\n

Understanding your Payer Mix<\/strong><\/h2>\n\n\n\n

It’s first important to point out that government insurance programs almost always pay less for any given CPT code than private insurance companies and self-paying patients. For this reason, many healthcare practices choose to limit how many patients on government insurance programs they agree to see. According to a 2019 survey<\/a>, though, 34.1% of the population in the United States is covered by government insurance programs. Refusing to see these patients, therefore, can end up costing a healthcare practice a lot of business. As with most things in life and business, managing your payer mix for optimum revenue is all about finding the right balance.<\/p>\n\n\n\n

Before you can go about optimizing your payer mix, you first need to form a firm understanding of how your current payer mix shakes out. There are several different ways to organize your payer mix in order to get a better understanding of where your revenue is coming from. Breaking your payer mix down based on your most commonly billed CPT codes is one strategy. It may also be helpful to organize your active patient panels based on the payers that they use. Once you have organized your payer mix into categories such as these it will be much easier to analyze your payer mix and determine where there is room for improvement.<\/p>\n\n\n\n

How to optimize your Payer Mix for maximum Revenue<\/strong><\/h2>\n\n\n\n

The first strategy for improving your healthcare practice’s revenue by optimizing your payer mix is to negotiate higher fees with the payers who pay the least for any given CPT code. The busier your practice is, the more leverage you will have in these negotiations. In many cases, informing a payer that you intend to limit their panel size if they do not increase their reimbursement can be an effective way to secure higher fees out of your lowest-paying payers. If you cannot get a payer to agree to an across-the-board increase of their fees, you may have more luck trying to negotiate higher fees for your most commonly billed CPT codes or trying to negotiate higher fees for the CPT codes where the payer falls well behind the average market rate.<\/p>\n\n\n\n

\"\"<\/figure><\/div>\n\n\n\n

Another way to optimize your payer mix for increased revenue is to increase the panel size of your highest-paying payers by actively recruiting more patients that are covered by those payers. For example, if you find that a specific company provides insurance from a high-paying payer to its employees, targeting those employees with your marketing efforts is one great strategy for growing the panel size of that high-paying payer. You may also find that patients who use a specific payer tend to congregate in the same geographical area, meaning that targeting your marketing materials based on zip code can be another effective way to grow the panel size of any given payer.<\/p>\n\n\n\n

Ultimately, adjusting your healthcare practice’s payer mix isn’t always a simple and straightforward process. It would be wonderful to only accept patients who are covered by the highest-paying payers, but this simply isn’t feasible for most healthcare practices. Instead, the best you can hope for is to create a more ideal payer mix by actively targeting patients who are covered by high-paying payers and negotiating better fees from the payers that are lagging behind. When properly executed, though, this strategy for optimizing your practice’s payer mix can have a significant impact on your bottom line.<\/p>\n\n\n\n

How Bikham Healthcare can help you better manage your Revenue Cycle<\/strong><\/h2>\n\n\n\n

At Bikham Healthcare, we are experts at helping healthcare practices all over the country improve their revenue through optimized revenue cycle management. Our revenue cycle management services<\/a> include a thorough assessment of your practice’s entire revenue cycle – from an analysis of your payer mix to an analysis of your expenses and beyond – that is designed to pinpoint potential areas of improvement so that we are able to provide personalized and highly effective recommendations for growing your revenue. If you would like to learn more about how the revenue cycle management professionals at Bikham Healthcare can help you grow your practice’s bottom line, feel free to contact us<\/a> today.<\/p>\n","protected":false},"excerpt":{"rendered":"

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