7 Important Elements that count for a good Medical Billing Bonus System
The field of medicine and Medical Billing is very diverse. There are a lot of factors, and sectors available that make this field very difficult to address or manage. Medical Billing System generates different kind of employment that include executives to do medical billing & coding, medical billing professionals and other employees who that might not be that sound in their qualifications but are necessary for the functioning of the industry.
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Designing a bonus system that aptly caters to the expectations of the employees, who are an integral part of an industry, without consuming the essential profit percentages of the business, is very important. It is no different in the Medical billing and coding industry. Apart from other medical coding and billing solutions, the importance of designing a good medical billing bonus system has come to the forefront in the current industry trends. Every company wants to design the best system to retain their core employees and continue to excel in their medical services without having to re-structure their goals or plans.
Below, we are going to list some of the very important elements that should never be neglected when designing a sound medical billing bonus plan-
1.Percentage or fixed amount
Bonus plan can be a fixed percentage of the costs to the company (CTC) or of the take-home salary or a particular fixed amount such as $1,000 or so and it varies for different positions. Considering the most popular and recommended process, the Bonus plan based on the percentage of CTC is the better alternative. By acquiring a percentage, a company tends to automatically reward an employee based on his/her status or position in the company. Also for accounting, and calculation purposes, it is easier and transparent.
2.The essence of the bonus
The bonus should always be an important sum that employees need to worry about. For instance, if the bonus is about 5% of the CTC/salary or below, not many employees will be interested to work the extra yards to aggregate more bonus because bonus, in employee terms, become irrelevant. To keep the essence of bonus, it is important to set a bonus of a considerable amount that is minimum of 10-15%, so that employees can get motivated to work for the bonus.
3.Pay-out frequency
While most companies prepare to pay out bonus once in a year, it might not be a bad idea to pay-out bonuses in a different frequency. Some companies’ pay-out bonuses to their employees quarterly and some even pay their employees a monthly bonus. However, monthly bonus tends to become more of incentives and quarterly bonus suits businesses that are seasonal in nature. Considering the nature of medical billing and coding business, that is uniform almost throughout the year, paying out bonuses once in a year is the best option.
4.Holding period
Most of the industries or companies don’t pay-out bonuses immediately and hold it for a couple of months or more. This is a strategic move that prevents attrition and keeps accumulating employee’s interest for a bonus in check. For instance, if an employee’s bonus is due on April, the company decides to wait for 3-4 months for round tables, performance appraisal, determining company’s fiscal position, etc., and releases bonus in the month of August or September.
This policy must be consistent and should not get implemented on selected employees. Also, the appropriate holding period should not exceed 4 months as it can lead to dissent and dissatisfaction amongst employees. Most resignations or exits occurs after the bonus month especially in a company that distributes bonuses once in a year. Many reports have suggested considerable control of attrition for companies which have a holding period of 2-3 months.
5.Clear distinction based on the levels of work
The bonus slab cannot be the same for all work setup. The medical coding and billing industry have many employment avenues in which some perform backend work and some perform critical forefront work. Both the tasks are not easy and are complex than other. A company can consider granting different bonus slabs based on the complexity of the work or based on the position of the employee.
If there is a clear hierarchy in the organization, then bonus based on the employee position can be a great option. However, if there isn’t a clear benchmarking of hierarchy or positions in the organizations then the bonus system must account based on the nature or complexity of work, which can be a tricky task. It is important to understand that no employee accepts the fact that their work is less complex to others!
6.Clear measurement tools
There are many ways how employees in the billing and coding industry can goof up and present misleading facts and figures. For instances, an employee can locate easier claims and finish them in huge numbers compared to other employees. So quantity can individually not be a factor. An employee can process hundreds of claims and do billing/coding too but it remains unchecked or unknown, on the quality front, that how many claims were processed/coded right!
Considering how soon it can lead to demotivation amongst employees and how it can lead to malpractices and prejudices/preferences, it is important to place transparent and clear measurement criterions. It can be a difficult industry to establish measurement standards or tools but doing so will help keep employees high on spirits and a lot more consistent in the performance with the highest quality.
7.Try rewarding many rather than one
Most of the companies tend to majorly reward to a set of people and ignore other people who have worked exceptionally well. They don’t get rewarded due to the high-end competition. This can lead to a drop-in performance and increase unhealthy competition. The company’s focus, especially in the industry like medical coding and billing where you have a larger workforce, should be on to reward as many deserving people as possible and not shower all your budget/rewards for few outstanding ones.
A good bonus system can do wonders for an organization and one should keep these 7 elements in mind while designing one for your medical billing bonus system. It can prove decisive in motivating and retaining your employees with consistent performances.