Payor Mix

The financial health of any medical office, group, ambulatory surgery center, or hospital
is dependent upon several factors. One of the leading factors when discussing reimbursement is
Payor Mix. Payor Mix is the percentage structure of all the insurance carriers a practice accepts
with respect to the total revenue of the practice.

Just like your patients’ health, your practice’s health needs a well-balanced payor mix to
ensure the longevity of your practice. Not all payors pay the same reimbursement rates for the
same services rendered. When you think of the different payors that your practice is contracted
with it is to be expected that your government payors will pay less than your PPO insurances
your practice is contracted in network with. Therefore, it is also extremely risky for a practice to
only accept one or two insurances and not a good mix of payors. Payors have the ability to
impose their lower fee schedules, require prior approval and authorization for services, and
request burdensome audits. Then in turn, if the payor finds something not to their standards, they
can re-coup all the money paid to your practice retroactively.

While the payor mix is largely determined by the demographics and employer mix in
your practice area, it is recommended that you review your payor mix and fee schedules
periodically to actively correct any imbalance. Furthermore, keeping track of your individual
payor contracts and expiration/renewal dates will furthermore give your practice the opportunity
to re-negotiate contracted rates with non-government insurance payors. Credentialing and
reviewing your practice’s payor mix and their associated contracts are a specialty of Expert
Medical Billing.