How to create incentive plans that inspire medical billers

Effective performance incentive plans motivate employees without straining your organization’s resources. While medical billers might prefer cash or time off, it’s essential that any incentives align with your budget. It’s also important to tie them to specific results rather than to permanent entitlement.

When you craft any incentive plan, consider its design, goals, and timing. Here are 10 tips to craft the right incentives for your billers.

Billing is an operational process, not a desk or a department. Your incentive plan should recognize that everyone in the organization plays a role in that process. For instance, front office staff improve collection rates when they consistently ask for co-payments from every patient who owes one. Schedulers reduce days in accounts receivable when they collect balances during appointment scheduling. An effective plan ties rewards to clear targets; for example, always verifying insurance eligibility. Because many staff work in teams, base rewards on both team performance and individual achievement. Doing so will promote collaboration.

Canceling a popular incentive program can deflate employee morale. Keep your program sustainable by capping individual rewards based on your budget, for example, $100 per month. While there might be exceptions, such as when incentives replace part of salaries, even modest incentives of $25 or $50 a month are appreciated by employees and effective at boosting performance.

Your incentives might inspire a range of unintended consequences. For instance, want to reward a biller for correcting claim errors faster? Denial rates could go up if they skip important steps for speed. Want to reward billers for resolving all denied claims within 30 days? Ensure they aren’t reclassifying claims denied for missing documentation, unbundling, medical necessity, and other non-contractual adjustments to meet the goal. Most employees are conscientious, but they’ll go in the direction in which your incentives push them. Remember to weigh the potential benefits against the potential pitfalls.

Many organizations assign accounts to billers based on payer. That’s helpful for building core knowledge about specific payers but can create discrepancies in incentives. For example, setting the same standards for Medicaid and Medicare accounts might not be equitable. How long claims remain in accounts receivable, and their complexity, can also vary by specialty. 

Before you implement your incentive plan, work with employees to weigh payers, using Medicare as the benchmark. In many states, Medicaid consumes double the resources and time as Medicare; workers’ compensation may take triple. The weightings won’t be precise, but tailoring performance goals — say, 25 days outstanding for Medicare, but 50 for Medicaid — to payer types makes your incentives more effective. Be prepared to revise goals as your systems, software, or payer mix evolve.

Memories are short. Keep incentives tightly linked to performance by distributing rewards soon — no more than 30 days — after the monitoring period ends. Because monetary rewards are taxable, you might find it easiest to distribute them as part of employees’ regular paychecks. However, make sure to provide a separate written statement with the pre-tax reward amount so employees can understand their earnings before deductions. This transparency can reinforce the value of their performance.

An effective incentive program is both understandable and easy for participants to track. If the plan is too complex, billers won’t understand what you want them to accomplish and may doubt its fairness — and yours. Ensure the indicators and formulae are clear, so employees can work towards your intended goals. Spur competition by showcasing progress charts and sharing results at staff meetings.

Smaller rewards — $25 to $50 per month — can be impactful. Ask billers to suggest reward amounts; you might be surprised at the modest figures they consider worthy. Likewise, keep incentive plan criteria short and sweet so everyone knows what they need to do to succeed.

It sounds so obvious, but write down your plan and make it readily available to employees. Distribute copies when you announce the plan, emailing them or posting them on your organization’s central online hub for employees.

Review your incentive plan’s results against its intended performance goals each year. In some cases, you may be able to quantify the plan’s impact, such as by determining the monetary value of reduced denials from in-house errors. Once you reach a goal, such as collecting all patient co-payments at the time of service, move on to other objectives.

Financial rewards can shift from a motivational tool to an expectation. This expectation can lead staff to rely on them, and when they're no longer available, morale might decline due to perceived loss. To avoid this, stick to short-term plans of 3 to 6 months. Better still, consider non-monetary incentives. They can resonate because they are perceived as more spontaneous and sincere compared to cash.

Try these ideas to reward billers for reaching goals:

When choosing non-monetary incentives, opt for the ones that best fit your management style and workplace culture. Be mindful of your selection based on where your employees work. If you have one — or a team — of remote employees, incorporate them in your plan. Even a quick game like a virtual scavenger hunt can be a great motivator, particularly if you integrate fun prizes for the winner(s).

The most effective reward — monetary or non-monetary — is simply to say “thank you.” To incent billers, say “thank you” more often, or take the time to send a thank-you note to each employee to state your appreciation for a job well done.