Question: The coding department of the Community Physicians Clinic is interested in purchasing a software program that will edit claims before they are sent to the

  1. The coding department of the Community Physician’s Clinic is interested in purchasing a software program that will edit claims before they are sent to the Billing Office. The license fee for the software is $60,000 per year. The software is expected to reduce the number of errors on claims and thus reduce the number of claims (denials) returned to the clinic for recoding. Currently, the department codes 47,600 provider visits per month, and 500 claims are returned each month for recording. The facility pays two FTEs in the Billing Office $14.00 per hour each (plus 25 percent benefits) to refile the returned claims. The software company promises that its software will reduce the number of returned claims by 90 percent. 

  3. a. What is the rate of claims that are currently being returned for recoding each month? Round to two decimal places. 

  5. b. How many claims are estimated to be returned after the installation of the software? 

  7. c. If the clinic eliminated the two FTEs that handle the returned claims, what savings would it realize after installation of the software? 

  9. d. What is the payback period? e. What is the return on investment?

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