Private specialist practices run a considerable percentage of outstanding accounts over 90 days. Practices are running with reduced staff due to rising costs, and not all tasks can be completed in the alloted staff time.
Many outstanding accounts are easily resolved and collected by rectifying errors. Third party claims are more time consuming and specialist knowledge required to collect outstanding accounts.
A typical specialist practice with $500K–$1M in annual billings is likely carrying $50,000–$120,000 in uncollected or disputed revenue at any given time. A meaningful portion of that — particularly the workers comp aged debt and Eclipse claim errors — is recoverable with the right expertise.
VIRTUALLY A PRACTICE
Specialist Medical Billing Services
virtuallyapractice.com
The Hidden Revenue Problem in Medical Practices
A business case for specialist billing review and debt recovery
Most medical practices are leaving a significant portion of their earned revenue uncollected — not through any fault of their own, but because claim errors, insurer delays, and workers compensation disputes require specialist expertise to resolve. This document outlines the scale of the problem and what recovery looks like in practice.
The Scale of Uncollected Revenue in Australian Medical Practices
| ~12% of billed revenue goes uncollected on average Across all payer types — that is revenue already earned but never received. | 88% average net collection rate for medical practices Meaning 12 cents in every dollar billed is written off or lost to claim errors. | $16.4B annual revenue in Australian specialist medical services Even 1% of uncollected specialist revenue represents $164 million Australia-wide. |
What This Means for an Individual Practice
The table below illustrates the estimated uncollected revenue for practices at different billing volumes, based on an average 12% revenue loss from claim errors, rejections, and unpaid workers compensation invoices.
| Annual billings | Estimated uncollected (12%) | Potentially recoverable* | Approx. recovery value |
| $300,000 | $36,000 | $18,000 – $25,000 | $18K – $25K |
| $500,000 | $60,000 | $30,000 – $42,000 | $30K – $42K |
| $750,000 | $90,000 | $45,000 – $63,000 | $45K – $63K |
| $1,000,000 | $120,000 | $60,000 – $84,000 | $60K – $84K |
| $1,500,000 | $180,000 | $90,000 – $126,000 | $90K – $126K |
* Recovery rate estimate of 50–70% of total uncollected revenue, based on claims that are genuinely pursuable — excluding legitimate write-offs and bulk-billing adjustments.
Where Revenue Is Being Lost
| Revenue loss cause | How it happens | Recoverable? |
| MBS claim rejections | Incorrect item numbers, missing referrals, duplicate billing flags | Yes — with correction and resubmission |
| Eclipse claim errors | Insurer-specific compliance issues, fee schedule mismatches | Yes — with expert review and resubmission |
| Workers comp aged debt | Insurer delays, disputed liability, documentation stalls | Yes — with specialist follow-up and escalation |
| Underpaid claims | Insurer pays less than the schedule fee without notification | Often yes — with audit and dispute lodgement |
| Stale / abandoned claims | Claims over 90 days written off without being properly pursued | Partially — depends on age and documentation |
Debtor Days — The Cash Flow Impact
Debtor days measures how long it takes a practice to collect money it is owed. Every day beyond the target range represents cash the practice has earned but not yet received.
| Claim type | Target debtor days | Typical actual | Gap |
| Medicare / MBS claims | 14 – 30 days | 14 – 45 days | Low – moderate |
| Eclipse / private health fund | 30 – 45 days | 30 – 60 days | Moderate |
| Workers compensation invoices | 30 – 45 days | 90 – 180+ days | High — significant cash flow impact |
| Disputed / aged workers comp | Should be actively pursued | Often written off | Revenue permanently lost |
How Virtually a Practice Recovers This Revenue
| 1 | Initial billing audit | Review of outstanding claims and aged receivables to identify recovery opportunities across MBS, Eclipse, and workers compensation. |
| 2 | Claim error rectification | Identification and correction of MBS and Eclipse errors — item numbers, referral requirements, compliance issues — and resubmission for payment. |
| 3 | Workers comp debt recovery | Pursuit of outstanding workers compensation invoices through insurer correspondence, dispute lodgement, and escalation — including aged and disputed debt. |
| 4 | Reporting & ongoing monitoring | Monthly reporting on claim and recovery status, with ongoing monitoring to prevent future revenue leakage (retainer clients). |
| No recovery, no fee Percentage fees only charged on monies collected. | $500 engagement fee Covers full audit and recovery plan preparation. | Low risk, high return Recovery typically far exceeds the cost of engagement. |
Virtually a Practice | virtuallyapractice.com
We offer a highly specialised service to collect outstanding medical claims to private health funds and third party providers, particularly workers compensation and transport accident claims.
Below is our standard rates for debtor collection. This can be a flexible arrangement to just bring you back to current debtors or ongoing maintenance of claims.
We look forward to serving your needs.
Schedule of Fees
MBS & Eclipse Claim Error Rectification | Workers Compensation Debt Recovery
All fees are success-based — you only pay when we recover money on your behalf. An engagement fee applies at the start of each new client relationship.
Engagement Fee
| Fee (excl. GST) | GST | |
| Initial engagement (all services) | $500.00 | $50.00 |
| Total on engagement | $550.00 | incl. GST |
Covers initial billing audit, account setup, claims review, and recovery plan preparation.
MBS & Eclipse Claim Error Rectification
| Claim age at engagement | Recovery fee (% of collected) |
| Under 90 days | 10% |
| 90 days to 12 months | 15% |
| Over 12 months / disputed | 20% |
Applicable to rejected, underpaid, or incorrectly processed MBS and Eclipse claims.
Workers Compensation Debt Collection
| Invoice age at engagement | Recovery fee (% of collected) |
| Under 90 days | 15% |
| 90 days to 12 months | 20% |
| Over 12 months / disputed | 25% |
Applicable to outstanding invoices owed by state and territory insurers, self-insurers, and scheme agents.
Optional Monthly Retainer — Ongoing Support
| Tier | Monthly fee (excl. GST) | Suited to |
| Standard | $500/month | 1–2 practitioners |
| Practice | $650/month | 3–5 practitioners |
| High volume / specialist | $800/month | 6+ practitioners |
Includes ongoing claim monitoring, billing compliance review, insurer correspondence, and monthly reporting. Charged independently of recovery fees.
| No recovery, no fee, Small monthly retainer. Percentage of collected revenue.. | GST applies to all fees All fees shown exclude GST unless stated. | Payment on collection Recovery fees invoiced after funds received. |