Let’s not sugarcoat it. Running a dermatology practice today is harder than it used to be.

You are expected to be a world-class clinician, a business owner, a hiring manager, a tech support line, and a billing expert all at the same time. The front desk is juggling phone calls, insurance rules keep changing, and getting claims paid feels like a battle that never ends.

In the middle of that chaos, it is easy to assume everything is running smoothly. The schedule is full. Revenue is coming in. But here is the problem. Many practices are quietly losing money every single day. Not because someone made a major mistake, but because no one is catching the smaller ones.

That is exactly why we created the Revenue Potential Calculator.

This free tool gives you a quick and realistic look at how much revenue your practice might be missing. You enter your annual gross charges and your current net collection rate. The calculator shows you what your numbers could look like with stronger collections, better processes, and cleaner claims.

It is built specifically for dermatology, and it is designed to help you take the guesswork out of your revenue cycle.

In the rest of this article, we will walk through where money typically slips through the cracks, which KPIs you should be watching, and how even small changes in billing performance can have a big impact on your bottom line.

Where Most Practices Lose Revenue

Revenue loss in dermatology rarely comes from one big problem. It’s usually the result of small issues that pile up over time. A missed code here. A late claim there. And before you know it, you’re losing 5 to 10 percent of your gross revenue every year.

Here are five of the most common places where we see money slip through the cracks:

1. Incomplete or inaccurate coding

Dermatology coding is detailed and specific. If modifiers are missing, codes are outdated, or visits are under-documented, you can expect denials or reduced payments. Even minor mistakes have a domino effect on your revenue cycle.

2. Weak follow-up on denials or underpayments

Denied claims that sit untouched or underpaid claims that go unchallenged are often written off as lost revenue. Most in-house teams are stretched too thin to follow up thoroughly, especially when systems are clunky or outdated.

3. High patient A/R and poor collections processes

If your patient A/R is growing, take a closer look at how balances are communicated. Vague or delayed statements, unclear language, and lack of follow-up often lead to unpaid bills. Patients are more likely to pay when they understand what they owe and why.

4. Delayed or inconsistent claim submission

Submitting claims in large batches or waiting several days to send them out slows down cash flow. It also increases the risk of timely filing denials, especially when staff turnover or system errors cause delays.

5. Inefficient billing staff or offshore vendors

It may seem more affordable to handle billing in-house or to outsource overseas. But if the people handling your claims aren’t trained in dermatology billing, the losses will show up fast. Poor documentation, missed charges, and weak appeals are common when billing isn’t specialized.

Individually, these problems may not seem urgent. But together, they create a slow drip that can quietly drain hundreds of thousands of dollars in revenue over time.

We can help your dermatology practice streamline medical billing and reduce denials by optimizing billing codes, verifying patients’ insurance coverage, and ensuring correct coding for procedures like biopsy, excision, and Mohs surgery.

The 8% Gap: What It Really Means

Most dermatology practices collect about 90 percent of their gross charges. That might sound acceptable, especially if the schedule is full and revenue feels steady.

But when you compare that to top-performing practices collecting 97 to 99 percent, the gap becomes impossible to ignore.

That missing 8 percent isn’t just theoretical. It’s real money that you’ve already earned but haven’t collected.

Let’s look at the numbers.

According to FTI Consulting, medical dermatology practices generate around $1.3 million in annual revenue per full-time physician. For cosmetic-focused practices, that figure can be as high as $1.8 million or more.

If you’re a two-provider medical dermatology practice generating $2.6 million per year in gross charges, collecting at 90 percent brings in $2.34 million.

But collecting at 98 percent brings in $2.55 million. That’s a difference of $210,000 per year.

Even a modest improvement to 95 percent could mean an additional $130,000 annually, without seeing more patients or adding new services.

And this is based on mid-range numbers. Practices with cosmetic services, in-house pathology, or high-volume procedures could be leaving even more on the table.

What Could That Recovered Revenue Do?

When collections improve, you are not just fixing your billing process. You are creating room to grow without seeing more patients, adding hours, or stretching your staff thin.

That recovered revenue can be used in practical, meaningful ways. Some practices use it to hire a new provider or extender. Others invest in better EHR systems or billing platforms to improve daily efficiency. It can also support expanded cosmetic services, the opening of a new location, or a stronger digital presence to attract and retain patients.

You might even reinvest in your current team, offering raises or bonuses that boost morale and reduce turnover.

You do not need to change your services or increase your patient volume to create financial stability. You just need to collect what you have already earned.

The 3 KPIs Every Dermatology Practice Should Track

You don’t need a finance degree to know if your billing is working. But you do need to look at the right numbers. These are the metrics that tell the truth, whether things are running smoothly or falling apart behind the scenes.

Here are the three key performance indicators every dermatology practice should be tracking:

1. Net Collection Rate

This is the single most important number in your billing cycle. It tells you how much of your collectible revenue you are actually getting paid. Not billed, not charged — paid. A strong dermatology practice should be collecting at least 97 percent. Anything lower usually means money is being lost to denials, underpayments, or poor follow-up.

2. Accounts Receivable Over 90 Days

When money sits too long, it becomes harder to collect. A/R over 90 days should stay below 10 to 15% of your total receivables. If you are seeing higher numbers here, you probably have breakdowns in your follow-up process, aging patient balances, or claims that are going untouched.

3. Net Revenue Per Visit

This one helps normalize your numbers. Even if your schedule is packed, you still need to know what each visit is bringing in. A dip in net revenue per visit can signal coding problems, fee schedule issues, or overuse of low-paying visit types. It shows whether you are being properly reimbursed for the care you are delivering or if you are working harder for less money.

If you are not reviewing these numbers monthly, or at least quarterly, you are flying blind.

Billing Isn’t Just Admin. It’s a Growth Lever.

Too many practices treat billing like an afterthought. It is something to outsource, hand off, or ignore until there is a problem.

But billing is not just back-office busywork. It is strategic. It directly impacts how you grow, what you invest in, and whether you stay financially strong enough to remain independent.

When collections are inconsistent or underperforming, everything gets tighter. Hiring becomes harder. Budgets shrink. Provider stress goes up. Leadership starts making decisions based on what’s affordable instead of what’s best for the practice.

Improving billing performance is not about hovering over your staff or micromanaging every claim. It is about knowing what the numbers are telling you and making decisions with real data behind them.

When your billing system is strong, it supports every part of your practice. When it is weak, it quietly drains opportunity from every direction.

Use Our Free Revenue Calculator to See What You’re Missing

We created the Revenue Potential Calculator to help dermatology practices get a clearer picture of what their billing performance might be costing them.

It takes less than a minute. You enter two simple numbers:

• Your annual gross charges
• Your current net collection rate

And it shows you:

• What your annual revenue could look like at 95%, 97.5%, and 99% collection rates
• How much additional revenue could be recovered with a 5%, 10%, or 15% boost in billing efficiency

This tool is designed to highlight opportunity. It does not factor in variables like payer mix, fee schedules, or your contracted billing rates. So while it is not a full financial forecast, it gives you a conservative estimate based on industry benchmarks.

You can try it for free here:

https://dermatologybilling.com/revenue-calculator/

For many practices, the numbers are more than surprising. They are a wake-up call.

Inga Ellzey Billing Services enhances transparency in pricing and reimbursement rates, minimizing billing errors to boost productivity and patient satisfaction

What Could Recovered Revenue Do For You?

This isn’t just about increasing collections. It’s about what that additional revenue allows you to do once you have it.

With even a modest improvement in billing performance, you could:

• Invest in staff training or certification to strengthen your team
• Add in-demand services like Mohs, photodynamic therapy, or patch testing
• Expand your online presence and improve your marketing reach
• Upgrade systems to improve scheduling, billing, and the patient experience
• Build more flexibility into physician schedules without sacrificing revenue
• Fund a year-end bonus program that keeps your team engaged and appreciated

These are not just ideas. They are outcomes we have seen in practices that made small but intentional improvements to their billing process. The extra revenue is often enough to change how the entire practice operates.

You Don’t Have to Figure This Out Alone

Whether you are collecting at 90%, 93%, or already above 95%, there is always room to improve.

At Inga Ellzey Billing Companies, we have helped hundreds of dermatology practices increase collections, lower A/R, and recover lost revenue without increasing patient volume or adding extra hours.

Dermatology billing is all we do. We understand the codes, the modifiers, the procedures, and the bottlenecks that get in the way of correct coding. Our goal is not to replace your team. It is to support them. Billing should be a reliable driver of growth, not an unpredictable problem to manage.

If you are curious about what kind of improvement is possible, we can take a closer look at your top Current Procedural Terminology (CPT) codes, your payer mix, and your current workflows. That alone often reveals more opportunity than most practices expect.

No pressure. No sales script. Just honest insight from people who know dermatology billing inside and out.