Net Collection Rate – This metric is a measure of a practice’s effectiveness in collecting all legitimate reimbursement. In today’s challenging reimbursement era, there seems to be no end in sight to the complexities of medical billing. Your guide to exceeding a 95% clean claims rate and speeding up insurance payments. There are many ways to analyze medical billing and collections data but the following 7 KPIs are most closely correlated with your financial performance: A proactive approach to monitoring these metrics is to review them at month’s end and compare them to previous periods. Encourage collections at the time of service, focus efforts on identifying and reducing denials, and work accounts fully every 60 days. You’ll also want to keep in mind that cash may vary from week to week (or day to day). If your staff incorrectly categorizes the adjustment as a contractual adjustment, then neither the payment nor the allowable are included in the rate. It’s often used to see how much revenue is lost due to factors like uncollectible debt, untimely filing, and other non-contractual adjustments. If your practice struggles with a low FPRR, focus on insurance verification, billing, and coding to create a more effective RCM. Missing a timely filing deadline – and having to adjust off the expected money -- is one of those uncollectables that causes the net collection rate to dip below 100 percent, as it should. Consider these key performance indicators to establish the framework for your dashboard. Healthcare KPIs & Metrics (650) 469-1313 The key is to choose a category – and stick to it. A low denial rate means good cash flow. However, this doesn’t tell yo… Indeed, if you’re reporting 100 percent (or more), month after month, it may be a result of wide variability in productivity or revenue (and thus signal a potential need to redesign billing processes) - or it may be a function of how your staff is treating adjustments. Instead, focus on the net – also known as ‘adjusted’ – collection rate. You can and should use the same calculation for percentage over 90 and 120 days for total view of your A/R. Your first pass resolution rate (FPRR) is the percentage of claims that are paid after being submitted a single time. Days in receivables outstanding (DRO). This one-on-one demonstration will walk you through a day in the life of how a provider, office manager, or biller use Kareo to make their practice more productive. Medical Devices; Medical Devices; For Fire . Calculate DRO by adding your current total receivables outstanding and the sum of your credit balances. There are a couple of important factors to recognize: the two to four percent left on the table is bad debt, including monies you’ve written off to a collection agency and other uncollectables. Revenue cycle KPIs are essential for understanding the health of your practice. A healthcare KPI, or metric, is a type of performance measurement that helps you understand how your healthcare organization or department is performing. Although you can determine the average daily charge based on 365 days, using 90 days accounts for seasonality, growth and other fluctuations in business. These changes have spurred healthcare companies to look into new healthcare metrics—or key performance indicators (KPIs)—to decide if they are meeting these new standards. They prioritize resources. To keep it real (and thus, find opportunities to improve collections), you need to differentiate between contractual and non-contractual adjustments – and work on reducing the latter. Knowing your days in A/R is vital for understanding your budget and determining when you have the funds to pay for operating expenses. Tracking KPIs separately for each payer will assist in isolating the root cause of issues. In this manner, what is KPI in healthcare? The math required to calculate your medical billing metrics isn’t too complicated but you may need to drop your data to Excel if you don’t have Medusind as your medical billing company or you’re not using our powerful Medclarity platform. KPI #1 - Clean Claim Rate. However, once initiating the measurement process for KPIs, I feel confident you will gain information to modify the KPI … Ultimately, that’s the goal of the key performance indicators – not to judge, but to improve. Claims denial rate is derived as a percentage of claims denied. NCR:                          96 to 98%                                                    90% We help by sharing thought leadership, industry trends, news and tips on optimizing technology to boost efficiency, improve care delivery and increase revenue. Although payment plans may be a necessity of your patient collections process, categorize them with a different payer class. For the latter, even if the services have already been performed, you are better off identifying insurance problems before the claim is transmitted instead of 30 or 60 days later when the claim finally bounces back to you. There’s always plenty of work to do, but how do you know if your operation – and the staff you employ to carry out your game plan – is performing at full speed? Here's a quick overview of changes in CMS programs, insurance plans and patient payments. 5 KPI Metrics for the Healthcare Business Dashboard. Every practice will have a different GCR because each sets a unique fee schedule, therefore this metric is best monitored internally rather than compared with industry benchmarks or other practices. Since each medical practice’s fee schedules, payer mix, and contracts vary, your gross collection rate also will be different. Here are the industry benchmarks for medical billing DRO: High Performing Billing Department - 30 days or less Average Performing Billing Department - 40-50 days Below Average Performing Billing Department - 60 days or more In honor of National Pharmacist Day, which fell on Sunday, January 12... Before we know it, January will be here and with that comes a few of... A medical billing company’s activity consists of much more than... We'll email you expert insights and resources for growing your practice, improving clinical care and boosting revenue. PE for healthcare’s complementary practice evaluation will give you access to accurate metrics using KPI’s. Insurance verification and timely, clean charges contribute to success as well. Worse, it will give you an inaccurate snapshot of the health of your operations. Despite the obstacles, you have to be on top of your game to ensure that collections are optimized. This case study is a process definition for a Billing Process, adapted from a real freight business. Build a custom tailored solution that fits your practice’s needs. Practices calculate their NCR to see how much revenue is lost due to factors such as uncollectible debt, or other non-contractual adjustments. By routinely monitoring your medical billing metrics you can ensure that the practice is collecting what it’s owed. Although focusing on the ‘over 120 day’ category is recommended, you can certainly measure your success by evaluating the percent over (or under) any of the aging categories. Get a better understanding of your revenue cycle through analysis driven by medical billing metrics. Improper submission of a claim can still be paid, but there is a chance that it will be underpaid. You can calculate your average daily charge by taking the previous three months’ worth of charges, and dividing by 90. Our solutions enable fantastic financial outcomes for medical and dental organizations nationwide. A billing KPI serves a number of purposes in terms of healthcare organization success: They help recognize key success drivers. Such a trend should be examined further to determine the cause (s). What are Your Rejections and Denials Trying to Tell You? The last thing a medical practice needs is for patient visits to decrease and then have the billing office slow the revenue cycle down even further. You simply need a set of comparative metrics that allow you to monitor your performance and alert you to trends to help you adjust or respond to change in a … Whether your practice is using an outsourced medical billing provider or handling its billing and coding in-house, it’s always important to have a good idea of where your practice is doing well and where it can make improvements. Use automation. A high gross collection rate (GCR) indicates your fees are close to the payer’s rates, and how well your practice is doing at collections. Verify insurance before patients present, and don’t forget to check coverage on hospital and other non-office services. Monitoring your practice’s financial performance while providing exceptional patient care is vital to your medical group’s success. Create a plan, set goals and take action to improve your patient collections, Save time and increase revenue by optimizing your care delivery workflow. A 100 percent net collection rate would be ideal, but the range to look for is 96 to 98 percent. Key Performance Indicators (KPI) are metrics that quantify the success of one’s performance in comparison to measureable business objectives. Although it’s nice to measure your collections as a percent of gross charges (commonly referred to as the gross collection rate), you can’t use the result to judge the performance of your operation. This metric should be reviewed every month to make sure you aren’t experiencing blockage in money being paid. You may also want to consider outsourcing to a more efficient medical billing service! Think of the practice evaluation as … Your practice should have analytics that shows you where your expected payment amount per the fee schedule is less than what was received from the insurance company. That’s why identifying and monitoring key performance indicators for medical billing is critical. For this reason, recognize the upper limits – that is, the OMG (‘oh, my gosh,’ for my non-texting friends) factors: While underperforming at times on some or several of these indicators may be a fact of life in your situation, it pays to have a line in the sand that will signal you to dig deeper for opportunities to improve performance. Don’t bury payment plans in the middle of your patient receivables. This is the actual scorecard with Medical Dashboard and performance indicators. It may increase when new physicians and/or services are added or decrease if patients cancel procedures, physicians take time off or resign, or other events that may choke off cash. Assume that the claim is denied due to untimely filing, which is a non-contractual adjustment. This metric tells you how effective your revenue cycle management (RCM) process is. This easy-to-calculate metric reflects how effective your practice is in collecting the reimbursement you are allowed. DRO:                         40 to 45                                                      65 Organizations across the entire healthcare spectrum leverage our deep expertise and high-quality solutions to maximize revenue, reduce operating costs and navigate the changing healthcare landscape. This KPI is purely meant to evaluate whether the payer you are working with makes accurate reimbursements apart from adhering to the contract signed between you two. Let us show you how easy it is to write notes and prescriptions, code encounters, and manage patients in our fully integrated, cloud-based EHR. Unfortunately, not every bill gets paid. With Kareo, you get simple solutions for every part of your practice—from scheduling and charting to billing and collections. Net collection rate. Elizabeth Woodcock, MBA, FACMPE, CPC is a professional speaker, trainer and author specializing in medical practice management. Monthly Metrics * Review outstanding A/R (billed, value and days) * Review monthly production by doctor * Review denial activity during month * Review reverse aging of payments (track which billing month received payments pertain to) It is possible to run a thriving, financially strong medical practice. Knowing the amount you collect on an average visit is a good way to measure your practice against the industry standard and other same-specialty practices in your area. Look out for blog posts and resources from Kareo in your inbox. Claim denial rate is the percentage of claims denied. Talk to one of our solution consultants and learn how we can help make your practice a best practice! Total number of claims denied divided by the aggregate number of claims remitted gives Claim Denial rate. You’ll have to chase down that money from USA Insurance and, particularly in today’s consumer-directed health care era, from the guarantor, too. But according to Becker’s Healthcare, too many healthcare professionals only track what they bill. Your DRO should be in the range of 40 to 45 days, although there are several factors that may cause it to fall outside of this target. Writing off a bunch of uncollected money will certainly bring your DRO and percentage of receivables over 120 days into alignment with industry standards, but it won’t tell the whole story of your financial performance. If uncollectables are all written off as contractual adjustments, you’ll appear to be collecting 100 percent of the dollar – even when you’re really not. KPI Library is a community for performance management professionals. Tell us about yourself and a Kareo Solutions Consultant will contact you shortly. Fixing the problems As a result, the net collection rate reflects your ability to collect the contracted allowable rate, which is a combination of payments made from both the payer and the guarantor. Kareo is purpose-built for the workflows of the independent practice and patient, allowing you to efficiently manage all of the major functions of your practice. Once the car’s wheels go off the paved highway, it’s not too long before you are in a ditch, financially speaking. Single data points without comparison don’t tell much of a story! Carrying credits masks your true performance, making it look much better than it really is. •Examine reasons for insurance denials. MAP Keys are industry-standard metrics or KPIs used to track your organization’s revenue cycle performance using objective, consistent calculations. Cash:                         $? Cash. This metric measures the percentage of products in a company’s portfolio that are compliant with regulatory requirements set by the government including requirements such as establishment registration, medical device listing, premarket notification, investigational device exemption for clinical studies, quality system regulation, labeling requirements and medical device reporting. Accounts Receivable, medical billing and reimbursement, medical billing services, medical coding services, medical credentialing services, quality coding 0 If you are a medical practitioner are feeling overwhelmed adjusting with medical billing performance metrics the first thing to do right now is to focus on quality coding and track KPIs which will heavily impact your financial performance. Receivables outstanding over 120 days. Furthermore, if your rate is too good to be true, it probably is. KPI Industry norm OMG (‘Oh, my gosh!’) DRO: 40 to 45 65 A/R over 120: <12 percent 20% One way to start thinking about goal setting for your business is by making sure you're tracking the right metrics. Telehealth and Telemedicine Billing Service, Dental Insurance Eligibility Verification, Medusind is the Leading Technology Enabled RCM Provider. There are a couple ways to measure what you’re taking in. A healthcare KPI or metric is a well-defined performance measurement that is used to monitor, analyze and optimize all relevant healthcare processes to increase patient satisfaction. 10 Example Medical Marketing Key Performance Indicators (KPI's) Don't Confuse Medical Practices Goals with KPIs. Medical Billing Metrics You MUST Know for 2016 - Medical Billing. Medical necessity pass rate— rate of acceptance of claims with medical necessity content. Know the medical billing metrics you need to manage the business of your practice. How to use KPI's for your Medical Practice's Financial Success Published on September 18, 2017 September 18, 2017 • 50 Likes • 11 Comments Content and resources created by experts to help you optimize your practice, Navigate the world of quality payment programs and value-based reimbursement, Gain insights and discover trends to help you improve your practice, Get the maximum incentive available and avoid penalties by using our full-featured EHR. With the advent of practice management software, there is no limit to the data your practice can measure. Factors outside of your control, such as dealing with challenging payers like Workers’ Compensation and having a bevy of patients on payment plans, may lead to above-range DRO results, even if your operations are in order. Keep a tight rein on credits; use the 60-day mark for getting those processed back to the correct party. Falling within the industry norms on key measures should certainly be your goal, but it’s easy to be distracted by the multitude of external challenges that influence your performance. The “Gross Collections Rate” tells you the percentage you collected of what you billed. Many of these metrics are actually specific key performance indicators for hospitals.. Secondly, what is GCR in medical billing? Use KPI Library to search for Key Performance Indicators by process and industry, ask help or advice, and read articles written by independent experts. Contractual Variance is the amount you are receiving below the amount you contracted with your payers. 7 KPI #1 - Clean Claim Rate ... • Medical Necessity ... 04/20/15 Billing Summit 2015. Monitor the aged receivables sitting in your aged trial balance to determine if your efforts are paying off. This metric highlights the effectiveness and efficiency of your billing operations in getting you paid as quickly as possible. Click to see full answer. For net collection, investigate staff performance and office policies when it hits 90 percent or lower. Developing a dashboard of key performance indicators can maintain your focus on success. Monitoring your practice’s financial performance while providing exceptional patient care is vital to your medical group’s success. … For DRO, get nervous when it rises past 65 days; For receivables over 120 days, set the panic alarm to go off at 20 percent; and. Choosing an EHR for your small practice is a big decision. Divide that figure by your average daily charge. This KPI is used to determine the efficiency of your RCM process. Metrics for Medical Estimation. A significant sum of money over 60 days can signify charge lag issues, increase in rejections from the claim scrubber and first pass denials from the payer, bad write-offs/adjustment protocols or poor collections processes in general. Warning signs: An increase in this KPI compared to the benchmark means an ASC is likely dealing with payer delays, billing issues, and/or denials. ©Copyright 2021 Kareo, Inc. All rights reserved. Don’t allow too many excuses. Here are eight key performance indicators (KPIs) you can look at as you step up your game in 2020, and two ways to calculate them: by hand and with the TIMS Software reports you can run to even more quickly identify where your business stands. The total number of claims denied divided by the aggregate number of claims remitted gives Claim Denial rate. Obviously, you’d prefer to see that 100 percent of your receivables are under 120 days, but that’s unrealistic. This metric can be used to compare with practices with similar: specialty, location, and clinical personnel. Advice from RCM Expert Elizabeth Woodcock, E-Prescribing Option Helps With Medication Compliance and Patient Outcomes, Getting Paid in 2020: Steps to Take Now for a Smooth Transition to the New Year, How Billing Companies Benefit from Consolidating to One Platform. Shoot for less than 12 percent being over 120 days. Connect with us on social media for real-time updates: Please tell us more about yourself and we will show you how Kareo can help. Without a doubt, the best overall indicator of billing performance, DRO must be measured consistently in order to be meaningful. For example, if the allowable for USA Insurance is $56.40 for a 99212, did you collect all of that money? Build a customized solution for your practice. However, a higher rate does not necessarily mean your practice makes more money. Kareo’s integrated care delivery workflow optimizes the providers time and is surprisingly easy to use, Realize opportunities to maximize insurance reimbursements at each stage of the revenue cycle, End-to-end patient collections to increase revenue while maintaining positive patient relationships, Improve patient care and increase practice revenue with comprehensive patient experience, Kareo’s intuitive platform puts billing companies in control of their business and the practices they serve, Kareo has the tools and resources necessary to help you simplify the complexities of your practice, Kareo has refined our platform to help meet the needs of your Mental Health or Physical Therapy practice, Grow your practice and engage with patients, Designed for billers, trusted by practices, Billing experts help you collect more, faster, Care for patients using HIPAA-Compliant video, Clearly communicate patient responsibility, Transform data into revenue opportunities, Improve productivity with mobile simplicity, Applications and services from our partners. You simply can’t get better until you know where improvement is needed. KPI’s for Medical Practice Management. We’ll take care of your business, so you can take care of your patients. Still not finding what you’re looking for? KPI                            Industry norm                                   OMG (‘Oh, my gosh!’) Although cash can’t be benchmarked, you can ensure that its flow is the same as – or better than – the previous time period. There is a direct correlation of measuring key performance indicators ... One of the challenges to implementing KPIs is determining where to start and knowing what specific KPI measurements fit best within the billing department. Medical Billing Metrics, or Key Performance Indicators (KPIs) help practices understand their revenue cycle and provide insights to increase collections. Use these insights to increase collections and reduce time to payment. Our unique combination of deep industry expertise, robust operational capability and client-focused service significantly improves the efficiency and profitability of healthcare organizations. A/R over 120:             <12 percent                                                 20% While some percentage of the complaints that patients bring to your office will inevitably get better with the passage of time, the same cannot be said for medical billing financial performance. Deciding exactly what reports and statistics are the most meaningful is important. If your NCR is lower than 90-100% after write-offs, you should consider an audit of billing practices. The same factors cited above for DRO may positively – or negatively – impact your ability to beat or fall short of the 12 percent range. Overview; ... Track These Metrics to Improve EMS Billing Efficiency. industry metrics that I feel are relative during the course of my 20+ year career in medical billing. (As noted above, be sure to exclude the credits when analyzing the amount of accounts receivables over 120 days.) The last, but certainly not least, key performance indicator is measuring collections on a weekly, if not daily, basis. Obstacles, you get simple solutions for every part of your business, so you can that! Contract with USA insurance for $ 56.40 for a 99212 KPIs & metrics ( )! The Leading Technology Enabled RCM Provider you to accept more of these appointment types using this.! Indicators can maintain your focus on insurance verification and timely, clean charges contribute to success well. Be sure to exclude the credits when analyzing the amount of accounts over. Gross collections rate ” tells you how effective your practice struggles with a FPRR! Exactly what reports and statistics are the most meaningful is important, credits! 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