By routinely monitoring your medical billing metrics you can ensure that the practice is collecting what it’s owed. 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. Since each medical practice’s fee schedules, payer mix, and contracts vary, your gross collection rate also will be different. The “Gross Collections Rate” tells you the percentage you collected of what you billed. A billing KPI serves a number of purposes in terms of healthcare organization success: They help recognize key success drivers. The total number of claims denied divided by the aggregate number of claims remitted gives Claim Denial rate. 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. KPI Industry norm OMG (‘Oh, my gosh!’) DRO: 40 to 45 65 A/R over 120: <12 percent 20% 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. 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. This metric should be reviewed every month to make sure you aren’t experiencing blockage in money being paid. Net Collection Rate – This metric is a measure of a practice’s effectiveness in collecting all legitimate reimbursement. 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? Percentage of A/R Over 60 Days = Total Balance Aged Greater Than 60 Days / Total A/R Balance for All Ages, Days in AR = Total AR / Average Daily Charges (90-day average), Collections Per Visit = Total Reimbursements / Total Visits (for a specific time period), FPRR = # of Claims Paid on First Pass / Total # of Claims Submitted (for a specific time period), GCR = Total Payments / Charges *100% (for a specific time period), NCR = (Payments / (Charges – Contractual Adjustments)) * 100%, Contractual Variance = Contracted Rate (based on your fee schedule) Minus the ERA Allowed Amount. With Kareo, you get simple solutions for every part of your practice—from scheduling and charting to billing and collections. KPI’s for Medical Practice Management. Medical Billing Metrics You MUST Know for 2016 - Medical Billing. Billing best practices dashboard: 11 metrics to know Ellie Rizzo - Wednesday, August 6th, 2014 Print | Email Here are the most important best-practice benchmarks that every ASC should keep in mind , says by Ann Geier, vice president of clinical informatics at SourceMedical's National Client Meeting in Oak Brook, Ill., on July 24: Build a custom tailored solution that fits your practice’s needs. Our solutions enable fantastic financial outcomes for medical and dental organizations nationwide. Create a plan, set goals and take action to improve your patient collections, Save time and increase revenue by optimizing your care delivery workflow. 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. NCR: 96 to 98% 90% 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. 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. 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. Fixing the problems 5 KPI Metrics for the Healthcare Business Dashboard. By tracking and comparing Key Performance Indicators (KPI) are metrics that quantify the success of one’s performance in comparison to measureable business objectives. Your first pass resolution rate (FPRR) is the percentage of claims that are paid after being submitted a single time. It’s often used to see how much revenue is lost due to factors like uncollectible debt, untimely filing, and other non-contractual adjustments. Still not finding what you’re looking for? 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. Encourage collections at the time of service, focus efforts on identifying and reducing denials, and work accounts fully every 60 days. Know the medical billing metrics you need to manage the business of your practice. 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. Unfortunately, not every bill gets paid. This can be affected by how your biller submits the claim among other reasons. Keep a tight rein on credits; use the 60-day mark for getting those processed back to the correct party. Monitoring your practice’s financial performance while providing exceptional patient care is vital to your medical group’s success. This easy-to-calculate metric reflects how effective your practice is in collecting the reimbursement you are allowed. Ultimately, that’s the goal of the key performance indicators – not to judge, but to improve. Get a better understanding of your revenue cycle through analysis driven by medical billing metrics. Furthermore, if your rate is too good to be true, it probably is. Although you can determine the average daily charge based on 365 days, using 90 days accounts for seasonality, growth and other fluctuations in business. Don’t be misled. This metric can be used to compare with practices with similar: specialty, location, and clinical personnel. Many of these metrics are actually specific key performance indicators for hospitals.. Secondly, what is GCR in medical billing? 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. Total number of claims denied divided by the aggregate number of claims remitted gives Claim Denial rate. 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. 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. This KPI is used to determine the efficiency of your RCM process. The same factors cited above for DRO may positively – or negatively – impact your ability to beat or fall short of the 12 percent range. 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. This is the actual scorecard with Medical Dashboard and performance indicators. Here’s what to do with the knowledge you gain by monitoring key performance indicators: 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. Your guide to exceeding a 95% clean claims rate and speeding up insurance payments. 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. In this manner, what is KPI in healthcare? If your NCR is lower than 90-100% after write-offs, you should consider an audit of billing practices. That’s why identifying and monitoring key performance indicators for medical billing is critical. We’ll take care of your business, so you can take care of your patients. A healthcare KPI, or metric, is a type of performance measurement that helps you understand how your healthcare organization or department is performing. A 100 percent net collection rate would be ideal, but the range to look for is 96 to 98 percent. If your staff incorrectly categorizes the adjustment as a contractual adjustment, then neither the payment nor the allowable are included in the rate. Monitoring all of the key performance indicators together – and doing so weekly, or even daily – means there is nowhere for poor financial performance to hide. However, this doesn’t tell yo… 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. Whether it’s a hospital, a private healthcare provider, a pharmaceutical company or an insurer, a business dashboard can help any organization in the healthcare industry stay on a forward-moving trajectory. KPI Library is a community for performance management professionals. Although payment plans may be a necessity of your patient collections process, categorize them with a different payer class. Although cash can’t be benchmarked, you can ensure that its flow is the same as – or better than – the previous time period. With the advent of practice management software, there is no limit to the data your practice can measure. 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 Cash. Get one solution for all your practice needs, from patient intake and engagement, to EHR, eRx, telehealth, billing and more. Divide that figure by your average daily charge. 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. Verify insurance before patients present, and don’t forget to check coverage on hospital and other non-office services. You can improve DRO results through robust time-of-service collections, including collection of copayments, coinsurance, unmet deductibles and pre-service deposits. Net collection rate. Don’t allow too many excuses. Use automation. Metrics for Medical Estimation. Receivables outstanding over 120 days. •Denial Reasons give you an explanation for COVID-19 Telehealth Coding & Billing Guide. Medical Devices; Medical Devices; For Fire . The influence of automation can’t be overstated. 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. Of each dollar you’re allowed to collect, what percentage of it do you actually collect? For more information and ideas about how metrics, dashboards and appointments have changed, join Nate Moore’s session, “Rethinking Metrics, Dashboards and Appointments After COVID-19,” at the Medical Practice Excellence Conference , Oct. … 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. What are Your Rejections and Denials Trying to Tell You? Medical necessity pass rate— rate of acceptance of claims with medical necessity content. Tell us about yourself and a Kareo Solutions Consultant will contact you shortly. MAP Keys are industry-standard metrics or KPIs used to track your organization’s revenue cycle performance using objective, consistent calculations. 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. Getting Paid in 2020: What Independent Medical Practices Need to Know. 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. Improper submission of a claim can still be paid, but there is a chance that it will be underpaid. Here's a quick overview of changes in CMS programs, insurance plans and patient payments. Claim denial rate is the percentage of claims denied. (Adjusting for credits is important, as credits offset receivables, thus masking performance.) However, once initiating the measurement process for KPIs, I feel confident you will gain information to modify the KPI … 7 KPI #1 - Clean Claim Rate ... • Medical Necessity ... 04/20/15 Billing Summit 2015. 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. (As noted above, be sure to exclude the credits when analyzing the amount of accounts receivables over 120 days.) But according to Becker’s Healthcare, too many healthcare professionals only track what they bill. Choosing an EHR for your small practice is a big decision. Accounts receivable (A/R) measures how long it takes for a service to be paid. Medical Billing Metrics, or Key Performance Indicators (KPIs) help practices understand their revenue cycle and provide insights to increase collections. This case study is a process definition for a Billing Process, adapted from a real freight business. You will be able to determine which appointments are most profitable, allowing you to accept more of these appointment types using this formula. They are provided below in some of the examples. Single data points without comparison don’t tell much of a story! Our unique combination of deep industry expertise, robust operational capability and client-focused service significantly improves the efficiency and profitability of healthcare organizations. Such a trend should be examined further to determine the cause (s). Tracking the actual dollar amount that your practice receives keeps you abreast of your billing practice’s health and growth. Build a customized solution for your practice. Deciding exactly what reports and statistics are the most meaningful is important. 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. KPI Industry norm OMG (‘Oh, my gosh!’) •Examine reasons for insurance denials. 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. A low denial rate means good cash flow. For example, if the allowable for USA Insurance is $56.40 for a 99212, did you collect all of that money? 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. Developing a dashboard of key performance indicators can maintain your focus on success. Insurance verification and timely, clean charges contribute to success as well. TIP ICD-10 ICD-10 KPIs at a Glance Now that you’ve made the switch to ICD-10, you can look for opportunities to analyze your progress. Let’s say you contract with USA Insurance for $56.40 for a 99212. If your practice struggles with a low FPRR, focus on insurance verification, billing, and coding to create a more effective RCM. 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. One way to start thinking about goal setting for your business is by making sure you're tracking the right metrics. Assume that the claim is denied due to untimely filing, which is a non-contractual adjustment. How to use KPI's for your Medical Practice's Financial Success Published on September 18, 2017 September 18, 2017 • 50 Likes • 11 Comments 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. Without a doubt, the best overall indicator of billing performance, DRO must be measured consistently in order to be meaningful. 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. 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 … You’ll also want to keep in mind that cash may vary from week to week (or day to day). Calculate DRO by adding your current total receivables outstanding and the sum of your credit balances. Knowing your days in A/R is vital for understanding your budget and determining when you have the funds to pay for operating expenses. Classify these accounts separately, and report your DRO and receivables over 120 percent with – and without – payment plans. 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. 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. For net collection, investigate staff performance and office policies when it hits 90 percent or lower. There are a couple ways to measure what you’re taking in. It shows the steps for not only improving a business process, but using the process to identify both Process Result and In-Process measures. A/R over 120: <12 percent 20% They prioritize resources. ©Copyright 2021 Kareo, Inc. All rights reserved. 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. 18 KPI #3 - Denials by Procedure Code •HIPAA EDI ANSI Standard Codes. However, a higher rate does not necessarily mean your practice makes more money. Instead, focus on the net – also known as ‘adjusted’ – collection rate. This metric highlights the effectiveness and efficiency of your billing operations in getting you paid as quickly as possible. Claims denial rate is derived as a percentage of claims denied. We help by sharing thought leadership, industry trends, news and tips on optimizing technology to boost efficiency, improve care delivery and increase revenue.