Don’t allow too many excuses. Revenue cycle KPIs are essential for understanding the health of your practice. 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. Once the car’s wheels go off the paved highway, it’s not too long before you are in a ditch, financially speaking. 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. ©Copyright 2021 Kareo, Inc. All rights reserved. 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. Use KPI Library to search for Key Performance Indicators by process and industry, ask help or advice, and read articles written by independent experts. Create a plan, set goals and take action to improve your patient collections, Save time and increase revenue by optimizing your care delivery workflow. Think of the practice evaluation as … Divide that figure by your average daily charge. Single data points without comparison don’t tell much of a story! Getting Paid in 2020: What Independent Medical Practices Need to Know. If your staff incorrectly categorizes the adjustment as a contractual adjustment, then neither the payment nor the allowable are included in the rate. Our solutions enable fantastic financial outcomes for medical and dental organizations nationwide. Improve your cash flow by automating insurance coverage and benefits eligibility verification, charge scrubbing, electronic remittance, funds transfer, remote deposit and the many other technological tools available to the medical billing industry. COVID-19 Telehealth Coding & Billing Guide. Developing a dashboard of key performance indicators can maintain your focus on success. 18 KPI #3 - Denials by Procedure Code •HIPAA EDI ANSI Standard Codes. With Kareo, you get simple solutions for every part of your practice—from scheduling and charting to billing and collections. Calculate DRO by adding your current total receivables outstanding and the sum of your credit balances. Know the medical billing metrics you need to manage the business of your practice. Despite the obstacles, you have to be on top of your game to ensure that collections are optimized. The last, but certainly not least, key performance indicator is measuring collections on a weekly, if not daily, basis. 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. 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. MAP Keys are industry-standard metrics or KPIs used to track your organization’s revenue cycle performance using objective, consistent calculations. Worse, it will give you an inaccurate snapshot of the health of your operations. 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. 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. Classify these accounts separately, and report your DRO and receivables over 120 percent with – and without – payment plans. Enter your email address to receive "Go Practice" as an email newsletter. Unfortunately, not every bill gets paid. Receivables outstanding over 120 days. Without a doubt, the best overall indicator of billing performance, DRO must be measured consistently in order to be meaningful. 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. industry metrics that I feel are relative during the course of my 20+ year career in medical billing. Practices calculate their NCR to see how much revenue is lost due to factors such as uncollectible debt, or other non-contractual adjustments. KPI #1 - Clean Claim Rate. A "sweet spot" to target is 45 days overall, 18 days for Medicare, and up to 55 days for workers' compensation. 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. 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. How to use KPI's for your Medical Practice's Financial Success Published on September 18, 2017 September 18, 2017 • 50 Likes • 11 Comments This can be affected by how your biller submits the claim among other reasons. For net collection, investigate staff performance and office policies when it hits 90 percent or lower. 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. Consider these key performance indicators to establish the framework for your dashboard. Verify insurance before patients present, and don’t forget to check coverage on hospital and other non-office services. The “Gross Collections Rate” tells you the percentage you collected of what you billed. 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. 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. When it comes to medical billing, you may not need to fully understand CPT code assignment, diagnosis code nuances or clean claim filing parameters. Cash. A low denial rate means good cash flow. Tell us about yourself and a Kareo Solutions Consultant will contact you shortly. Medical Devices; Medical Devices; For Fire . 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. Don’t bury payment plans in the middle of your patient receivables. Days in receivables outstanding (DRO). 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. Look out for blog posts and resources from Kareo in your inbox. 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. KPI Industry norm OMG (‘Oh, my gosh!’) Contractual Variance is the amount you are receiving below the amount you contracted with your payers. PE for healthcare’s complementary practice evaluation will give you access to accurate metrics using KPI’s. They set those drivers (or goals) through benchmarking – against company historical data and compared to other groups in your specialty. 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. This KPI is used to determine the efficiency of your RCM process. Ultimately, that’s the goal of the key performance indicators – not to judge, but to improve. NCR: 96 to 98% 90% 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. 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. Your first pass resolution rate (FPRR) is the percentage of claims that are paid after being submitted a single time. Assume that the claim is denied due to untimely filing, which is a non-contractual adjustment. 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. KPI’s for Medical Practice Management. If your practice struggles with a low FPRR, focus on insurance verification, billing, and coding to create a more effective RCM. You can improve DRO results through robust time-of-service collections, including collection of copayments, coinsurance, unmet deductibles and pre-service deposits. 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 … Here's a quick overview of changes in CMS programs, insurance plans and patient payments. Carrying credits masks your true performance, making it look much better than it really is. 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. Key Performance Indicators (KPI) are metrics that quantify the success of one’s performance in comparison to measureable business objectives. 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. 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. Although cash can’t be benchmarked, you can ensure that its flow is the same as – or better than – the previous time period. 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. Don’t be misled. Insurance verification and timely, clean charges contribute to success as well. However, this doesn’t tell yo… 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. This metric should be reviewed every month to make sure you aren’t experiencing blockage in money being paid. 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. 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. © Copyright 2020 Kareo, Inc. All rights reserved. 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. … You will be able to determine which appointments are most profitable, allowing you to accept more of these appointment types using this formula. 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. (As noted above, be sure to exclude the credits when analyzing the amount of accounts receivables over 120 days.) 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. Shoot for less than 12 percent being over 120 days. You simply can’t get better until you know where improvement is needed. It’s often used to see how much revenue is lost due to factors like uncollectible debt, untimely filing, and other non-contractual adjustments. Get the latest guidance on telehealth, coding and billing for COVID-19. This metric highlights the effectiveness and efficiency of your billing operations in getting you paid as quickly as possible. Accounts receivable (A/R) measures how long it takes for a service to be paid. KPI Library is a community for performance management professionals. 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: However, once initiating the measurement process for KPIs, I feel confident you will gain information to modify the KPI … Medical Billing Metrics, or Key Performance Indicators (KPIs) help practices understand their revenue cycle and provide insights to increase collections. Overview; ... Track These Metrics to Improve EMS Billing Efficiency. Let’s say you contract with USA Insurance for $56.40 for a 99212. Knowing your days in A/R is vital for understanding your budget and determining when you have the funds to pay for operating expenses. Medical necessity pass rate— rate of acceptance of claims with medical necessity content. Instead, focus on the net – also known as ‘adjusted’ – collection rate. There are a couple ways to measure what you’re taking in. Net Collection Rate – This metric is a measure of a practice’s effectiveness in collecting all legitimate reimbursement. Net collection rate. Monitoring your practice’s financial performance while providing exceptional patient care is vital to your medical group’s success. You can calculate your average daily charge by taking the previous three months’ worth of charges, and dividing by 90. 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. In this manner, what is KPI in healthcare? The total number of claims denied divided by the aggregate number of claims remitted gives Claim Denial rate. If your NCR is lower than 90-100% after write-offs, you should consider an audit of billing practices. The key is to choose a category – and stick to it. 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. Although payment plans may be a necessity of your patient collections process, categorize them with a different payer class. This easy-to-calculate metric reflects how effective your practice is in collecting the reimbursement you are allowed. Click to see full answer. Although you can determine the average daily charge based on 365 days, using 90 days accounts for seasonality, growth and other fluctuations in business. Still not finding what you’re looking for? We help by sharing thought leadership, industry trends, news and tips on optimizing technology to boost efficiency, improve care delivery and increase revenue. 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. For example, if the allowable for USA Insurance is $56.40 for a 99212, did you collect all of that money? It shows the steps for not only improving a business process, but using the process to identify both Process Result and In-Process measures. 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? A 100 percent net collection rate would be ideal, but the range to look for is 96 to 98 percent. (Adjusting for credits is important, as credits offset receivables, thus masking performance.) Total number of claims denied divided by the aggregate number of claims remitted gives Claim Denial rate. Elizabeth Woodcock, MBA, FACMPE, CPC is a professional speaker, trainer and author specializing in medical practice management. A healthcare KPI, or metric, is a type of performance measurement that helps you understand how your healthcare organization or department is performing. That’s why identifying and monitoring key performance indicators for medical billing is critical. Claim denial rate is the percentage of claims denied. 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. Keep a tight rein on credits; use the 60-day mark for getting those processed back to the correct party. But according to Becker’s Healthcare, too many healthcare professionals only track what they bill. 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. You’ll also want to keep in mind that cash may vary from week to week (or day to day). Tracking the actual dollar amount that your practice receives keeps you abreast of your billing practice’s health and growth. Claims denial rate is derived as a percentage of claims denied. 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. 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. 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. … 7 KPI #1 - Clean Claim Rate ... • Medical Necessity ... 04/20/15 Billing Summit 2015. 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% Improper submission of a claim can still be paid, but there is a chance that it will be underpaid. Of each dollar you’re allowed to collect, what percentage of it do you actually collect? By tracking and comparing In today’s challenging reimbursement era, there seems to be no end in sight to the complexities of medical billing. Our unique combination of deep industry expertise, robust operational capability and client-focused service significantly improves the efficiency and profitability of healthcare organizations. •Examine reasons for insurance denials. Here’s what to do with the knowledge you gain by monitoring key performance indicators: 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. This metric can be used to compare with practices with similar: specialty, location, and clinical personnel. Build a custom tailored solution that fits your practice’s needs. DRO: 40 to 45 65 This metric tells you how effective your revenue cycle management (RCM) process is. They prioritize resources. Encourage collections at the time of service, focus efforts on identifying and reducing denials, and work accounts fully every 60 days. 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. However, a higher rate does not necessarily mean your practice makes more money. 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. Cash: $? Medical Billing Metrics You MUST Know for 2016 - Medical Billing. Tracking KPIs separately for each payer will assist in isolating the root cause of issues. Monitoring your practice’s financial performance while providing exceptional patient care is vital to your medical group’s success. , a higher rate does not necessarily mean your practice makes more money for less than 12 being. 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