Tracking Key Performance Indicators For Your Practice

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Tracking Key Performance Indicators For Your
Practice
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Tracking Key Performance Indicators For Your
Practice
Medical billing is a tough task. It requires
specialty-wise billing coding expertise and
also consumes a lot of time. Even though you have
a team of expert billers and coders, it doesnt
ensure you are getting accurate reimbursements
from insurance carriers and patients. Tracking
key performance indicators will help you to
understand what mistakes you are making and areas
for improvement. In this article, we discussed 7
such important key performance indicators which
will help to track the financial performance of
your practice. AR older than 30 days As the name
suggests Accounts Receivable (A/R) days measure
how long it takes for a service to be paid by the
payer or patient. This parameter indicates the
efficiency and effectiveness of your billing team
and their ability to collect accurate
reimbursements in a timely manner. When you
submit a claim ideally you should get paid within
30 days, provided you are submitting claims
electronically. Any claim which is not paid for
more than 30 days needs attention. Unpaid claims
after 30 days are either denied or payment status
pending from payers. Most practices consider AR
above 60 days as a key performance indicator but
we suggest starting working on unpaid claims
right after 30 days of submitting them. With
claims submitted and providers paying
electronically, 30 days is a good time span for
any claim to get paid.
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Tracking Key Performance Indicators For Your
Practice

• Net Collection Percentage
• This indicator shows your ability to collect
  accurate reimbursements from payers as well as
  patients. For Net Collection Percentage (NCR) use
  formula, NCR (Total collections/ (charges-
  contractual adjustments) 100. Practices
  calculate their NCR to see how much revenue is
  lost due to factors such as uncollectible debt,
  or other non-contractual adjustments. If your NCR
  is lower than 90-100 percent after write-offs,
  you should consider an internal audit of billing
  practices.
• POS Collection
• Point of Service (POS) collection represents how
  effectively you are collecting patient
  responsibility. This parameter is becoming more
  important as more and more patients are choosing
  high deductibles health plans (HDHP). Your front
  desk team should know the exact patient
  responsibility at the time of patient visits.
  They should know co-payment deductibles amounts
  and must have an insurance coverage report handy
  along with them. To increase POS collections, you
  must share estimates with patients prior to their
  visit along with insurance coverage and patient
  responsibility. A well-informed patient at the
  time of visit is more likely to make payment at
  the time of visit. Its an important parameter
  because a huge cost is involved in the recovery
  of that payments if these are not collected at
  the time of visit. You can use a simple formula,
  (amount collected at POS/ total patient
  responsibility) 100.

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Tracking Key Performance Indicators For Your
Practice
Clean Claim Rate A clean claim rate is one of the
basic parameters which directly measure the
ability of your billing team. When you submit a
claim, you have to enter a lot of details like
patient information, insurance information,
diagnosis codes, procedure codes, modifiers,
rendering provider information, billing
information, and others. Any wrong or outdated
information will result in claim rejection. Claim
rejection means the payer has not even started to
process your claim due to wrong information. You
need to correct the information for payers to
process it. As per industry standards, the clean
claim rate must be more than 95 percent. If you
are not achieving more than 90 percent of the
claim rate then you must work on the billing
process to improve them on priority. To get clean
claim rate use the formula ((total submitted
claims rejected claim)/ total submitted
claims)) 100, for a specific time (i.e., a
month). Cost to Collect As mentioned in the POS
collections parameter, if you fail to collect any
amount at the time of visit, the cost associated
to collect the pending amount increases every
day. To collect pending patient responsibility,
you need to send them invoices, reminders,
emails, call patients. All these activities take
a lot of time for your team resulting in a huge
cost. The same thing applies to collecting
pending insurance payments you need to track
every single claim, need rework and resubmit
denied/rejected claims, talk to an insurance rep
for any resolution. All these activities cost
huge as an additional team member might require
to handle these responsibilities.
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Tracking Key Performance Indicators For Your
Practice
Denied Claim Rate Claim denials are direct
indicators of the efficiency of your medical
billing team. Denied claim more than 20 percent
is a sign of wrong billing practices or
inefficient biller or coder. As discussed above,
there is a huge amount of cost associated with
recovering denied payments. For efficient billing
operations, you need to track every single
submitted claim and mark claims as paid,
partially paid, denied, rejected, and under
process. To calculate your denied claim rate,
divide the number of claims denied by the total
number submitted. Bad Debts You can measure the
effectiveness of collection efforts through the
Bad Debt value. It will help you to understand
the exact amount you have written off due to the
inability to collect reimbursements. You can
simply divide the total collected amount by the
total allowable charges for the specific time
period. You can review bad debts quarterly, and
can adjust your collection efforts
accordingly. Even though your prime focus is
inpatient care, tracking key performance
indicators ensure financial stability for
practice. If you are tracking these parameters
regularly and correcting billing activities, you
will realize a steady flow of reimbursements
without much input from the billing team on daily
basis. If you dont have a billing team or if you
are doing billing all by yourself, then we can
assist you in billing and tracking all these KPIs
for your practice. Medisys Data Solutions is a
leading medical billing company providing
specialty-wise billing and coding services. Apart
from complete billing and coding services, we
also share customized billing reports to measure
all these KPIs for your practice. To know more
about our billing and coding services, contact us
at info_at_medisysdata.com/ 302-261-9187
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