Measuring Your Medical Practice’s Success

We are at mid-year, and it is time to review your medical practice’s performance.  Many practice management systems have robust reporting packages to determine key performance indicators, which makes the Practice Manager’s job easier to measure the medical practice’s success.   What key performance indicators should we measure?  What do the reports tell us?  And, what can we do to improve deficient areas? 

The revenue cycle begins when the patient makes contact with your office to schedule the appointment, and does not end until the patient’s account has been settled.  The Practice Manager could measure a variety of key performance indicators during the entire revenue cycle management process.

As an example, the Practice Manager could review effectiveness of the revenue cycle’s “front end” process, such as:

  • Percentage of patients with insurance benefits verified prior to their appointment, which should be 98% or greater.  As a general rule, if the patient’s insurance has not been verified, the insurance payer might not pay for the visit.  Does your practice have a policy regarding patients being seen if their insurance benefits have not been verified?
  • Time of service collections, such as copayments and deductibles, which should be 100%.  What is your practice’s policy regarding the patient being seen if they cannot pay their copayment or deductible?
  • Error rate due to front-end billing issues, which should be less than 2%.  This could be incomplete demographic information your staff collected for the patient’s medical record.

The Practice Manager could then review those items pertaining to documenting patient care and processing the claim, such as:

  • Date of service to date of documentation, which should be completed within 24 hours of the patient’s appointment.  How do you discuss incomplete charting with your physicians and non-physician providers?
  • Date of documentation to date of coding, which should be completed within 48 hours.
  • Date of coding to date of charge entry, which should be completed within 48 hours.
  • Date of charge entry to date of claim released, which should be within 72 hours.

If you have providers that cannot complete their documentation in a timely manner or your billing staff is not processing the claim efficiently, then payment will be delayed.

 

The Practice Manager should also review those billing tasks that are part of the “back end” of the revenue cycle management process, such as:

  • Claims denied due to improper coding, which should be less than 2%.  Does your electronic medical record assign CPT codes and modifiers, as well as ICD-10 codes?  Do you have a Certified Professional Coder (CPC) review the codes prior to the claim being sent to the clearinghouse?
  • Number of claims pending an edit/suspense report, which should be less than 1%.
  • Statement release time based on determination of the patient’s financial responsibility, which should be within 24 hours.  Once the claim has been adjudicated and you know the patient has additional out of pocket costs, do you send the patient a statement within 24 hours?  How many times do you send a statement before deciding to send the account to collections, or write off the balance?
  • Lag time from receipt of payment to posting in the patient’s account, which should be completed the same day, but not more than 24 hours later.  What does your billing staff do if they receive an EOB with a “zero” payment?  Did you know that approximately 30% of claims are denied the first time the claim is sent to the insurance payer? 

The Practice Manager should be reviewing the following key performance indicators monthly; however, 6-months is a sufficient period to identify trends when compared to previous 6-month periods.

  • Accounts Receivables Overall Aging Report should indicate not more than 20% of the total A/R in the 90+ day buckets. 
  • Accounts Receivables Aging Report by Payer should highlight those individual payers with excessive amounts in the 90+ day buckets.  What do you do when you consistently have the same insurance payer with excessive amounts due to the practice in the 90+ days buckets?  Have you discussed the status of appealed claims with your billing staff?  How often is your staff following up on these claims?
  • Activity by Provider will assist the practice leadership in understanding the productivity of each provider.  This data may assist you in determining staffing for certain providers.
  • Activity by Procedure Code Group will demonstrate where the workload is being distributed among E&M visits, procedures, etc.
  • Days in Accounts Receivables should indicate how quickly the payers are making payments. 
  • Denial Rate should indicate if there are problems with coding, incorrect modifiers, etc.  The claims denial rate should be less than 7%.
  • Net Collection Rate should indicate how well the billing staff is working the claim.  A reasonable goal is having a net collection rate greater than 97%.

Knowing the key performance indicators are important, but more importantly, what does the practice leadership do with the information?  The Practice Manager should meet with the physician leadership monthly to discuss these key performance indicators.  Everyone in the medical practice has a role in the success, or failure, of the revenue cycle process (See Concordis Practice Management, LLC Blog “Everyone’s Job in the Medical Practice has an Impact on the Revenue Cycle” dated April 7, 2016).  As has been stated many times in the past, knowledge is power.  Share the data with your physicians, non-physician providers, and staff.  Hold the staff accountable for their specific role in the revenue cycle process.

Concordis Practice Management, LLC can assist the practice with a revenue cycle review.  Contact Concordis today for more information.

Contact Concordis today for a consultation

Sources:

http://www.grouponehealthsource.com/blog/conducting-a-mid-year-checkup-of-your-revenue-cycle-management?utm_campaign=industry-updates-blogs&utm_source=hs_email&utm_medium=email&utm_content=31227714&_hsenc=p2ANqtz-_aDwmZmr2YFrwWp7MtIpIWix0lXHnWzyvw1bEPR5Pd8_nIgRLb69Tgajc-dLwz8FH7KHPa4yaMsjkPEovA2Lr9Fqny9Q&_hsmi=31227714

http://www.carecloud.com/blog/key-performance-indicators-what-to-measure-at-your-practice/

http://www.medicalpracticeinsider.com/best-practices/keying-kpis

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http://www.mdnews.com/news/2016_03/top-5-daily-key-performance-indicators-medical-pr

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http://concordispracticemgmt.com/blog/

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