There are a lot of ways medical professionals can tell if their work is successful. Patients feel better, lab results get delivered in a timely manner, x-rays and scans show the diagnostician what’s happening. But how do you monitor the success of the practice or facility as a business?
Key Performance Indicators (KPIs) for medical billing are the metrics that every business owner should pay attention to. Health care isn’t all about the money. However, if you can’t pay the staff, get the supplies ordered and the equipment maintained, you can’t stay in business, and you can’t help anybody that way!
Key Performance Indicators for Medical Billing
Hospitals have some unique KPIs, including bed occupancy rate and average hospital stay. Still, we are going to focus on the key performance indicators for medical billing that a healthcare billing company can help you track and use to better manage your business.
Healthcare revenue cycle KPIs create a quick snapshot of your metrics. Yet, the real value is in assessing trends and the accomplishment of goals. While it is informative to know that your bill was $100,000 last month, it’s important to know how that relates to previous months. Your KPIs should be trending towards your goal. So if you have been billing $80,000, that 100K is a great sign. However, if you were billing well over that for the past few months, then you have a red flag and know that you need to figure out what happened.
These are some of the most important KPIs to monitor:
This is the most obvious metric for many, and an easy one to track, but there are a couple of important things to keep in mind. It is easy to look at your bank statement and see how much is increasing, but that’s only part of the story. Most likely you receive payments from insurers, government contracts and patients. You should look at each of these revenue streams separately. Since managing each one requires different actions, and the cause of increases and decreases will be different for each.
Days in A/R:
In medical A/R, the measurement of time between delivering a service and getting payment are in days. Again it is helpful to look at receipts from patients and other payers separately. When we manage A/R accounts, we expect this number to continually decline until all old accounts are in control. Efficiently submitting claims, following up on denials, and clear communications with patients are all steps that better this metric.
Payor Reimbursement Time:
While the amount of time it takes to get paid by insurance companies and government programs is part of the days in A/R metric. There is another reason to pay attention to how long it takes to get reimbursements. You may find that a particular payer is taking longer than the others. This lets you know to get in touch with them and make sure there are not issues with your contract or the submittal process.
A/R Over 90 Days:
The percentage of claims and bills that have been in A/R for 90 days or longer is another useful metric to track. The longer a bill goes unpaid, the less likely it is to ever get paid. Implementing practices to improve billing and collection efficiency should start this percentage on a downward trend. Some healthcare billing companies will tell you that after 120 days, a bill isn’t worth pursuing. However, we have been successful with clearance of claims/bills up to a year old. Once we implement our system for quickly filing and tracking claims, far fewer ever make it to the 90-day mark. However, the metric remains a good indicator of the success of our system.
Claim Denial Rate:
The percentage of claims that are denied is a good indicator not only of the effectiveness of your billing staff, but potentially also the overall financial health of your business. Every claim denial is potential lost income for you, and a certain decrease in revenue. Since, there is a cost associated with processing the claim and resubmitting it. Engaging a good healthcare billing company will greatly improve this metric. If this percentage ever goes up, it is a signal to check your system for a problem. Questions to ask include whether the codes changed or new staff were brought on who are inexperienced in your specialization and need further training.
There are many more KPIs that can be useable. However, the above five provide a solid introduction to useful metrics in medical billing. That will make a big change in your understanding of your revenue and whether it is improving or needs immediate attention.
Medcare MSO Provides KPI Reports As Often as You Want Them
For the reasons above, medical business owners need to monitor their healthcare revenue cycle KPIs regularly. For some providers, outsourcing medical billing has become a source of frustration. Because the business owner doesn’t have access to their financial information. How confident can a person be about hiring new personnel, upgrading equipment, etc. when they don’t know how much they are losing to unpaid claims or old A/R accounts?
Part of Medcare MSO’s commitment to communication with our clients is providing understandable reports on a regular basis. The client gets to choose how often that is. Assessing financial reports on a daily basis is just not feasible for most people with a medical business. On the other hand, only having access to the important KPIs in medical billing once a month may leave some business owners feeling like they don’t have a good handle on what’s going on with their finances.
Monthly or every two weeks are popular intervals for reviewing reports. That tends to let people feel like they are keeping a responsible eye on things without devoting more time to paperwork than practice. A quick weekly update and a thorough monthly review combine to make another great approach. Therefore, making sure nothing big stays under the radar, but reviewing reports doesn’t become an energy drain.
Additional Benefits of Hiring a Healthcare Billing Company
If you are using an in-house biller, you may have software that can generate a report with graphs showing your KPIs. But how the metrics relate to each other, and what causes some of the changes may not be apparent. A professional healthcare billing company should have staff who can help you interpret the results and see where change is needed.
A good medical billing company will also be able to streamline your systems with front-end procedures. Additionally, they’ll make sure insurances are verified, approvals are received, and secondary insurance is identified. Ensuring that you benefit from all potential income sources.
As a healthcare billing company with over a decade of experience, Medcare MSO has worked with practices, labs and diagnostic facilities all over the country. Our clients can easily see how beneficial our services are each time they reference our reports showing their healthcare revenue cycle KPIs. Give us a call at 800-640-6409 or request a demo . Furthermore, find out how we can improve your revenue and take a lot of paperwork off your plate.