Monitoring your practice’s financial performance while providing exceptional patient care is vital to your medical group’s success. By routinely monitoring your medical billing metrics you can ensure that the practice is collecting what it’s owed.
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. Single data points without comparison don’t tell much of a story!
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.
This metric highlights the effectiveness and efficiency of your billing operations in getting you paid as quickly as possible. 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.
You can and should use the same calculation for percentages over 90 and 120 days for the total view of your A/R.
Accounts receivable (A/R) measures how long it takes for a service to be paid. Knowing your days in A/R is vital for understanding your budget and determining when you have the funds to pay for operating expenses.
This metric should be reviewed every month to make sure you aren’t experiencing blockage in money being paid.
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.
You will be able to determine which appointments are most profitable, allowing you to accept more of these appointment types using this formula.
Your first pass resolution rate (FPRR) is the percentage of claims that are paid after being submitted a single time. This metric tells you how effective your revenue cycle management (RCM) process is. If your practice struggles with a low FPRR, focus on insurance verification, billing, and coding to create a more effective RCM.
You may also want to consider outsourcing to a more efficient medical billing service!
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. However, a higher rate does not necessarily mean your practice makes more money.
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.
This easy-to-calculate metric reflects how effective your practice is in collecting the reimbursement you are allowed. Practices calculate their NCR to see how much revenue is lost due to factors such as uncollectible debt, or other non-contractual adjustments.
This metric can be used to compare with practices with similar: specialty, location, and clinical personnel. If your NCR is lower than 90-100% after write-offs, you should consider an audit of billing practices.
Contractual Variance is the amount you are receiving below the amount you contracted with your payers. This can be affected by how your biller submits the claim among other reasons. Improper submission of a claim can still be paid, but there is a chance that it will be underpaid.
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.