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KEY PERFORMANCE INDICATORS (KPI):  HOW DOES YOUR OFFICE STACK UP AGAINST BEST PRACTICES?


Updated by Laurie L. DeSantis on 7/1/2014

This is a question not often asked by physicians and it is not uncommon that practices do not measure their trends using nationally published benchmarks or metrics that will allow them to monitor their monthly activities. 

 

In today’s challenging reimbursement environments there seems to be no end to the complexities of medical coding & billing.   With the ever changing “rules” from third party payers, to limitations on coverage, increased patient liabilities and increased NCCI (national correct coding initiative) edits that prevent improper payment when incorrect code combinations are reported.

 

Implementing these “best practice” measures into a monthly evaluation of your billing department or outsourced billing service will give you a better understanding of the performance of these individuals or entity.

 

MEASURE YOUR OWN PRACTICE

METRIC NAME

METRIC CALCULATION

BEST PRACTICE

Patient insurance verification pre-visit

Total patient visits divided by total patients verified pre-visit

100%

Charge lag days

Your PMIS should be able to calculate the days from the date of service to entry into the management system

2-days

 Days in Accounts Receivable (A/R)

Total accounts receivable

divided by Gross charges. 

That sum x 30 (average days in a month)

28-32 days

A/R > 120-days in age

Total A/R >120-days divided by

the total accounts receivable

6%

Claim denial rate

Total claims filed to a payer divided by the total denied claims in a given month

<2%

Net Collection Rate

Total payments divided by

Gross charges – write offs & adjustments

99-100%

 

The most over-looked area in practice management is in the area of denial management.  As demonstrated by national statistics below.  Denials are an area that can affect A/R levels and cause payment delays when the practice is poorly managed.  Further, when posting denial reason codes you should be able to dive deeper and quickly find out where the denials are coming from and take corrective actions.   Once these are identified you can build “rules” into your PMIS that will prevent claims submission until the known errors are fixed prior to the first pass claim.

 

INDUSTRY AVERAGES (based on 2011 data) 

       
  Claims rejected on 1st submission 30%  
  Underpaid claims 20%  
  Gross collection rate  <60%  
  Preventable denials  90%  
  Denials that are recoverable  67%  
  Average days in A/R  53 days  
  Cost per claim $5-$7  
  Cost per FTE physician $30,000-$60,000  
  Cost of billing operations    
       * Cost of billing personnel 58-62%  
       * Cost of Technology (PMIS) 18-22%  
       
       

 

Healthcare Revenue Logic, LLC not only has experienced staff in place we, additionally, have the denial management workflow process perfected, which has proven to capture thousands of dollars for practices that would have lost revenue. 


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Key Contacts
Suzanne Lavin
 757-668-7475
 lavin@healthcarerevenuelogic.com

Laurie DeSantis
 757-668-8611
 desantis@healthcarerevenuelogic.com

811 Redgate Avenue
Norfolk, Virginia 23507