If you are a medical practitioner are feeling overwhelmed adjusting with medical billing performance metrics the first thing to do right now is to focus on quality coding and track KPIs which will heavily impact your financial performance.
The current billing landscape is not a road for many medical practices to navigate. The transformation of value-based care and rising patient responsibility makes the day-to-day management more challenging. Time has come to critically measure the financial health of your medical practice and if your staff is falling short in medical billing performance metrics. Performance metrics such as the Key Performance Indicators (KPIs) help doctors and management to understand the strengths and weaknesses of their revenue cycle and help strengthen future decisions.
Here are valuable tips to manage your medical billing performance indicators:
Collection rate measurement
The collection rate is the measure of the facilities effectiveness in collecting all valid reimbursements. This includes the payers who the practice has contracted with, and to confirm the difference between standard fee and payer reimbursement rate.
When you compare the difference between the allowed amounts and real reimbursements, a practice can define how much is being vanished to write-offs, untimely filing and substandard collection practices. When we talk about gross collection rate, it is calculated by dividing payments expected from insurers and patients by gross charges. Whereas, net collection rate is calculated by dividing payments expected from insurers and patients by contractual amounts.
Accounts Receivable Days
Accounts receivable days (A/R) is the foremost industry standard for not only measuring key medical billing performance metrics it also measures the days amounts owed to the practice by insurance payers, patients, and third parties will take to be paid.
For instance, if you treat or meet a patient today, days in A/R represent the average number of days it will take before you are fully paid for the services given. The industry benchmark is normally 30 days but is subjected to change by the type of specialty and payer mix. Overall, it is one of the best medical billing performance indicator to monitor and provide insight on your revenue cycle.
Aging Accounts Receivable
Aging A/R analysis is an evaluation of the actual accounts receivable aging to the estimated accounts receivable aging. Inconsistent percentages indicate an unreliable policy in how insurance payer and patient collections are being performed.
Remember that days in A/R and A/R aging validate a practice’s ability to quickly turn around A/R and collect all money due.
In conclusion, understanding the importance of your collection rate, along with days in A/R, and aging accounts receivable aging is just the beginning to uncovering a breath of data that will put you on the path of a perfect medical billing performance.