Too often, healthcare professionals leave money on the table. This article reviews the five monthly metrics private practices should review with their billers and collectors to avoid missing out on earned revenue.
By Heather Signorelli with contributions from FlexMedStaff
This article was published on KevinMD
Healthcare Business & Technology states that “doctors in the U.S. leave approximately $125 billion on the table each year due to poor billing and coding practices.”
As your private practice grows, don’t leave money on the table!
This article reviews the top 5 billing metrics and benchmarks you should be aware of to track your performance and set key performance indicators (KPIs) when running a private practice. Practices that make the recommended changes and track their metrics can grow revenue by up to 30%.
Explained: A “clean claim rate” refers to the percentage of submitted claims without errors accepted by the insurance carrier upon the first submission.
Recommendations: Practices should aim for a clean claims rate of more than 90-95%, ensuring practitioners are reimbursed by the payer faster. To improve your clean claims rate, ensure you submit correct patient information, verify insurance eligibility and accurate CPTs & ICD-10 codes with correct modifiers.
Explained: Denied medical claims are processed by the payer and marked as unpayable. Unlike rejected claims that typically require a simple fix, denied claims are adjudicated and require your billers to chase after for payment.
Recommendations: Practices should aim for a denial rate of 5% or less. Most of the healthcare industry saw the denial rate from carriers go up 10-30% over the last two years. To decrease your denial rate, you must review the most denied codes and determine if any procedural changes are necessary. Common reasons for denials include expired eligibility, prior authorizations, inaccurate coding, duplicate claims, submission to the wrong payer, and patient demographics. Processes can often be put in place to improve your denial rate. If a denial can be overturned, it is worth ensuring your billers quickly resubmit claims to avoid submitting them outside the payer’s desired window.
Explained: Accounts receivable are the outstanding charges still pending adjudication and payment. This can include both insurance and patient balances. The average days in A/R are the average number of days it takes for a practice to collect due payments.
Recommendations: Practices should aim for an average days in A/R of 30-40 days for outpatient visits. Average days in A/R will always depend on the payer and your billing and patient payment policy practices. It is essential to track these metrics to know which process must be fixed.
To keep your insurance A/R down, you must have processes in place to submit claims quickly, manage any rejections or denials, and call insurance companies if there are delays in getting a claim adjudicated.
To keep your patient A/R down, you should do eligibility checks before patient check-in and collect any co-pay, deductible, or co-insurance ahead of time. Consider storing patient credit cards to charge for balances over 60 days old. If you were to do this, ensure that your credit card processor is in compliance and that patients sign the necessary forms and policies.
Explained: This is defined as the percentage of accounts receivable that is over 90 days. Typically, A/R that is older than 90 days may get harder to collect.
Recommendations: Practices should aim to have accounts receivable over 90 days less than 20%. It is essential to ensure this metric is tracked according to service date and not billing or re-billing dates. As mentioned above, everything from checking insurance eligibility, prior authorizations, appropriate coding, and an efficient billing process will impact your A/R.
Explained: This is sometimes called the “adjusted collection rate.” Essentially, this is the amount you are paid compared to the amount you charge (minus any contractual right-offs).
Recommendations: Practices should aim for a net collection rate that improves each quarter. You want to make sure you are tracking this over a more extended period of time since there is a time delay from when you drop a charge and get paid. Monitoring your net collection rate over time will provide your team insight into your billing habits. The key to this metric is an efficient billing process starting from when a patient is registered through claims submission and denial management and payment. One thing to remember is that you must ensure that you are only subtracting contractual write-offs.
Take the time to look at each of these metrics in your practice. Make sure to review these metrics regularly with your billing team. If they don’t routinely provide this information, then ask for it! Develop a habit of checking these top 5 metrics monthly and creating key performance indicators (KPIs) if the metrics aren’t being met.
***Dr. Heather Signorelli is a pathologist and physician executive in a large healthcare system overseeing clinical operations for hospital laboratories. She is passionate about quality improvement, workflow efficiencies, revenue capture, and business operations. She and her husband started National Revenue Consulting, a medical billing company, to help private practices thrive through a reliable service that supports workflow optimization and practice dynamics so they can increase their revenue. You can contact Dr. Signorelli at email@example.com if you need support to improve your medical billing metrics and revenue. You can also listen to their podcast at RevMD.