Medical Billing KPIs, how can you evaluate the health of your business. And no idea what’s going on in your practice’s back office in terms of invoicing and accounts receivable?
Are you on track to reach your financial objectives or are you falling short? And, depending on whether the response is “yes” or “no,” how will you devise a strategy to maintain the gains?
Your accounting team will gladly tell you that the more data you have regarding your billing situation, the better. This is why so many practices will concentrate on medical billing key performance indicators.
The following are the most important key performance metrics for billing and collections (KPIs). You can quickly identify where you require assistance by looking at each stage of the revenue cycle.
One of the most important Medical Billing KPIs to keep an eye on is the bad debt rate.
Not all of your patients will be able to pay their bills on time. And you should have anticipated this when reviewing all of your revenue. The bad debt rate, expressed as a percentage, is one of the most important medical billing KPIs to monitor. Divide authorized charges by bad debt write-offs to get this percentage
Rate of Gross Collection
Another key KPI is the gross collection rate, which is calculated by dividing money from payments by invoiced charges. It is a good metric to utilize when comparing the cash flow of your company.
You can obtain a better picture of what future collections will be like by examining the fluctuations. The gross collection rate will always be affected by changes in the patient population, fees, and insurance providers.
Rate of Net Collection
You will calculate the net collection rate to see how much money your practice is making out of all the bills that are available for payment. It’s calculated by dividing payments by the total number of allowable charges.
You can compare different groups in your company using the net collection rate, and see how demographic changes affect the percentages your teams collect.
Per-Accession Average (and Median) Price
What are the typical fees for each accession or test you perform? Knowing this information will aid you in estimating future costs, which will aid you in forecasting commissions, profits, and operating costs. This figure can be followed according to the test classifications for each accession.
Rate of Resolve
The effectiveness of your practice’s resolution rate will reveal how disciplined your personnel is in managing revenue flow. This is calculated by dividing the total number of claims paid in a particular time by the total number of claims filed in the same period.
A higher percentage means a better rate. If you get a lower rate than you want, go to a specialist to determine if there are any problems with how your team confirms patient eligibility or if you are making coding mistakes.
Rate of Denial
A high denial rate for your practice might be disastrous. This rate is calculated by dividing the number of claims denied by the number of claims remitted, and it typically ranges between five and ten percent in the healthcare industry in the United States.
Manual collections are a bottleneck for many firms, thus automating your collections procedures is a viable solution.
How long has it been since you have had an account receivable?
The number of day’s bills have been in accounts receivable is one of the most crucial medical billing KPIs for many clinics. You will have this KPI to study and improve once you divide your ending accounts receivable by your average daily charge.
The Percentage of Unbilled Claims
A variety of errors might result in a higher percentage of unbilled claims in your business. Divide the number of claims by the number of claims rejected due to incorrect or missing information to calculate the critical performance metric.
Inaccurate doctor’s orders, omitting DX codes (or using the incorrect ones), and errors in patient demographic information can all contribute to a higher unbilled claims KPI.
Revenue from Month to Month
You use month-over-month revenue to track cash according to payers, tests, and clients to get a better picture of where your revenues are coming from. Perhaps the laboratory you utilize is having trouble keeping up with its workload.
You might want to compare which clients are the most profitable. This KPI also aids in identifying which tests are producing the greatest issues in terms of reimbursement, such as medical necessity conflicts.
Operating Margin
Making a habit of measuring key performance indicators makes it much easier to gain a better knowledge of your medical billing position.
After you started strategically trying to gather specifics on what you are paid. And when, who isn’t paying, and how these trends evolve, you can design methods to improve these data.
Checkout our medical billing services page for more information on how to improve your billing and collections.
