Medical billing is not just about debits and credits anymore. Today’s sophisticated medical billing software can provide performance analytics that allows you to stay on top of your billing, productivity, and practice performance. It helps you measure Key Performance Indicators (KPIs), so you can boost the ROI of your medical practice.
Using Key Performance Indicators is a way to put cold, hard numbers to your practice’s billing performance. Evaluating key activities in the billing arena will help point out whether your practice is doing a good job of getting paid promptly for the services you provide. As always, providing high levels of patient care is the number one priority, but you will not be able to do that long if you are not highly effective at your billing practices.
KPIs allow you to break down the various medical billing elements into quantifiable components. Once identified, you can gauge how well your practice is doing in each specific area. Over time, you can track progress (or lack thereof) towards achieving your goals. When the KPIs indicate positive trending, it means that you are on the path to effective Revenue Cycle Management.
How to Calculate Key Medical Billing Metrics or KPIs
Choosing the right KPIs relies upon a good understanding of what is important to your specific medical practice. Although they are often quite similar, “key” indicators could be different from one practice to the next. Questions you might ask to create measurable and actionable KPIs for your medical practice include:
- What is your desired outcome at various stages of your medical billing process?
- Is this quantifiable? What is considered a good outcome, and what is bad?
- Why does achieving this outcome matter to your practice?
- What information do you need to assess this performance? Can your medical billing software provide that information?
- How often will you measure progress?
- What will you do with the results? Who will be responsible for evaluating them and making changes?
- What needs to be done to improve performance in each area?
One acronym often used in evaluating the relevance of KPIs is “SMART.”
- S – Specific
- M – Measurable
- A – Attainable
- R – Relevant
- T – Timeframe
Top Medical Billing KPIs Your Practice Should Be Tracking
Key areas most medical practices should follow include claims, billing, and collections. Examples of key performance indicators for physicians include:
- Data collection by Front desk – Key information about patient demographics, insurance details, collecting correct Copay / Deductible and posting in the right place.
- Days in Account Receivable (A/R): This KPI measures how long it takes your practice to collect the revenue it has earned. Sluggish revenue cycles can lead to poor cash flow and may indicate that your medical billing software is not adequate. Does your practice usually get paid in 60 days, 90 days, 120 days…more? That is not good. Industry benchmarks put average days in A/R at just 35 days. This can be improved by fast-tracking claim reimbursements and instituting regular pending claim follow-up protocols.
- Clean Claim Rate (CCR): Your practice needs to work to ensure that a high percentage of insurance claims are submitted and successfully reimbursed the first time upon submission. A high clean claim rate means less time in accounts receivable and improved cash flow. A low clean claim rate means that your staff must invest additional time in reworking the claim and resubmit it.
- Timely filing – Closing encounters by providers with right codes and Filing claims within one- or two-days’ time is important to keep the revenue flow consistent. PrognoCIS helps to get the right codes for billing and has control to make sure codes are added before closing encounter.
- Denial Rate: A relative of the clean claim rate, the denial rate provides an instant picture of how many claims are denied. If the rate is high, you or your billing team need to drill down into the reasons why this is happening. If a high percentage of denials come from a particular payer, there may be issues that need to be resolved.
- Net Collection Rate (NCR): This is a good overall indicator of your practice’s total billing performance. It looks at how much your practice is supposed to collect from insurance companies and patients and compares that against actual receipts. You want to target an NCR between 95-100% after write-offs – it means you are billing in a timely manner, promptly adjudicating unpaid claims, and efficiently collecting outstanding patient balances. A low NCR is an indicator of poor performance and needs to be resolved immediately.
Why Track Medical Billing KPIs?
This might seem like a lot of numbers work for a medical practice that specializes in working with people, but today’s medical billing systems have much analytics and reporting features built right in that can help in the tracking process. If you do not take the steps necessary to find out what happens in your practice’s billing and accounts receivable departments, you will never be able to know whether you are meeting your financial goals or falling short.
Advantages of using PrognoCIS EHR and Integrated Billing Module
With PrognoCIS EHR and Integrated Billing module, you have complete control of your Medical Billing to see all your Key Performance Indicators in ONE Screen – Dashboard. The dashboards are created based on the reports and they help you make better decisions.
PrognoCIS allows billers to create their own reports. They will see what they want to see and NOT a crowded report that makes their work difficult. Better decisions are made when seeing a report that has the required information.
Key Takeaway for Medical Billing KPIs
KPIs are key indicators of a successful practice. The best way to ensure quality KPI tracking is to work with a trusted medical billing service like PrognoCIS. We provide medical billing software that has all the features and analytics you want, need, expect, and more. We support any practice size and have a reliable support team that provides ongoing training and educational resources to ensure you are making the most of your software. Our goal is to reduce your administrative tasks so you can focus on what you do best, provide great patient care.
