Unleashing the Power of KPIs
In today’s medical world, clinics are becoming increasingly efficient due in part to billing key performance indicators (KPIs).
These metrics help professionals optimize overall performance by analyzing specific processes—patient wait time, treatment costs, and more—so they can be reimbursed in a timely manner for the care they provide.
As the old adage goes, you can’t manage what you don’t measure, and you can’t measure what you don’t track.
Though all indicators are helpful, some are more applicable than others to your clinic. Read on to determine which KPIs to monitor regularly to improve the effectiveness of your clinic.
- No-show and missed appointments. Each time a patient misses an appointment, your clinic potentially loses money, especially if you’re unable to fill the time slot. An average of four no-show and/or missed appointments per day can cost your practice a significant amount of money each year, upwards of $150,000, according to SCI Solutions, a software company that helps healthcare companies track revenue. Tracking this statistic helps your front-office staff evaluate their current processes.
- Calculation: Number of appointments missed / number of patients scheduled
- Days in accounts receivable (A/R). Days in A/R is the average time it takes for a claim to be paid. The lower the number, the faster on average your invoices are being collected. This allows you to see trends in your revenue cycle and address potential improvements in your company’s credit and collections efforts. An acceptable A/R is 34 days or less.
- Calculation: Total Accounts receivable / Average Daily Charges (90 Days)
- Clean claims rate (CCR). The CCR, or first-pass ratio, is critical to the financial health of your clinic. Simply defined, a clean claim is free from errors that may cause a delay in payment. As a rule of thumb, your CCR should be 92% or higher. Optimally, you want to keep it closer to 96% to significantly decrease the amount of time required to generate and collect payments.
- Calculation: Number of claims that pass all edits / total number of claims accepted into the claims processing tool
- Claim denial rates. Denied claims generally contain one or more errors that keep them from being processed. Uncovering these errors often leads to a tedious process that ties up employees and prolongs days in A/R. Because of this, clinics lose a small percentage of each denied claim, which adds up to a significant amount over time. Keeping your denied claims between 5-10% helps your clinic successfully collect amounts due.
- Calculation: Total dollar amount of claims denied by payers within a given period / total dollar amount of claims submitted within the given period
- Total revenue for the practice. Collecting payments is a fairly complicated process that needs constant monitoring. It directly affects your practice’s total revenue, which is your entire income before subtracting expenses. Understanding the total amount of money that comes in each month, quarter, and year helps you meet and adjust your expenditures for a given period.
- Calculation: Total combined amount of revenue within a certain time period
- Total accounts receivable per physician. This metric measures the average profit or loss of an FTE physician. It can be used to track the profitability of your clinic based on a physician level.
- Calculation: Total physician A/R / number of FTE physicians
Consistent and critical analysis of these KPIs can help improve your clinic’s overall efficiency. Contact us today to see how the PCIS GOLD® software solution can help you do this.