What Are Common Medical Billing KPIs and Metrics?
Medical billing metrics or Key Performance Indicators (KPIs) help the physician to understand their revenue cycle and provide insights to increase collections.
To gain a better understanding of your revenue cycle with analytics driven by medical billing metrics. Use these metrics to increase collections and reduce payment time.
Monitoring your practice’s financial performance while delivering exceptional patient care is critical to the success of your healthcare team. By regularly monitoring your medical billing metrics, you can ensure that the practice collects money owed to it.
There are many ways to analyze medical bills and collect data, but the following seven key performance indicators are closely related to your financial performance:
- A/R ratio over 60 days
- Accounts Receivable Days
- Collection per visit
- First Pass Resolution Rate (FPRR)
- Gross Achievement Rate (GCR)
- Net Recovery Rate (NCR)
- Contract differences
A proactive way to monitor these metrics is to review them at the end of the month and compare them to previous periods. A single data point without comparison doesn’t tell the story!
The analysis required to calculate your medical billing metrics isn’t too complicated, but if you don’t have I-Med Claims as your medical billing company, then you can have a major issue in your practice financing.
Way To Calculate Key Medical Billing Metrics or KPIs
Gross Collection Rate (GCR)
The formula used: total payment/fee * 100% (specified time period)
A high Gross Collection Rate (GCR) indicates how close your fees are to payer rates and how successful your collections practices are. However, higher rates do not necessarily mean your practice makes more money.
Each GCR practice will be different because each practice defines a unique fee schedule, so this metric is better monitored internally rather than compared to industry standards or other practices.
Percentage of AR beyond 60 days
The formula used: old balance / total receivables
This metric highlights the effectiveness and efficiency of the billing process in getting paid as quickly as possible. Large amounts of funds over 60 days may indicate late fee issues, increased denials by claims scrubbers and first pass denials by payers, poor write-off/amendment agreements, or poor overall collections. You can and should use the same calculations for percentages greater than 90 days and 120 days to see an overall view of accounts payable.
Accounts receivable days
The formula used: Total AR/Average Daily Cost
Accounts Receivable (A/R) measures the time it takes to pay for services. Knowing your days in A/R is critical for understanding your budget and determining when you have the funds to cover operating expenses. This metric should be reviewed monthly to ensure you are not facing payment bans.
Net Collection Rate (NCR)
The formula used: Cash Expenses/Net Expenses
This easy-to-calculate metric reflects how effective your practice is in getting paid. Their NCR practice calculates lost revenue due to factors such as uncollectible debt or other non-contractual adjustments. This scale can be used for comparison with similar practices: specialty, location, and clinical staff. If your NCR falls below 90-100% after write-off, you should consider reviewing your billing practices.
Collection per visit
The formula used: Total Refunds / Total Visits
Knowing how much you collect in an average visit is a good way to gauge your practice against industry standards and other professional practices in your area. Additionally, you will be able to choose the most profitable appointments, allowing you to accept more such appointments using this formula.
First Pass Resolution Rate (FPRR)
The formula used: Total Claims Filed in Step 1/Total Claims Paid
The First Pass Resolution Rate (FPRR) is the percentage paid after a claim is submitted once. This metric tells you the effectiveness of your Revenue Cycle Management (RCM) process. Moreover, if your practice is struggling with low FPRR, focus on insurance verification, billing, and encryption to create a more efficient RCM mechanism. You may also want to consider outsourcing more efficient medical billing services!
The formula used: contract price – the amount of ERA allowed
The contract difference is the amount you receive that is less than the contract amount you signed with the payer. This can be affected by the way the biller makes the claim, among other reasons. It is still possible to get a payout when the claim is wrong, but your payout may be less than this amount.
Furthermore, our practice should include an analysis that shows you that the expected payment amount under the fee schedule is lower than the amount you receive from the insurance company.
How I-Med Claims Tracks Your RCM KPIs?
In addition to the above KPIs, regular quality checks also increase the efficiency of the RCM cycle. Therefore, ensuring an efficient healthcare revenue cycle will help healthcare providers increase their revenue.
These metrics and KPIs are critical to maintaining optimal cash flow, high financial performance. Plus, improving the base of your medical practice. Some require daily reviews, while others require monthly or quarterly reviews.
However, this can be a waste of time and effort. But medical practices can turn to eligibility and revenue cycle management experts who can ensure that the organization’s profitability is not compromised and that patients receive quality care.
At I-Med Claims, this is what we do. We work with Medical practices to resolve any issues they have and help them to improve cash flow so they can focus more on delivering patient care.
Looking to boost your medical practice income? Call us now, I-Med Claims have the KPIs you are looking for.