What is MGMA?
Medical Group Management Association (MGMA) is an essential factor in ensuring the success of the healthcare sector. MGMA works as a willing partner to its members, clients, and the healthcare industry by providing insights, strategies, and engagement to attain quality medical practice.
MGMA provides benchmarking and other resources to medical practice executives and physicians to enhance patient care and process efficiency. MGMA will enable organizations of all sizes to simplify KPI (key performance indicator) monitoring and gain business insights from their own economic, functional, and telemedicine data. Checking key performance indicators is a great approach, if your organization’s revenue cycle management is operating effectively or if outsourcing to a third party is more helpful. Bad debt, A/R, and claims refused are some KPIs to consider.
There are different key performance indicators to analyze your financial performance:
- Insurance A/R ratio over 120 days
- Patient A/R over 120 days
- Timely filing
- First Pass Resolution Rate (FPRR)
- Gross collection rate
- Net collection rate
- Denial rate
Impact of A/R over 120 on insurance:
- High denial rate
- Inefficient working of denials
Impact of A/R over 120 on patients:
- Co-payments are not collected.
- Un-checked deductibles.
- Ineffective patient testimonials.
First Pass Resolution Rate(FPRR)
The first pass resolution rate is the percentage of claims solved on the first attempt. FPRR measures the performance of your revenue cycle management process, which includes everything from the time patient plans an appointment through post-visit activities like coding and invoicing.
To calculate your FPRR, divide the total number of claims solved on the initial submission by the total number of claims solved throughout the same period. This metric’s optimum benchmark is 90% or above.
Net Collection Rate
Net collection rate evaluates practice’s ability to collect reimbursements. It denotes the proportion of reimbursements obtained out of the total amount of reimbursements permitted under payer contracts. Determining your net collection rate helps evaluate how much money you’ve collected out of the entire revenue expected to be collected, hence we can understand the amount of potential revenue left to collect for a particular period.
This is wrong calculation:
To compute your net collection rate, use the below given formula:
Net Collection Rate = (Payments / (Charges – Contractual Adjustments)) * 100%
Gross Collection Ratio
The gross collection is the most basic metric of a practice’s performance since it relates to the provider’s gross income or gross profit margin. While gross income includes the direct cost of manufacturing or supplying products and services. It excludes other expenses associated with selling activities, management, taxes, and additional costs associated with running the entire company.
To compute your gross collection rate, use the below given formula.
Gross Collection Rate = Total Payments / Charges *100% (for a specific time period)
The denial rate refers to the percentage of claims refused by payers within a specific period. A low denial rate indicates that your practice has a good cash flow, whereas a high denial rate suggests that your practice has an unstable cash flow.
To determine your practice’s denial rate, sum total dollar value of claims denied over a given period and divide it by the total amount of claims submitted. Maintaining denial rate below 5% is a best benchmark because industry average is 5 to 10 %.
Timely filing varies from payer to payer and state to state, so providers should file the claims not later than 24-48 hours from visit date. Closing interactions with the correct codes and reporting claims in time is critical in maintaining a consistent revenue flow. Timely filing helps physicians to receive money faster.
I-Med Claims Can Help You Access Your KPI Data
Dashboard tools are helpful in monitoring KPIs since they allow you to collect and show data in several ways that make it simpler to visualize what’s going on in your practice Key performance indicators as KPIs play a vital role in successful practices. You may begin to identify and fix issue areas in your patterns that are delaying development and income by producing monthly summary sheet to track KPIs. That enables practice managers to convey data to physicians and stakeholders more effectively and set criteria for future success. We provide 99% claim acceptance rate and support size practice. Our objective is to free you up from administrative duties, so you can focus on delivering quality patient care.