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.
Understanding Practice Performance Intelligence
The MGMA standards are a set of metrics used to determine the overall performance of medical practice in the United States. These metrics are actually the key indicators for practice performance success. The interpretation of these MGMA benchmarks is essential to assess the overall practice performance. In addition to this, these metrics also provide a framework to make practice performance data more accessible.
Qualities of Performing Practices
- According to MGMA, a high-performing practice strives to meet its standards through the use of the latest technologies that drive its growth.
- Good patient experience is another important quality that performing practices tend to possess, and they use the latest technology and tools to ensure it.
- And lastly, a high-performing practice collects regular feedback from its patients through both online and offline mediums.
Why Do Practices Lose Money? Here are the 10 Reasons:
- When practices fail to comply with MGMA standards and forget about the nuances involved in the process
- When co-insurance and co-pays aren’t collected in a prompt manner.
- When revenue collection isn’t on their priority list.
- When they are not able to meet the Key Performance Indicators (KPIs)
- As patient consumerism evolves, they fail to meet the new demands posed by the evolution.
- Hiring both bad quality and quantity human resource for their medical practice.
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)
- Net-collection rate
- Gross-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.
The Net-Collection Rate
This rate tends to evaluate the ability of medical practice 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 the wrong calculation:
To compute your net collection rate, use the below-given formula:
Net Collection Rate = (Payments / (Charges – Contractual Adjustments)) * 100%
Gross Collection Ratio
Gross collection is the most basic metric of a practice’s performance since it relates to the gross profit margin or the gross income of the provider. On the other hand, gross income includes overall manufacturing costs or supplying the products along with the services. It does not include other expenses related to selling, management, taxes, and additional costs associated with operating the entire practice.
To compute your gross collection rate, use the below-given formula.
Rate of Gross Collection= Sum of all Payments / Overall Charges *100% (This is time constrained)
Denial Rate
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 the total dollar value of claims denied over a given period and divide it by the total amount of claims submitted. Maintaining a denial rate below 5% is the best benchmark because the industry average is 5 to 10 %.
Timely filing
Timely filing varies from payer to payer and state to state, so providers should file the claims no later than 24-48 hours from the visit date. Closing interactions with the correct codes and reporting claims on 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
Yes, folks, I-Med Claims is a professional medical billing company that provides you with medical billing solutions according to the MGMA standards. We have a complete dashboard that helps us in monitoring the crucial KPIs. This is mainly because our tools and software allow you to collect and show data in multiple ways, making it simpler to understand all nuances and fathom what’s going on in your practice. Hence, Key Performance Indicators (KPIs) play an important role in successful medical practices.
We have a team of MGMA experts who identify and fix problems in your practice that are negatively impacting your revenue collection by producing a monthly summary sheet to track KPIs. This enables practice managers to send data more effectively and set a criterion for future success. We provide a 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.
