Are you (or your practice manager) regularly measuring key performance indicators (KPIs) that indicate the health of your revenue cycle management? If not, you should be. When you select and measure KPIs and monitor those measurements for trends, you can more easily see where improvements are necessary and will be of most benefit.
Check your EHR billing software and learn what reporting features are available. If the following types of reports aren't built-in, you can often use your software's custom reporting tools to create them, and once you create reporting procedures, you can use them repeatedly without a lot of set-up. These 5 reports will help you quickly assess your practice's revenue cycle management performance.
1) High-Level KPI Report
Running high-level medical billing reports can help you learn which CPT codes and encounters are most profitable. Your practice management software may offer a built-in KPI reporting template, or you may have to create one yourself. Some of the most common KPIs tracked include:
You want to see steady or positive trends in your KPIs. Should you notice, for example, a drop in collections that are normally consistent, it may be worth further investigation. If charges increase one month, collections should increase the following month, or you could be experiencing AR slowdowns.
2) Net Collection Ratio
Your net collection ratio tells you, quite simply, whether you're collecting all you're owed. You should aim for a net collection ratio of 95% or more. If your net collection ratio is lower, you have an opportunity for improvement. To run a report on net collection ratio, you have to understand the charge value (charges minus contractual adjustments) of total billed charges. When you know charge value, you can then calculate how much of that charge value you collected in a given reporting time period by dividing payments by charge value.
3) Per-Encounter Reimbursement
Per-encounter reimbursement is a KPI that helps you compare your practice with others similar to it. Per-encounter reimbursement is calculated by dividing payments for a defined time period by the total number of encounters for the same defined time period.
This is a KPI that should show consistency from month to month. If your billing is outsourced, your billing service should give you these medical billing reports every month so you can stay on top of how much you're averaging in reimbursement per patient encounter.
4) Aging Accounts Receivable
How many accounts are in AR, and how long have they been there?
Do you know what percentage of your accounts receivable (AR) that have been in AR for more than 120 days? You should. It's best to run a weekly report showing how many accounts are in AR for 1-30 days, 30-60 days, 60-90 days, 90-120 days, and more than 120 days. If you have a lot of accounts that have been in AR for more than 120 days, insurers (or patients) may be dragging their feet. Ideally, you should have fewer than 10% of your accounts in AR longer than 120 days. If it goes over 25%, you need to take steps to bring this figure down.
5) Top 10 Insurer Analysis
A Top 10 Insurer Analysis report tracks the charges, payments, and collections for the top 10 insurers your practice deals with. This report should account for the majority of your practice's revenue, and will give you a valuable "snapshot" of how well your practice is doing.
Since this report tracks charges, payments, and collections from insurances, it can also be built to track the CPT codes and the relative value unit for each. Since every CPT code has a relative value unit (RVU) associated with it you can build the report to track the collection per total RVU rate for CPT codes. Collection per total RVU rate helps you discern how appropriate your rates are and how healthy your revenue cycle management is. You want this figure to be higher than the current Medicare Conversion Factor. If it isn't, you may not be collecting the right amount from patients.
If You Don't Monitor and Measure, You Can't Make Improvements
Once you have these reports set up, you can run them quickly whenever you need to, or on a regular basis (weekly, say). You'll need to recognize trends and outliers, but once you have an idea about what is normal for your practice, you'll have an easier time tracking the causes of outliers in the data.
Are you struggling with cash flow or are you not sure how your revenue cycle is performing? Contact us at GroupOne Health Source to see how we can help you better understand your practice management reports. We offer free revenue cycle consultations to see if our services are a good fit for your practice.