Your practice runs on revenue from medical billing but keeping track of how it performs can be complex. Medical billing KPIs can help you identify problems in your processes and improve your financial performance.
Here are eight medical billing metrics your practice should be tracking.
What Are Medical Billing KPIs?
Key Performance Indicators, or KPIs, are metrics used to track performance. Medical billing KPIs measure your practice’s revenue cycle performance. Tracking medical billing metrics over time can help your practice improve efficiency and increase revenue.
Robust medical billing KPIs are specific, measurable, and aligned with your practice’s financial goals. Your EHR and EPM system has the data you need to develop and display KPIs to keep your revenue cycle on track.
1. Missed Appointments
Your revenue cycle begins with appointment scheduling. Frequent cancellations and no-shows can harm your financial performance. By tracking the share of appointments canceled or missed, your practice can identify patterns and adjust appointment procedures to reduce last-minute gaps in your schedule.
2. Claim Lag Time
Claim lag time is the average number of days between a patient visit or procedure and the submission of a claim to a payer. While integrated practice management and EHR systems reduce lag days by simplifying billing, some practices still struggle to bill claims timely. A long billing lag time slows down your revenue cycle and increases the risk of missing claims filing deadlines. An average billing lag time KPI can serve as an early warning system for problems in medical billing workflows.
3. Clean Claims Ratio
A clean claims ratio is the share of claims accepted and paid on the first submission. A low clean claims ratio means your claims are frequently denied or require clarification, which may signal a problem with your coding, documentation, or claims submission processes.
4. Denial Rate
Similar to the clean claims ratio, the denial rate is the share of all submitted claims that were denied. A high denial rate warrants further investigation to identify the source of incorrect claims. Tools like TempDev’s Revenue Cycle Dashboard NextGen EPM Report provide denial statistics by reason for denial to help your practice identify common errors.
5. Gross Collection Ratio
Your gross collection ratio is your total payments divided by total charges. A high gross collection ratio means your practice collects most of its billed charges, which is a good sign for your medical billing procedures.
6. Net Collection Ratio
A net collection ratio is your total payments divided by the total allowed charges. Your net collection ratio is a more refined metric than your gross collection ratio because it focuses on allowed charges rather than total charges. This metric offers a realistic picture of what share of available reimbursements your practice was able to collect. A low net collection ratio can signal difficulties with timely, accurate claims filing.
7. Accounts Receivable Aging
Accounts receivable are all your billed charges that have not yet been paid, including both insurance and patient bills. Your average accounts receivable days is an estimate of how long it takes your practice to collect payments. Your practice should also track the share of accounts receivable that are outstanding for more than 30, 60, and 120 days. Practices with healthy revenue cycles generally clear accounts receivable within 50 days or less.
8. Bad Debt Rate
Bad debt is any medical bill that goes uncollected. Your bad debt rate is your total bad debt divided by the total charges. Patients often struggle to pay medical bills, so your practice will always face some amount of bad debt. However, you can lower your bad debt ratio by collecting patient co-pays up-front, double-checking insurance coverage, and providing online payment options.
How to Keep Track of Medical Billing KPIs
Your NextGen EHR and EPM system has the data you need to develop and track medical billing KPIs. You can use built-in NextGen reporting functions to aggregate data and follow KPI performance over time.
TempDev has also created the Revenue Cycle Dashboard NextGen EPM Report to help your practice keep track of your revenue cycle. It includes built-in medical billing metrics such as accounts receivable aging, appointment statistics, denial rates by reason, and revenue by payer. Armed with specific, actionable data about your medical billing processes, you can improve your workflows to make your practice more efficient and profitable.
How TempDev Can Help With Medical Billing KPIs
TempDev’s consultants are medical billing experts. With help from our NextGen developers, we can create medical billing KPIs, dashboards, and reports customized to fit your needs. TempDev also offers a full suite of revenue cycle management services, including consulting, temporary staff placement, and outsourcing.
Call us at 888.TEMP.DEV or contact us here for help implementing and tracking medical billing metrics.