Providing the highest level of care for your patients is your number one goal. However, if you don’t show the same amount of consideration for financial health, you can quickly find yourself out of business. That’s a lesson that has been of particular importance in light of the crushing effects the COVID-19 pandemic has had on private practices. In fact, by August 2020 alone, just five short months into lockdowns, a survey conducted on behalf of ‘The Physicians Foundation’ found that 8% or 16,000 private practices had closed their doors due to the virus’ financial impact.

The good news is that even during rocky financial times, there are ways to protect your practice’s health, visualize trends that tell you how well your practice meets your business goals, and even discover revenue-generating opportunities.

It all begins with business analytics.

Keeping track of the Key Performance Indicators (KPIs) that matter the most for your independent practice allows you to accurately report, benchmark, and analyze outcomes and performance for value-based care. By measuring your success, you’re able to make the strategic decisions necessary to improve performance, grow your practice, and maximize your revenue.

The Most Valuable KPIs for Independent Medical Practices

To combine clinical, operational, and statistical data/trending to get the best picture of your practice’s financial health, a handful of the KPIs you should be tracking right now include:

1. Accounts Receivable

The money owed to your practice by either patients or payers has a time value that can’t be discounted. The longer this money sits uncollected, the longer you’re unable to use it to pay your staff, your rent, and yourself and may lose it partially or entirely as bad debt.

Tracking your accounts receivable allows you to determine which payers maintain the top balances and the average number of outstanding days per payer, as well as the typical insurance and patient aging.

2. Appointments and No-Shows

Patient appointment volume and mix make up the bread and butter of your practice. Therefore, tracking the number of new patients you receive per month and the sources that typically result in referrals can allow you to make future revenue projections and focus on cultivating an increasing number of referrals.

Additionally, it’s vital to realize that just as appointments are what your practice requires to thrive, with no-show rates as high as 30% across the nation and costing your practice an average of $200 each, missed appointments can result in serious financial risk and leave you struggling.

3. Charges

One of the easiest ways to ensure that your practice gets paid every dollar you have coming to is to regularly track your charges to identify ones that haven’t been billed. This allows you to recognize revenue that would have otherwise slipped through the cracks so that it can be recovered and continue to fund your operating needs.

Tracking charges also helps you determine which providers in your office generate the most revenue, which services offer the highest return per visit and more, so that you can focus more on your practice areas with the best ROI.

4. Net Collections

Unlike your charges, your net collections exclude the write-offs. This number gives you a picture of exactly how much you receive out of the total billed, and the higher the better. It can also help you determine the effectiveness of your practice’s current claims follow-up procedures so that they can be adjusted accordingly.

Ideally, your net collections should fall between 96 and 98% to remain financially viable.

5. Claims Follow-up

While your comparison of net collections to charges billed can begin to paint the picture of your claims follow-up, you’ll also want to track denial reports, denial rates and type by the payer and CPT codes and rejection reports.

This information tells you what isn’t being paid so that you can help prevent future denials. The average cost to work on denial is $25.

6. Staff overtime

Overtime pay can be a massive burden on your office. And the extra hours themselves can be hard on your staff and even compromise patient care. By monitoring this metric, you’re able to schedule more efficiently to reduce over time, for healthier finances, happier employees, and improved patient safety.

Drilling down to get the most from your data

It’s also critical to leverage a solution that provides a dashboard with drill-down capability for more useful and more robust reports. Drill-down capability ensures that you’re able to view the data from your practice in a detailed and thorough fashion to achieve a granular view.

Reports should be run daily, weekly, and monthly.

Examples of Daily Metrics to track are:

• Charges
• Payments and adjustments
• Balance
• Appointments and no-shows

Weekly tracking should include:

• Underpayments
• Backlogs on collections
• Backlogs of payment postings

Additional Monthly KPIs to review are:

• Accounts receivable
• Net collections with denials and claims follow-ups
• Production per provider
• Overtime
• Payment aging

Controlling your practice’s financial health with KPI dashboards

The medical landscape was already challenging for many medical practices – a situation that was only worsened by the COVID-19 pandemic. Now more than ever, it’s critical to monitor your practice’s financial health so that you can adjust quickly and continue to thrive.

Key Performance Indicators (KPIs) and KPI dashboards with drill-down capability allow you to assess your revenue cycle’s strengths and weaknesses accurately so that you can save time crunching numbers and prioritize your team’s activity and optimize your income. Remember, better financial performance begins with taking control of your data.

16,000 Physician Practices Have Closed Due to the Effects of COVID-19 – South Dakota Association of Healthcare Organizations

COVID-19’s Crushing Effects on Medical Practices, Some of Which Might Not Survive – JAMA

Missed appointments cost the U.S. healthcare system $150B each year – Health Management Technology

Healthcare IT is making rapid advancements in technology to support a medical billing company’s complex array of activities. However, the latest software and apps supposedly designed to make the processes faster and efficient are often written with distinct functions, incapable of integration. This leads to a fragmented approach for both providers and billing companies in handling their essential operations, which include eligibility & benefit verification of insurance, coding, processing claims, processing payment, and manage revenue tasks, to name a few, while strictly maintaining compliance with coding regulations, such as the ICD-10 code update. These are complex activities and require integration for a seamless workflow.

This calls for the need for a single platform that understands the drawbacks of a fragmented approach and offers an integrated interface that allows streamlined access and gives full control to its users for all functions. In simpler words, it should be a one-stop destination for your Revenue Cycle Management needs. It is estimated that the global Revenue Cycle Management Market will reach USD 90.43 Billion in 2022 from USD 45.59 Billion in 2016, at a CAGR of 12.1%. More specifically, integrated solutions are expected to enjoy the most significant jump and register the highest CAGR during this period.

Here are some benefits that you should not overlook while searching for a consolidated platform revenue cycle management (medical billing) software.

1.   Single Sign-on:  This is one of the evident and immediate benefits. You can manage multiple practices, multiple locations, numerous businesses under one login—no need to remember several different user IDs and passwords to various applications.

2.   Centralized Insurance Payer, Attorney, Adjuster, Referring Physicians, Patient, Claim, and Accounts Receivable Management: If you’ve customers in the same geography and share a common payer base, adjusters, attorneys, referring providers, etc., a common billing platform allows you to centrally manage the setup in a quick time with minimal effort versus when you have several different applications for a similar customer base.

3.   Consolidated Reporting:  With the ability to manage all practices, businesses with a single platform, another noticeable advantage is the ability to get a composite and accurate picture of your business as a whole rather than compiling data from several different applications and excel exports. The reporting filters put across multiple locations, practices, and companies get you the results on your tips just in a few minutes.

4.   Improves Billers’ Efficiency and Productivity:  The one-platform approach allows easy and quick management of billing and revenue cycle operations, thereby improving staff efficiency and productivity as the staff need not spend time & efforts in learning the ropes of multiple systems and therefore can gain proficiency with focused learning efforts on one platform. Likewise, it also reduces dependency on staff and allows improved tracking of user productivity.

5.   Time Saver:  A single platform is highly timesaving in many ways. As everything needs to be done on a single platform, a lot of time is saved from jumping from one application to another. The staff also needs to learn only one platform and gain proficiency in it. The team also gets trained in less time, and no time is wasted in continued pieces of training for multiple applications. It gives them time for other, more productive, and business-growing activities. According to CAQH data, approximately 12 minutes are taken and cost $5.37 each for eligibility and claims calls. A consolidated RCM platform can save this time and money to improve profitability.

6.   Improved billing clients’ financial performance:  A medical billing company must be committed to improving the financial performance of its clients. This can be achieved by identifying weak points, assessing the performance, and solving the issues by utilizing data analytics and preparing reports. With one platform that includes billing software and EHR, accurate and real-time data can be used to prepare reports and look for loopholes for improved financial performance.

7.   Eliminates Double Entry:  Single platform eliminates double entry chances and other errors and rejection of bills.

8.   Consistent User Experience:  Consistency in work is the most important for a user to perform at its best. With multiple platforms, the user will have different experiences while working on them. A single and consolidated platform gives the pleasure of consistency to the user and makes the work enjoyable. 

9.   Benchmarking Dashboard: It is essential for the success of any company to be informed about the feasibility and performance of its team based on the performance of its peers. A benchmarking dashboard can be a solution that allows you to compare your performance with peers to set accurate targets and make a more refined strategy. 

10.  Scalability: It becomes an added advantage if the platform is scalable and can be used in a range of capabilities as and when required, from a solo practitioner to medical billing operations management of thousands of customers.

11.  Save Operating Costs:  Another most discernible benefit of a consolidated platform is cost saving. A medical billing company does not solely work on insurance claims but has a wide range of offerings apart from billing like data analytics and report generation. Having multiple software and systems for different services will prove heavy on pocket. But a consolidated platform guarantees to be cheaper with integrated applications for numerous tasks. 

12.  Stress-free troubleshooting and support: There can be various points to require help while working on different applications. You have to deal with different customer support for different applications with varying levels of dependency and quality. But with a single platform, every trouble will be shot by a single support system. This makes troubleshooting stress free, quicker, and efficient.

All these and more benefits of a single, consolidated RCM system for medical billing companies allow seamless, streamlined, and highly efficient workflow management.

Schedule a demonstration with OmniMD RCM Solution Architect to find out how we can help you to make your operations seamless and efficient.