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As a healthcare provider, monitoring your business' performance while maintaining exceptional patient care is vital to your success.

Taking a proactive approach to your medical billing processes can help prevent problems before they happen, and ensure that you’re properly reimbursed and achieving your desired goals for greater efficiency. A data driven approach can help you gather and interpret the right information and give you the ability to make more informed decisions.

Here are 5 Key Performance Indicators (KPIs) you should be tracking to measure the financial health of your business.

  1. Days in Accounts Receivable - Accounts Receivable (A/R) measures how long it takes for a service to be paid by the responsible parties. The outcome will vary by specialty and payer, but typically A/R greater than 50 days should be a red flag. 
    How to calculate: Total Accounts Receivable / (12 months of Gross Charges/365)
  2. Percentage of A/R Greater than 120 Days - This is a great indicator of whether or not your patients and insurers are paying you in a timely manner. This percentage represents the amount of receivables older than 120 days. A/R greater than 25% can be an indication that there are claim denial and follow-up issues or an inefficient patient payment process. 
    How to calculate: Total A/R over 120 days / Total A/R
  3. First Pass Acceptance Rate - Your first pass acceptance rate is the percentage of claims that are paid after being submitted the first time. If your business struggles with a low F.P.A. Rate, you should focus on insurance verification and billing and coding to create a more effective Revenue Cycle Management (RCM) process. 
    How to calculate: # of Claims Paid on First Pass / Total # of Claims Submitted (for a specific time period)
  4. Net Collection Rate - This metric is a measure of a practice’s effectiveness in collecting all legitimate reimbursement. It’s often used to see how much revenue is lost due to factors like uncollectible debt, untimely filing, and other non-contractual adjustments. If your NCR is lower than 95 -100% after write-offs, this is an indication of poor performance. 
    How to calculate: (Payments / (Charges – Contractual Adjustments)) * 100%
  5. Denial Rate - The denial rate is the percentage of claims denied by payers, which provides insight into how efficiently your claims process is operating. A denial rate greater than 10% is a sign that you need to improve your RCM process - from eligibility to coding and billing. 
    How to calculate: Total # of Claims Denied / Total # of Claims Submitted (for a specific time period)

Calculating this data manually takes time and leaves too much room for human error and data manipulation. Having a practice management software that captures data and incorporates analytics capabilities allows users to gain actionable insights and identify revenue opportunities.

Our integrated Financial Insight Tools & Analytics provides a 360 degree visibility into the health of your business, so you can quickly understand trends and take appropriate action to optimize your performance. Key Performance Indicators are displayed in a dashboard, with drill-down capabilities so you can accurately isolate problem areas and quickly address them.

Learn More about CollaborateMD’s Financial Insight Tools below.

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Take control of your data, and start leveraging the key medical billing metrics to increase profits and productivity.