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Optimize your Revenue Cycle with 5 Key Medical Billing Metrics

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.


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



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