Everyone seems to be discussing ‘metrics’ and ‘benchmarks’ these days to measure growth by comparing to the benchmarks set by national standards as well as within their own medical practices. How can you know which metrics rank higher in importance and what benchmarks to use in managing your medical practice and tracking its financial health? While the ‘trial-and-error’ method to try to determine “whatever works” for reaching established benchmarks, it can result in wasting time and losing revenue.To simplify the job of tracking as well as boost revenue, here are six of the top-priority metrics that practices should follow. With an extra 15 minutes or so each month you can easily add these to a spreadsheet and get a quick ‘snapshot’ of what’s working and what needs attention.
1. Tracking the First-pass Resolution Rate (FPRR), the number of claims paid upon first submission. The benchmark for FPRR should be at least 90 percent as this reveals just how effective your revenue cycle really is; anything below it and you will have to look deeper into your records for coding, insurance verification or other errors.
2. The number of days spent in A/R should be less than its benchmark of 50 days; preferably in the range of 30-40 days. This metric is important because it reveals the efficiency of your revenue management as this information can also show you which payers may be slower than others, thus affecting your overall revenue.
3. Figuring the Average Reimbursement per Encounter from each patient visit gives you a good idea of your benchmark as a standard. If the numbers for visits are falling below that, you’ll need to take a closer look to determine whether this is a trend and if so, what is causing the drop. One way to fix a drop in numbers is to diversify your patient mix and their payers.
4. Average revenue per day shows you whether the daily amount taken in from charges is above or under the average amounts of producing revenue – in other words, it shows how busy your practice– and you – really are. Taking into account factors such as the number of physicians working, surgery or other clinical schedules that can vary from one day to the next, it is necessary to track these over the course of several days to get a clear benchmark of the average. Significant increases can indicate that your practice is growing; drops should be promptly investigated.
5. Calculating individual category expense ratio, while a bit more time-consuming than just lumping everything together under ‘expenses’, helps pinpoint what you’re spending on individual expenses and where you may be overspending – with no benchmark really necessary for this. When added up over time, lab and related supplies, facility and personnel expenses can have a significant impact on revenues.
6. Finally, there’s net collection rate – the percentage of the total possible revenue collected of the allowable amounts. Ideally, thebenchmark should be over 95 percent; it indicates how effective your practice is at getting what’s coming and how much was left on the table.
If your metric tracking methods reveal problems with coding, timely claim submission or re-submission, consider the benefits of partnering with a professional billing and practice management service such as M-Scribe Technologies, LLC. Since 2003, M-Scribe has helped thousands of medical practices around the country streamline their billing, coding and related tasks while improving revenues.
One of our expert consultants can analyze your practice’s expenditures against revenues and focus on meeting benchmarks that boost compliance as well as income. Contact M-Scribe today at 888-727-4234 or email us at firstname.lastname@example.org for a confidential, free analysis providing solutions individually tailored to the needs of your practice.