In today’s challenging reimbursement era, there seems to be no end in sight to the complexities of medical billing. Constantly changing billing guidelines, payer policies, and changed rules during the COVID-19 pandemic are making it more challenging. Rather than focussing on the performance of the overall medical billing process, understanding key medical billing metrics and improving its accuracy could produce better results. In this article, let’s understand the key medical billing metrics and how tracking them could help in increasing your practice collections.
Key Medical Billing Metrics
1. Clean Claim Percentage
When you submit a claim, it might get rejected due to inaccurate information provided while claim submission. Most of the time, claims get rejected due to inaccurate patient demographics or insurance information. When your claim gets rejected, it doesn’t reach the payers’ system, it’s stuck in the clearinghouse unless corrected. Ideally, the clean claim percentage should be more than 90 percent i.e., 10 percent of your claims are rejected and need rework.
2. Days in AR
Days in AR (Accounts Receivable) measure how long it takes for a service to get paid. When you know how many days you require a claim to get paid helps in planning the funds to pay for operating expenses. Divide total AR by average daily charges to receive days in AR i.e., Days in AR = Total AR / Average Daily Charges (90-day average). This metric should be reviewed every month to make sure you aren’t experiencing challenges in receiving insurance reimbursements.
3. Denial Rate
A high denial rate can be a disaster for your practice. Denials up to 10 percent are acceptable due to the challenging nature of medical billing. If more claims are getting denied than 10 percent of total submitted claims then it could be a cause of concern for your practice. Constantly keep track of the denial rate, and review it every week. More quickly you are working on claim denials, and more quickly you are receiving insurance reimbursements.
4. Collections per Visit
Collections per visit is another important parameter, as knowing the amount you collect on an average visit is a good way to measure your practice against the industry standard and other same-specialty practices in your area. Divide total reimbursements by total visits for a specific period of time. You will be able to highlight which appointments are most profitable, allowing you to accept more of these appointment types using this formula.
5. Bad Debt Rate
Not all of your patients will be able to pay their bills on time, as their health plan may not be active or were not covering specific services. Plus, certain claims are denied by insurance carriers which are difficult to recover. Bad debt, expressed as a percentage, is one of the essential medical billing KPIs you will want to be tracking. You calculate this percentage by dividing allowed charges by bad debt write-offs.
Constantly tracking medical billing metrics, doing it weekly, or even daily – means there is nowhere for inefficiency to hide. You simply can’t get better until you know where improvement is needed. Ultimately, that’s the goal of the key medical billing metrics – not to judge, but to improve.
Legion Health Care Solutions is a leading medical billing company that can assist you in revenue cycle functions for your practice. We constantly keep track of key medical billing metrics to receive accurate insurance reimbursements for our clients. Please call us to know more about our billing and coding services at 727-475-1834 or email us at email@example.com