In order to boost income in today's payer policy landscape, physician practices must place a strong emphasis on core business and practice management approaches.
While these foundational aspects may not have changed much over the years, the danger of falling revenue has brought them back into the spotlight. Fundamental practice management and business strategies, which include a wide range of key performance metrics, are critical to any medical group's long-term success and income.
Efficient billing and collections are crucial to the success and profitability of your practice, and any efforts you make to improve efficiency can help you better capture the money you earn while avoiding any mishaps.
In this article, we provide medical practices with 10 financial operation benchmarks to target for maximum efficiency.
10 Benchmark Targets to Increase Your Medical Practice’s Revenue
1. Days in A/R
For medical practices conducting mostly electronic billing, all A/R should be done within 20 to 35 days. This includes submitting electronic patient statements.
2. Insurance Verification
You don’t always get authorization the moment you make the call. But as soon as insurance verification is completed, you need to turn around and call patients to notify them of their responsibilities. This should be done at least three to five days prior to their date of service.
Medical transcriptions are important medical records that help doctors keep track of their own patient records, insurance claims, and relevant medical charts. Doctors and the relevant hospital staff should always try to complete these within 24 hours or less after the patient visit.
As a part of your online systems, all medical coding should be completed within 48 hours or less the moment the relevant medical records are generated. The claims should also go out the door the same day the case is coded and charged.
5. Claims Billed Out
Claims should always be billed out within 24 to 72 hours from the date of service with the higher-end target to account for possible delays caused by issues such as the time needed to resolve any discrepancies concerning procedure information or slow dictation from doctors. However, do note that 72 hours should be the exception rather than the rule.
To increase your medical office’s efficiency, you may want to consider a more aggressive benchmark with the understanding that occasional issues will hold up the process and target to have claims sent out within 24 hours.
6. Claims Follow-up
This must be completed within 28 days for those that remain unpaid. If it lapses beyond that, all claims need to be touched upon at least once every 28 days with the payor until the claim is resolved.
For practices filing mostly electronic claims, you may want to keep that benchmark lower. If you know you’re getting paid every ten days from a payor, then you should have a 15-day review if you haven’t received payment.
7. Denial Rate
This should be between 1 to 2 percent. Tracking the reason you are not getting paid the first time a claim is billed is very important. It’s essential to identify the reason for denial and fix whatever the problem might be so that future claims will be paid the first time you bill, which will reduce the expense associated with claim filing and give you access to cash that can be used for other expenses.
8. Accounts per Collector
When reviewing your medical practice’s outstanding A/R, you should have one biller assigned per every 800 accounts, with the business office manager monitoring the collection activity closely to ensure accounts are being worked at a minimum of every 15 to 30 days. If your practice has 2,400 outstanding accounts, and a biller can only follow up on about 800 accounts per month (or 40 accounts per day), you will need three billers to work through the entire receivable in one month.
9. Cash Collections as a Percent of Net Revenue
At a minimum, the collection goal should be 100% of your monthly average net revenue for the preceding three months. Track and trend this goal monthly. If you are short on your overall collections for the month, the collection shortfall should be added to the next month’s collection goal.
10. Aged A/R (Greater than 60and/or 120 days)
Sometimes, having aged A/R is unavoidable for large medical practices. However, a good rule of thumb to follow is to have only about 25% of your A/R in the 60-day bucket, and less than 10% in the 120-day bucket.