The importance of Revenue cycle management is something we cannot deny. But how do you know if your billing process is going on well?
Billing Performance Metrics, of course! But which ones, because there are just so many of them!
We have jotted down the standard billing metrics to make it easy for you:
- Contractual Variance
- Net Collection Rate (NCR)
- Gross Collection Rate (GCR)
- First Pass Resolution Rate (FPRR)
- Collections Per Visit
- Days in A/R
- Percentage of A/R older than 60 days
- Claims Denial Rates
- Claims Rejection Rates
Going ahead with the right metrics holds a ton of importance. The right ones help you identify worrisome trends and pinpoint areas that need to be improved.
We found these metrics to be extremely useful and important. Read on and learn on they can add value to your practice!
1. Contractual Variance
Contractual Variance is the amount you received below the amount you billed your patients. Among all the other reasons, Contractual Variance can also be affected by how you/ your billing company submits the claims.
Having a report of this metric keeps you posted on where your expected payment amount is not fulfilled. It indicated where was the payment received less from the insurance company.
Your practice should have analytics that shows you where your expected payment amount per the fee schedule is less than what was received from the insurance company.
2. Net Collection Rate (NCR)
This is a metric you do not want to miss out! NCR is calculated to learn the loss in revenue due to uncollectible debt, or other non-contractual adjustments. It is effortless to calculate NCR. It indicates the effectiveness of your practice in collecting allowed reimbursement.
You can use this metric to compare your practice with similar ones, in terms of speciality, location as well as clinical personnel.
You must consider an audit of your billings if your NCR is lower than 90-100% after write-offs.
3. Gross Collection Rate (GCR)
Simply explained Gross Collection Rate is the total payments received by you over a specific period, divided by your total charges without write-offs. It is the simplest of the billing performance metric.
For example, if you charge $200 for services provided and you receive a payment of $130, you have a 65 per cent gross collection rate.
A higher rate of gross collection indicates your fees are close to the payer’s rates, and how well you are doing at collections.
Though a higher GCR does not always mean your practice is making a profit. Every practice has a different GCR because of its various factors such as fee schedule. It is best to monitor this metric internally.
Confused between Net Collection Rate and Gross Collection Rate? Here is a blog to help you understand better.
4. First Pass Resolution Rate (FPRR)
First Pass Resolution Rate (FPRR) is the percentage of claims that are paid in a single submission. This metric indicates the efficiency of your revenue cycle management.
Focusing on insurance verification, billing, and coding would be a good start if your practice struggles with a low FPRR.
Considering medical billing outsourcing would also be a good idea. Doing what you are best at and outsourcing the rest is a practice that will benefit you in the long term!
5. Collections Per Visit
It is a good practice to keep up with your daily collections. A metric as simple as this can make a huge difference. All good companies that provide Healthcare Revenue Cycle Management use this metric. Being posted about the payment you collect on an average patient is a good way to compare your practice with the industry standard and others with the same-speciality in your area.
This will enable you to determine the appointments that are most profitable, further helping you to prioritize similar cases.
6. Days in A/R
Accounts receivable indicates the amount of time it takes for a service to be paid. Being aware of your days in A/R is important to understand your budget and determine the payment for operating expenses.
We recommend reviewing this metric every month to ensure no blockage in the payments made. This is a very important medical billing metric.
7. Percentage of A/R older than 60 days
This metric indicates the effectiveness of your billing process. It shows how well is your process in collecting payments quickly.
A sum of money delayed over 60 days indicates, increase in claim rejections, charge lag issues, first pass denials from the payer, poor collections processes in general.
8. Claims Denial Rates
The percentage of claims denied by payors. The lesser the rates, the better your revenue cycle management process is.
You can simply calculate the claim denial rate by summing up the total dollar of claims denied by the payer and further dividing it by the number of claims.
9. Claims Rejection Rates
A claim is rejected due to input errors or invalid data. It occurs prior to claim processing.
Claims rejection rates are the percentage of improper claims that are not accepted by a payer at first pass as they have not met specific payor requirements. Claim Rejections rate holds a lot of importance as a medical billing metric as well.
We hope these metrics help you evaluate your Revenue Cycle Management process better. Just in case we missed on any, feel free to add them in the comments section below.
Also, as we said above, focusing on what you are good and outsourcing the rest is the most convenient option when it comes to medical billing. We at Qodoro would love to take care of your all kind of billing needs. For more details contact us here.