Do you know how your practice compares to your peers? Are you doing as well as possible? There are key performance indicators (KPIs) you can use to ensure that you are doing as well as you could be. And there are ways to track your results. To be successful you need to know where you are, where you are going, and how to adapt.
"Knowing your practice means knowing your position in the marketplace by understanding how you fit in and can thrive in your community," says consultant Cheryl Bisera. "I’ve seen a physician-owner focused only on ways to increase revenue without looking at the data and the community factors. After making drastic changes and purchases in somewhat haphazard efforts to improve cashflow, their position was compromised and money was lost. Some other examples of adopted changes that I have seen not work out when proper ‘homework’ wasn’t done beforehand include the addition of weight-loss programs and products, building an in-house lab, location change, expensive aesthetic equipment purchases and adopting membership fees. It’s crucial to look at the data and understand your practice, your payers’ contracts, your position in your current market, and your community demographics before making major practice changes.”
Keeping your finger on the pulse of your independent practice requires the tools to get you the right data in the right format at the right time.
Ideally, you need:
- A dashboard that provides easy-to-manage tasks so you can stay on top of getting paid
- In-depth reporting tools and billing analytics that show you exactly how you are doing
- The ability to access your tasks and reporting from anywhere at anytime
"Today's practice management systems and EHRs make it easier than ever before to track key practice metrics," says Laurie Morgan, MBA, Senior Consultant and Partner at Capko & Morgan. "But you have to keep the old adage about "garbage in, garbage out" in mind. The reports are only as good as your data capture. One example of a lost opportunity to be able to easily do analysis is uploading scans instead of entering info in a structured format. Another is not entering fee schedules from payers. It's a bit tedious to do, but once it's done, it becomes much easier to keep an eye on, and evaluate, your payers."
Once you know where you are you can set goals to improve. Here are some industry standard best practices you can shoot for:
- Less than three days from time of service to claim submission
- Average days in A/R less than 40
- 85-90% of claims paid in 45 days or less
- No more than 15% of A/R over 120 days
- Total unpaid claims less than 4%
- Denial rate of 4% or less
- Net collection rate of 96% or better
By improving the overall efficiency in your practice through automation and mobility, you get to know the true health of your practice. Then, you can work to achieve metrics like these.
If you are looking to get started and do a better job at knowing your practice, ask yourself some initial questions:
- Do you know your basic KPIs like days in A/R and denial rate and where to find them? If not, ask your vendor to point you to the right reports. Ideally, your software should offer some standard reports and even a dashboard of key indicators for easy access. Run reports to show your current baseline for the metrics above. Set realistic goals. If your denial rate is 10%, you probably won't get it down to 4% or less in a month or two. Try six months to a year and create a path to get there.
- Are you getting your claims submitted fast enough? It shouldn't be hard to find out how long it takes to submit claims from the time of service. Again, once you know, set realistic goals to get to three days or less. The best case is getting them in the same day. Your software may have tools that can help. For example, if the delay is because you don't use an EHR, find out if there is an alternative way to electronically capture charges and speed time to submission.
- Are you collecting everything you are owed? As Laurie Morgan mentioned above, it is important to keep fee schedules up to date and review your contracts. Use electronic remittance advice to process insurance payments to help ensure accuracy and catch problems with claim payments. Knowing your payers helps you decide who to stick with and whether or not to cut loose if something isn't working out.
- How are you doing with patient collections? Patient collections now makes up about one-third of your revenue. Are you collecting all you could be? Are you spending too much time collecting after the appointment when you could be doing more a check in? Start with a solid patient financial policy and lay out exactly what is expected from patients. Share it with patients and train your staff. You can even try role playing to help them get more comfortable asking for payments up front.
These are just some of the important questions you need ask yourself about how well you know the state of your practice. And the suggestions here are just a starting point. For more tips to independent practice success, download 8 Ways to Keep Your Name on the Door.