How can you assess the state of your business if you don’t know what’s going on in your practice’s back office with regard to invoicing and accounts receivable? Do you meet or miss your financial objectives? And if the answer is “yes” or “no,” how will you come up with a strategy to either keep making improvements or halt a decline in profits?
It’s better to have more metrics on the state of your medical bills, your accounting team will tell you. This is why tracking key performance indicators (KPIs) for medical billing services in India will take center stage in many clinics.
Below are the most important billing and collections key performance indicators (KPIs). You can quickly determine where you need assistance the most by examining each stage of the revenue cycle.
Top KPIs To Track In Your Medical Billing
1. Monitor the bad debt rate, one of the more significant metrics for medical billing
You have undoubtedly considered this when you analyze all of the revenue coming into your practice. Not all of your patients will be able to pay their invoices on time. But one of the crucial KPIs for medical billing that you will want to track is the bad debt rate. You can measure it as a percentage. You can calculate this proportion by dividing allowed charges by write-offs for bad debts.
2. Gross Collection Rate
You may determine the gross collection rate, another crucial KPI, by dividing the number of payments received by the total amount of charges. It’s a handy metric to utilize when comparing the cash flow of your business. You can improve your prediction of the characteristics of upcoming collections by looking at the variations. The gross collection rate will always fluctuate in response to changes in the patient population, fees, and insurance providers.
3. Net Collection Rate
To determine how much money your practice is making, you will calculate the net collection rate. You can calculate it by dividing payments by all permitted charges. By comparing different groups within your organization using the net collection rate, you can spot how shifting demographics impact the percentages your teams collect.
4. Average (and Median) Accessibility Fee
What are the exact average costs for each test or admission that you make? You can forecast commissions, profits, and operating expenses by using this information to predict future costs, which is essential. You can keep track of this number using the test classifications for each addition.
5. Resolve Rate
Your practice’s resolution rate can tell you how well-behaved your personnel is at controlling the revenue flow. You can calculate it by dividing the total number of claims paid during a specific time period by the sum of all claims paid during that same time period. A higher percentage indicates a better rate. If you calculate a lower rate than you would like, it may be time to seek professional advice to see whether there are problems with how your team confirms patient eligibility or whether you are making coding mistakes.
6. Denial Rate
For your practice, a high denial rate can spell doom. You can calculate this percentage by dividing the number of claims denied by the number of claims remitted. In the Indian and US healthcare sector, this rate typically ranges between 5% to 10%. Automating your collection procedures can help many firms whose manual collections are the bottleneck.
7. How long is the account receivable period?
How many days the bills have been in accounts receivable is one of the most crucial medical billing KPIs for many clinics. You’ll have this KPI to review and enhance after dividing your ending accounts receivable by your average daily charge.
8. Unbilled claim percentage
Your clinic may see a larger percentage of unbilled claims due to a variety of mistakes. To determine this critical performance metric, divide the number of claims by the number of rejected claims. It is possible for unbilled claims to be higher because of errors in doctor’s orders, omitted (or incorrect) DX codes, and demographic errors.
9. Month-Over-Month revenue
You use month-over-month revenue to track cash according to payors, tests, and clients to obtain a better understanding of where your revenues are coming from. Perhaps the lab you use is having trouble operating effectively. Compare which clients are the most lucrative if you have the time. This KPI for medical billing services in India also aids in identifying the tests that are most difficult to obtain paid for due to issues with their medical necessity.
10. Operating Margin
Making it a practice to monitor key performance indicators will make it much simpler for you to gain a better grasp of your medical billing position. Using information about what and when to pay, who is not paying, and how these trends are evolving, you can develop strategies to enhance these numbers.
To help you do better with medical billing and collection, we at Virtual Healthcare provide a complete guide as per your requirements.
Final Thoughts
- When it comes to billing, medical practitioners must pay particular attention to the small print. In medical billing, you should ideally monitor key performance indicators.
- Monitoring medical billing KPIs will assist you in remaining informed of metrics to enhance, such as the bad debt rate.
- By using specialized software to track data like accounts receivable and unbilled claims, you can determine whether your business is profitable or not.
- Contrast variations in daily cash receipts with other elements like shifting patient volume or the hiring of new personnel.
- In addition to weekly performance, monthly trends, and quarterly reports, you’ll look at KPIs for daily actions.
So do you wish to get the best medical billing services in India? Connect with the expert team of Virtual Healthcare and improve your healthcare practices. Call now!