Understanding Key Medical Billing Metrics

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Understanding Key Medical
Billing Metrics
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Understanding Key Medical Billing Metrics
In todays 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, lets 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
doesnt reach the payers system, its 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.
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Understanding Key Medical Billing Metrics
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 arent 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.
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Understanding Key Medical Billing Metrics.
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 cant get better until you know where
improvement is needed. Ultimately, thats 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
info_at_legionhealthcaresolutions.com
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