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Will You Add? - Electronic Medical Billing Software and Service Performance Metrics
Deciding to get a franchise is only the first of several major decisions a prospective franchisee will have to make. The next is determining the best franchise opportunity.The best franchise opportunity is a totality of many factors. These factors are like parts that make up a whole. They work together to achieve a beneficial result.Foremost of these factors is the prospect’s financial capability or ready access to financing since a large amount of money is required for the franchise fee, down payment on the lease, and other expenses. In addition to being financially ready, he should make a complete self-examination to determine his personality and preferences so that he can find the right kind of business that will match his style.Preferably, the prospect must have conducted his own research
Number of days in accounts receivable = (Accounts Receivable / Average Charge) x 365
This metric too depends on medical specialty, patient demographics, payer mix, and CPT sample. Another downside is that this metric is sensitive to provider as it counts the lag time of unsubmitted claims for services already delivered. This lag time roughly averages across all
Advertising can not fix a broken business. Oh, you might draw potential customers in the first time through advertising, but from that point on it's pretty much that customer's Personal Experience Factor that determines whether she'll be back, or not.Advertising can't correct your company's problems. As my dear, sweet, saintly old grandmother, Fanny McKay, used to say: "Wishin' don't make it so, and neither do massive amounts of gross ratings points."Today brought to conclusion a 26 week test that further proves this point.Here are the facts: The advertiser is a gentleman who came out of retirement to operate a small service business. He truly is a craftsman. He doesn't intend to work many hours. He's open from 9:30 am to 2:00 pm, and never open on weeke
Using appropriate metrics helps improve policies and procedures, shorten revenue cycle, reduce patient complaints, improve financial performance and compliance, increase cash flow, reduce bad debt, identify areas of potential growth, improve employee morale, increase productivity, and reduce costs. Useful metrics must be comprehensive and simple. They must combine both complete end-to-end processes and their individual components. Metrics must be used consistently over time and compared to standards. Obviously, different standards apply to different medical specialties, patient demographics, payers, and samples of CPT codes.
Medical billing metrics typically include compliance, cash balances, charges, accounts receivable, and collection ratios to help monitor cash flow. This article focuses on performance metrics. For discussion of compliance program, see companion article on Medical Billing Compliance.
Collection Ratios
Traditional metrics include gross and net collection ratios. Both metrics are subjective to individual practice because they compare (often arbitrary) charges to (allowed) payments. (Net collection rate is defined as a ratio of Total Collections and Total Charges less Adjustments. Gross collection rate is defined as a ratio of Total Collections to Total Charges only.) According to Medical Group Management Association (MGMA) 1998 Cost Survey, adjusted fee-for-service collections (net collections) for family practices in 1997 averaged 98.65 percent. A declining net collection ratio may be symptomatic of increased contractual write-offs or insufficient number of denial appeals. This metric is especially useful in the absence of modern computer technology, when comparison of every payment to allowed amount is impossible, or when appeal process of denials is too expensive. Otherwise, the use of charges in defining gross and net collection metrics precludes them from productive discovery of process improvement opportunities.
Days in Accounts Receivable (DAR)
A growing number of days in accounts receivable are symptomatic of a faulty billing process. One way to determine DAR is to count days from the date of service to the date of payment for every claim and then average across all claims. A simpler way to compute average number of days in accounts receivable by taking a ratio of accounts receivable to average daily charges, or
Number of days in accounts receivable = (Accounts Receivable / Average Charge) x 365
This metric too depends on medical specialty, patient demographics, payer mix, and CPT sample. Another downside is that this metric is sensitive to provider as it counts the lag time of unsubmitted claims for services already delivered. This lag time roughly averages across all
By the year 2025, the U.S. population is expected to increase by 25%, according to projections. This puts the nation on a growth path similar to the one experienced just after World War II, when the GIs came home and helped create the Baby Boom in the 1950s and 60s. This, and the fact that Americans are living longer, means that nearly every U.S. market segment will expand in numbers over the next 25 years.“This [population] growth will combine with increasing diversity to create an ever-growing list of market segments,” says Josh Calder, chief editor of the Global Lifestyles project, a research venture of an Arlington, Virginia-based consultancy, Social Technologies. “I saw a professionally made bumper sticker the other day that said, ‘Proud to be Sikh and American.’ Such niches driven by eth
Medical billing metrics typically include compliance, cash balances, charges, accounts receivable, and collection ratios to help monitor cash flow. This article focuses on performance metrics. For discussion of compliance program, see companion article on Medical Billing Compliance.
Collection Ratios
Traditional metrics include gross and net collection ratios. Both metrics are subjective to individual practice because they compare (often arbitrary) charges to (allowed) payments. (Net collection rate is defined as a ratio of Total Collections and Total Charges less Adjustments. Gross collection rate is defined as a ratio of Total Collections to Total Charges only.) According to Medical Group Management Association (MGMA) 1998 Cost Survey, adjusted fee-for-service collections (net collections) for family practices in 1997 averaged 98.65 percent. A declining net collection ratio may be symptomatic of increased contractual write-offs or insufficient number of denial appeals. This metric is especially useful in the absence of modern computer technology, when comparison of every payment to allowed amount is impossible, or when appeal process of denials is too expensive. Otherwise, the use of charges in defining gross and net collection metrics precludes them from productive discovery of process improvement opportunities.
Days in Accounts Receivable (DAR)
A growing number of days in accounts receivable are symptomatic of a faulty billing process. One way to determine DAR is to count days from the date of service to the date of payment for every claim and then average across all claims. A simpler way to compute average number of days in accounts receivable by taking a ratio of accounts receivable to average daily charges, or
Number of days in accounts receivable = (Accounts Receivable / Average Charge) x 365
This metric too depends on medical specialty, patient demographics, payer mix, and CPT sample. Another downside is that this metric is sensitive to provider as it counts the lag time of unsubmitted claims for services already delivered. This lag time roughly averages across all
Simply put, a corporation is a form of business entity. You probably already know this, so this article delves into a few of the particulars.Separate EntityFor legal purposes, a corporation is considered a separate legal entity from those forming it. Although it is not a living person, a corporation generally has the same rights. It can own property, enter contracts and claim constitutional rights. Unluckily, a corporation also must pay taxes like you and me.Unlike each of us, a corporation can “live” for 100 years, 200 years or more. Certain forms of corporations were known to exist as far back as in the days of Ancient Rome. Despite it’s gladiator tendencies towards other companies, Microsoft was not the first corporation.State of IncorporationThese days, state law authorizes and
Collection Ratios
Traditional metrics include gross and net collection ratios. Both metrics are subjective to individual practice because they compare (often arbitrary) charges to (allowed) payments. (Net collection rate is defined as a ratio of Total Collections and Total Charges less Adjustments. Gross collection rate is defined as a ratio of Total Collections to Total Charges only.) According to Medical Group Management Association (MGMA) 1998 Cost Survey, adjusted fee-for-service collections (net collections) for family practices in 1997 averaged 98.65 percent. A declining net collection ratio may be symptomatic of increased contractual write-offs or insufficient number of denial appeals. This metric is especially useful in the absence of modern computer technology, when comparison of every payment to allowed amount is impossible, or when appeal process of denials is too expensive. Otherwise, the use of charges in defining gross and net collection metrics precludes them from productive discovery of process improvement opportunities.
Days in Accounts Receivable (DAR)
A growing number of days in accounts receivable are symptomatic of a faulty billing process. One way to determine DAR is to count days from the date of service to the date of payment for every claim and then average across all claims. A simpler way to compute average number of days in accounts receivable by taking a ratio of accounts receivable to average daily charges, or
Number of days in accounts receivable = (Accounts Receivable / Average Charge) x 365
This metric too depends on medical specialty, patient demographics, payer mix, and CPT sample. Another downside is that this metric is sensitive to provider as it counts the lag time of unsubmitted claims for services already delivered. This lag time roughly averages across all
People are sick of conventional advertising. Let’s face it, most of today’s ads aren't working or, at best, aren't generating sales. So marketers need other methods of communicating the product’s worth to the consumer. The package becomes an obvious and valuable means to that end. The point is if someone doesn't pick up your product they are never going to buy it. That's where the packaging as an advertisement comes into play. How can you engage the consumer at the beginning of the product relationship? The package is your silent salesperson and it better have the right message delivered to the right audience -- no matter what product is inside. It's all about the package (or should be) and who buy's it and why is it purchased.Understanding and cultivating the consumer is an ongoing task. Consumer preferences
Days in Accounts Receivable (DAR)
A growing number of days in accounts receivable are symptomatic of a faulty billing process. One way to determine DAR is to count days from the date of service to the date of payment for every claim and then average across all claims. A simpler way to compute average number of days in accounts receivable by taking a ratio of accounts receivable to average daily charges, or
Number of days in accounts receivable = (Accounts Receivable / Average Charge) x 365
This metric too depends on medical specialty, patient demographics, payer mix, and CPT sample. Another downside is that this metric is sensitive to provider as it counts the lag time of unsubmitted claims for services already delivered. This lag time roughly averages across all
Effective use of competency frameworks provides employees with a clearly-defined set of personal development objectives and managers with a consistent measurement tool that could be used across geographical, cultural and work boundaries.The concept is simple. To complete any task, people need to have the behaviour, skills and knowledge to undertake the task. Defining the behaviour, skills and knowledge (competence) to undertake a set of tasks (a job) and measuring the competence of people allows managers and employees to understand the gap between desired and demonstrated competence and develop a plan to close the gap.Many organisations however fail in their attempts to build a framework to proactively manage competencies.The major reason for failure is that competence frameworks are developed an
Number of days in accounts receivable = (Accounts Receivable / Average Charge) x 365
This metric too depends on medical specialty, patient demographics, payer mix, and CPT sample. Another downside is that this metric is sensitive to provider as it counts the lag time of unsubmitted claims for services already delivered. This lag time roughly averages across all payers making DAR an effective comparison metric between payers for individual provider but invalidating it across multiple providers.
One obvious advantage of DAR metric is its independence of charges. The averaging feature of this metric eliminates sensitivity to specific day or CPT but also hides the behavior shape of the accounts receivable curve.
First-Pass Pay (FPP Rate) and Denial Rate
FPP is the percentage of claims paid in full the first time upon submission (subject to federal or state timely payment regulations: 15 days for electronic submission and 30 days - for paper).
Denial rate is the complementary metric to FPP rate. It counts the percent of claims that require followup and therefore cost more to process. Followup may take the form of a phone call to payer to discover a lost claim or to receive interpretation of denial message, correction of earlier submitted data, resubmission of the original claim, consultation with the provider and medical notes, or denial appeal.
Both FPP and Denial rates are very important metrics often used for billing process improvement. The upside of FPP/Denial metric is that it is charge-invariant but its downside is that it hides the differences between process imperfections on the claim submission and claim payment sides. To identify patterns of problem CPT codes or payers, FPP/Denial metric needs to be computed and compared across all pairs of payer-CPT code, which is a standard feature for modern billing technologies.
Patient Liability
Percent of Patient Liability is the ratio of patient responsibility to total billed charges and it roughly reflects patient deductibles. This measure is important in measuring front office function as it has little to do with clean claim submission or effective followup.
Percent of Accounts Receivable Beyond 60, 90, and 120 Days (PARB60, PARB90, and PARB120)
PARBX resolves the sensitivity issue of DAR metric and offers simple and charge-invariant metric of billing process. Its graphic representation has a skewed bell shape. Its steepness represents billing process quality: a steep curve and thin tail means healthy billing process, while a flat bell and a fat tail means billing problems.
According to the MGMA survey, 25.35 percent of the average family practice's accounts receivables were more than 120 days old in 1997. This number has improved down to 17.7% in 2004.
In summary, comprehensive and charge-invariant metrics, such as PARBX, are more informative and objective than collection ratios. However, these metrics alone fall short from identifying specific areas for billing process improvement. Mode
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