Revenue metrics can provide insights far beyond basic profit margins. Patient engagement, insurer relationships, human resource management, and infrastructure can all be optimized with a more robust revenue metric model – so long as you can effectively track the revenue cycle data.
Why revenue metrics are important
The more refined your revenue management, the stronger your practice will be – so your patients receive better care and your staff feels more inspired at work. But the path to achieving this is different for every practice.
Depending on your specialty and patient demographic, your business might need to operate in a radically different way from those of your colleagues.
Benefits of tracking revenue metrics
When you track your business’s revenue data, you’re getting a more clear view of how your practice actually operates – and how that differs from the ideals you set – so that you can lead everything toward greater harmony.
By streamlining workflow, you’re freeing up your staff to work on higher priorities and more challenging projects. By removing reimbursement obstacles, you’re creating a better experience for patients and ensuring the longevity of your practice.
Effective practice metrics require strong data
Before you get started tracking revenue metrics, make sure the data you’re working with is accurate and current. Hopefully, your accounts receivable department has accessible files for each patient’s account – and ways to track composite data as well.
If you’ve got an in-house spreadsheet wiz, then spreadsheets will suffice. But when compiling this data, take note of how well the organization suits your purposes. An online management platform might better serve you.
Practice revenue overview metrics
Macro-level metrics show how well you’re covering the financial and operational baselines.
These are the major accounting metrics that are common to most any Accounts Receivable department. If your practice is already up and running, you’re probably tracking these too:
- Total charges
- Total accounts receivable
- Claim volume
- Collectible vs non-collectible adjustments
- Collections rate
- Collections per visit
- Days to insurance payment
- Bad Debt
Questions to consider with these metrics: How exactly are you collecting them? How often are they being updated? And how many labor hours go in to the calculations?
Collecting data around your billing process will empower you to optimize it on the admin side. This applies to claim workflow as well as patient intake.
Processing metrics can include:
- Average number of days to charge posting
- Statement count
- Number of patient visits
- Patient no-show rate
Troublesome patient no-show rates likely point to a scheduling or patient engagement issue. Long delays between patient visits and charges posting may indicate workflow problems in your billing department.
There are plenty of simple solutions to such issues. Identifying the problems is sometimes the bigger challenge.
Revenue cycle metrics
Revenue cycle metrics provide a more granular view of financial operations.
Invoices age allows you to see how outstanding payment is from patients and insurers. Typically, aging is broken out into 30-day clusters:
- Aging 0-30
- Aging 31-60
- Aging 61-90
- Aging 91-120
- Aging 121-360
- Aging 361 Plus
The majority of your invoices are probably in the Aging 0-30 category – that is, your outstanding invoices are almost entirely the new invoices. The percentage in each age category should drop steadily from there. Ideally, the Aging 91-120 group should account for less than 10% of total invoices.
With older claims, it’s important to be proactive in trying to collect. But it’s also worth analyzing the claims themselves. In any particular later-age group, you might find certain commonalities: maybe they’re all appeals with a particular insurer, or awaiting refunds from your own office. Sorting this information will be key in optimizing your revenue cycle.
First Pass Acceptance Rate
This will show you how frequently claims go through with no additional attention required. It’s a metric worth focusing on, as it affects revenue as well as labor costs. A rate of ~90% is really the goal – though it’s common for practices to be somewhere around 70%.
There are plenty of unique reasons for a claim rejection. Here are just a few of them:
- authorization time-outs
- improper coding
- patients switching insurance plans
- absence of referral documentation
But first acceptance rate issues really point to structural problems in your billing process. Somewhere along the workflow, there is a continual failure to update and track the necessary information.
Are Your Practice Metrics Healthy?
The revenue cycle of a physician’s practice is a window into its overall operational health. In order to assess that health, you need the clearest view possible. This means accurate, updated data and analysis on granular levels, as well as the macro bottom-line metrics.
These metrics will show you which of your systems need the most attention. The data for these metrics already exists in your Accounts Receivable departments – the trick is to identify it, track it, update it, and analyze it.
That’s where a revenue cycle management platform comes in: automating these billing and data processes while making sure you stay up to date with changes in insurer policy and legal protocol. Quatris Healthco provides technology and services to help your practice thrive across each of these metrics – explore your options today.