Financial Metrics You Need to Know: A Surprising List

A lot of physicians don’t know very much about the billing process. They have experts on the payroll who take care of the billing and they don't have a lot of time to do more than determine that as long as they are able to keep the practice afloat and can take home a paycheck, things must be ok. I totally understand, but you may be leaving so much on the table. You need to start looking at some financial reporting.

You can pull up a lot of articles about metrics you should be looking at in your practice. A lot of these are great, but keep in mind that if these metrics don’t somehow cover all of the aspects of the financial process, you may have a false sense of how well your team is doing.

Here are 3 things that are easy to pull and will give you a lot of understanding about how well your billing team or billing service is performing.

Number of office visits written off.

If you only look at one thing, this should be it! Take a look at all of your sick and well visits and see how many of them you collect $0.00 for. This number should be ZERO.

There are a few exceptions, but so very few that you should know about every single one of them. One example may be a professional courtesy write-off. Another doctor came in with a deductible, the entire visit went to deductible and you decided to write it off. Makes sense. There are not many more examples where this make sense.

Some reasons this may not be ZERO include: missed timely filing deadline, insurance denied the claim and no one ever tried to work it out with the insurance company or the patient, the visit 100% deductible and your team didn’t collect up front. All of these reasons are UNACCEPTABLE. Don’t spend time with patients if you aren’t getting paid for it.

Insurance Accounts Receivable and the % that is over 90 days old.

This number should be under 10% and, ideally, under 5%. If it isn’t, it is taking you too long to get paid and it becomes less likely you will get paid for it at all.

Do not look at this number in a vacuum. I have seen practices where their number is under 5% but that is because things were being written off when they shouldn’t have been. Looking at this number with the number of office visits written off provides a much more complete picture.

% of Practice Revenues Coming From Patients

Look at insurance collections vs patient collections over a specific period of time. Insurance collections should represent the vast majority of all of your practice revenues and no more than 15% of your total collections should be from patient collections.

If more than 10-15% of practice revenues are coming from your patients (unless you have an extraordinary number of self-pay patients), this indicates that your billing team is not working hard enough to get in touch with the insurance company to get small issues resolved. As I wrote in a previous post (click here), the majority of denials can be resolved with a phone call to the insurance company but it is far easier to move to patient responsibility.

Of course, if you are in the habit of writing off patient balances, this could be misleading, but writing off patient balances if a topic for another day.

I know this list is very different from most of the ones you see out there. This is because 1) these numbers are far easier to calculate than some of the others (even the good ones) and 2) the numbers most billing services hang their hat on can be manipulated so easily that you can’t really trust the results. The three outlined above, though, provide a clear picture on how your practice is doing and are a great place to start if you are wondering if you are leaving money on the table.

As always, feel free to email me (emily@altussolutionsgroup.com) with questions or if you want me to detail the ways those other numbers can be manipulated – it’s fascinating!

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