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Top ten medical billing KPIs. First, let’s talk about focus. That sometimes means when you want to talk about something, it’s helpful to distinguish from what it is not. If we’re talking about medical billing KPIs, we’re talking again about medical billing, not the practice, not a facility, not provider KPIs. The difference matters.
Evaluate the practice
We’re not evaluating how the practice is doing or whatever words you want to use around the healthcare provider. Moreover, we’re not assessing how the practice is doing. We’re evaluating how the revenue cycle management, the billing department, or the billing company performs. That means we are not trying to assess or quantify things like scheduling, performance, appointment duration, patient wait times, or the time it takes to register a patient.
We’re not trying to quantify or track KPIs related to charting time, the patient workflow, capacity utilization of providers, or the clinical staff. We’re not looking at procedure mix or top CPTs. I know this sounds like heresy, but again we’re not looking at top CPTs, CPTs by the provider, or most common diagnoses. Again, I know this sounds strange because these are all things that we frequently look at when it comes to medical billing performance metrics.
What is a medical billing KPI?
We’re not looking at the lag time to get charts closed. However, this is bordering on billing KPIs (because if we don’t track this. For instance, most people will think that billing is performing slowly in getting the claim out the door. In fact, it might take three weeks for the clinician to close the chart and then less than one business day for it to get out the door from the billing department). We’re getting close, but again that’s still not a medical billing KPI. It may be a precursor or something we want to know about so that somebody doesn’t blame us.
It’s also not revenue per patient, or revenue per encounter, average collections per encounter. Why? Because this is more a function of procedure mix, and it has very little to do with revenue cycle management. If somebody does an E&M, procedures typically, or procedures with E&Ms, that radically changes how much reimbursement you get, and that has nothing to do with how well billing is performing.
Neither lifetime value nor staffing levels
We’re not looking at the lifetime value of patients. And we’re not looking at referring physicians. We’re not looking at top referral sources. Those are all marketing types of quantifications.
We’re not looking at collections by the provider. In addition, we’re not looking at RVUs or similar types of value-based or any other kind of metrics around how much work output a provider is doing. Undoubtedly, we’re not looking at annual provider workdays.
We’re not looking at staffing levels. Also, we’re not looking at the number of mid-level providers, or the number of mid-level providers per billing provider or physician, or any of those things. We’re not looking at the number of administrative people or the number of billing people per provider, none of that stuff.
What about collections?
We’re not even looking at collections. Now, this is probably where it’s going to sound like the biggest, like, “What? It doesn’t even make any sense. Invariably, we’re in the collections business. Also, we’re in the revenue cycle management. We’re trying to collect money, and you don’t even think we should be tracking collections.” I’m just saying that’s not a medical billing metric. Why? Well, despite revenue being in the name “revenue cycle management,” which is the supposed function that this whole industry is providing.
Also, the primary driver for that is most correlated with patient volume. There is some impact on how well billing performs to determine overall collections, but it’s a relatively small driver if you’re looking at regressions or the types of things that push that. So collections is not a medical billing KPI. It’s a practice KPI.
We shouldn’t even be looking at the payer mix. It has nothing to do with billing. This is entirely outside of the billing group’s control or influence. Again, you’re probably going like, “All right, now I’m calling BS on you, Sean. We’re not looking at collections. Also, we’re not looking at the payer mix. We’re not looking at CPTs. What are we supposed to be looking at?”
Stay clear on the focus
Let me go back to the focus. If the goal is to look at the top medical billing KPIs, we’re trying to evaluate how well the medical billing department, billing company, and staff are performing, not the practice. Marketing drives how many patients you get. Marketing drives the payer mix that you get. Those are top drivers for the payer. The individual physician, what types of procedures they perform, their clinical decisions drive how many procedures they do, or the average amount of stuff they do per patient encounter. Those are all things that cause revenue collections, not the billing department, a much smaller component.
What it’s not. This is a giant list of nots. I’m not going to repeat them all, but we’re not looking at those things regarding medical billing. Those are practice or provider metrics, practice KPIs.
Top ten medical billing KPIs. Sure, these things that we just talked about have nothing to do with medical billing, but they are essential. They matter. They may be metrics that should be tracked, they may be KPIs that should be tracked, but they’re not medical billing KPIs. Let’s not confuse the two. We can have practice metrics, practice performance, medical billing performance. Never the twain shall meet.
Make sure your KPIs are for billing only and related to billing and track billing performance. Don’t get distracted. Why? Because it’s easier than to get dragged into the blame game of, “How come our collections are down?” Well, your volume is down, your procedure mix stinks, your payer mix changed. None of those things have anything to do with billing. Don’t get sucked up in that. Make sure that you’re distinguishing those two and that everybody understands the difference.