Obviously, the most important aspect to your Centricity or EPIC medical practice is providing the best care to your patients. However, we all know the business side of your practice is equally important for sustainability. So it’s essential to keep an eye on how well your Centricity medical practice is performing financially. How efficiently is your practice running? Looking at Key Performance Indicators (KPIs) monthly, quarterly, and yearly can help you see trends in how well your practice is meeting different business and financial goals.
Key Performance Indicators #1 – Average Days in Accounts Receivable
The number of days a claim spends in accounts receivable (A/R) will show your medical practice how efficient your revenue cycle is. You can break this KPI down further by looking at the total payer A/R and the total patient A/R. If you have a lot of patients with outstanding accounts and high balances, or if certain insurance companies aren’t paying claims, your practice could be in financial trouble.
What can you do to remedy the situation? If you have cash-only patients, consider asking patients for payment up-front. For insurance companies that aren’t paying claims or taking a substantial amount of time to pay, follow up to figure out why this is happening so adjustments can be made to reduce the number of days claims spend in A/R.
Key Performance Indicators #2 – Total Revenue for the Practice
Changes in the healthcare landscape have led to an increase in patient payment responsibility, so it’s essential for your EPIC medical billing protects your revenue. One of the ways that you can do so is to keep track of your total practice revenue – the grand total of money that you have coming in every month. Break this down into both insurance revenue and patient revenue.
Collecting payments, especially from your patients, can be complicated if you don’t have the correct systems in place. By carefully tracking your revenue each month, quarter, and year, you can get a better look at how well you’re doing in this area. And if your total revenue is not where it needs to be, you can make adjustments throughout your practice to increase revenue.
Key Performance Indicators #3 – The Cost Per Encounter
Each time a patient comes into your office, it costs your practice money. However, it should be bringing you in more money than it costs. If it’s costing you more to see patients than you’re bringing in, there’s a big problem. This is why it’s important to know the average cost per encounter as well as the average charges per visit (calculate the cost per encounter by dividing your total operating expenses for a month by the number of office encounters).
If you find that your charges are on the low side, then practice administrators, physicians, and office managers may want to work together to reevaluate the practice’s fee schedule. You may also need to look through practice-related costs to find out where you can make cuts that will lower your cost per encounter.
Key Performance Indicators #4 – No-Show and Missed Appointment Rates
Just four no-shows or cancellations each day could cost your practice as much as $150,000 in a year, which is a huge hit to your practice revenue. This means that your Centricity medical practice should spend some time looking at no-show and missed appointment rates, so you avoid these massive losses. To figure out your no-show rate, divide the number of appointments missed by the number of patients that were scheduled. Some medical scheduling systems may also provide this data for you.
Automated reminders are one of the best ways to reduce your no-shows. Reminders the day before an appointment and text reminders a couple of hours before an appointment can help. Engaging patients in the scheduling process can help, too. An automated reminder system with a good patient reminder script can lower your no-show rate significantly, making it worth the investment.
Key Performance Indicators #5 – Claim Denial Rate
Preventing claim denials is critical for smooth revenue cycle management for your Centricity medical billing. If claims are being denied, it’s costing your office money and delaying payments. Claims may be rejected for a variety of reasons. Care might have been provided outside of network, patient eligibility may not have been checked, or a procedure may not have been coded correctly.
You can also take a look at the percentage of claims that are dealt with on the first pass, working to keep this percentage above 95%. If you have a high rate of denials, you’ll need to address your practice workflow, figure out why denials are occurring, and work on ensuring that rejections and denials are dealt with promptly and effectively.
Key Performance Indicators #4 – Number of New Patients
One of the challenges medical practice owners face is how to attract new patients. For instance in a pediatric office their patients “age out” of their practice once they turn 18 years old. This means that your practice needs to have a steady stream of new patients coming into your office to replace the patients that you are losing. Ideally, you’ll want to focus on bringing in more newborn patients so you have them for the next 18 years. Track the number of new patients you’re bringing in. Is it equal to or greater than the number of patients you’re losing? If not, then you need to make moves to boost patient acquisition to ensure the long-term success of your practice.
With a good set of KPIs in place, your medical practice can keep an eye on revenue cycle management, quickly making adjustments to enjoy improved results. If you need help reaching your financial goals, Health 1 can help. We’re experts in Centricity and EPIC medical billing, and we will make sure that your claims are handled quickly and accurately to improve revenue and profitability for your medical practice. Learn more about how we can help you track KPIs, improve billing and boost profits.