Centricity Practice Solutions can produce scores of reports to measure medical billing financials and help you gauge the health of your practice. While it’s always a good idea to keep an eye on several different metrics, there are a few numbers you should watch more closely than others. Here’s are few items the Health 1 medical billing specialists pay attention to when they measure practice financials.
Accounts Receivable Aging Report
This is one of a handful of great overall medical billing financials to measure the health of the practice and how your medical billing department is performing. This macro view of your financials shows what’s been billed, what’s been collected, and how long it’s taking you to get paid. The A/R aging report works best paired with other, more granular reports such as aging and payment reports by payer, which helps you identify trends and potential problems.
Ideally, the vast majority of your claims will be paid and resolved before 27 days, although this number may be higher if your patient population includes a high percentage of worker’s comp, auto accident, and out-of-state patients.
Our medical billing service checks aging by payer, as well. If one payer has a consistently higher percentage of claims unpaid after 30 days, it’s time to investigate underlying issues such as coding, documentation, prior authorization requirements, and other potential workflow issues that is causing claims to get hung up. Too often, practices lack the time and expertise to drill down into these rejection issues, which is where a medical billing service can pinpoint bottlenecks and reimbursement issues.
Gross and Net Collections Ratio
This is a deceptively simple set of numbers that gives deep insight into your medical billing performance. Gross collections ratio is simply the actual amount you collect compared to total charges, and it helps you evaluate your fee schedule, especially when compared to national benchmarks for your specialty. But when you combine it with your net collections ratio, which is what you collect from each payer after deducting contractual dis-allowances. This figure is more important than ever, because it shows where you may be falling short in collecting everything you are due under a particular contract.
Certain payers are notorious for disallowing charges that should be covered under the terms of your contract (Medicare, Blue Cross, Blue Shield, for example), and an experienced biller can identify problems when net collections lag and take steps to dispute and/or resolve these issues.
Payer Mix Ratio
This is an especially important report to watch on a regular basis, because it helps you identify who are your most valuable insurance partnerships and which aren’t generating revenue that really impacts the bottom line. This ratio is basically the percentage each carrier contributes to your practice’s total revenue pie (individual payer receipts/total practice receipts), and it’s a useful metric when analyzed in tandem with the revenue per patient for each insurance contract.
Why is it important to look at both? If you have a payer that represents 40% of your revenue, but revenue per patient is half that of another carrier that represents just 10% of your total, you might want to look at what adjustments you’re taking, for example, or how to increase the patient mix in favor of the higher revenue carrier. These numbers help you accurately value your insurance relationships and understand how each truly contributes to your overall financial picture.
If you have questions about your Centricity Practice Solutions financial reports and collections, the billing experts at Health 1 will help you identify the important medical billing financials for your particular practice.