Key Performance Indicators – How To Keep Your Medical Billing On Track: KPI #3

Kathy McCoy, MBA August 15th, 2011

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Savvy medical billing professionals know that timeliness, diligence and accuracy are key to bringing the maximum amount of reimbursement in the door. But trending the effectiveness of billing operations requires a more macro approach. 

In a succinct and informative video recently produced for Kareo, leading practice management expert Elizabeth Woodcock, MBA, FACMPE, CPC, presented her four key performance indicators, or KPIs, that can be used to gauge the effectiveness of any billing operation. Kareo regularly sponsors webinars featuring Elizabeth and other industry experts detailing ways to improve your medical billing and reimbursement. We’ve covered Elizabeth’s first two KPIs in prior postings to this blog: KPI #1 – Days in Receivables Outstanding and KPI #2 – Aged Trial Balance. If you’re curious about her third KPI, keep reading.

The adjusted collection ratio is a reflection of how well you are collecting contracted, agreed-upon rates, not your charges. Most payors negotiate rates that they will pay for services, and they often do not correlate to your fee schedule. Obviously, the higher the collection ratio, the better – Elizabeth uses 95-97% as the desirable metric. Why not 100%? Because the allowable charge often includes a portion that is the patient’s financial responsibility. Collecting those monies depends on having an effective effort to get patients to pay at the time of service or afterward. Many practices have a hard time doing this well. But failing to collect those dollars leaves money on the table that will never end up in the practice’s coffers. To learn more about the adjusted collection ratio as a KPI, watch the video below now.

You can also view Elizabeth’s videos on Top Three Ways To Improve Your Medical Billing and Denial Management. And be sure to join Elizabeth for a live webinar on August 25 on Everything You Need to Know About Maximizing Patient Collections.

Elizabeth Woodcock, MBA, FACMPE, CPC, is an expert, author, speaker and trainer in practice management operations and revenue cycle management whose clients include Kareo medical billing software. She is a co-author of “The Physician Billing Process: Avoiding Potholes in the Road to Getting Paid.”

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