A monthly report should provide data associated with Key Performance Indicators for operating a pediatric practice. Some of the Key Performance Indicators (KPIs) to monitor via the monthly report include:
- Average AR Days:
Average Accounts Receivable (AR) is a measure of, on average, how fast the practice is being compensated for services performed. The lower the number, the faster the practice is being paid. Typically, AR days are between 42-60 for medical practices. Ideally, a pediatric practice should average less than 30 AR days. Two factors to consider that influence the AR days include — (1) how fast the providers close their charts so that the claim may then be billed for and (2) the ability of the billing team to process and obtain payments for the respective services. Ideally, charts should be closed within 24-48 hours, with a common metric of 90% of charts being closed within 72 hours. Practices should rarely have open charts after 1 week since the initial encounter. If your practice is challenged with closing charts, we recommend discussing this during the annual business review so that we may provide some additional resources, such as supplementary training with one of our trainers to help with your specific needs.
- Monthly Visits by Provider:
A practice KPI includes the number of visits per provider. If the well/sick ratio is constant over time, then a change in the number of patient visits links to the future revenue change per provider. While value based care is still in the early stages, most pediatric practices receive the majority of their revenue based on treating patients in a Fee for Service model. For this reason, the practice should monitor visits by provider, monthly, as well as the overall visits for the practice. We recommend evaluating this over a period of time (6 months or 12 months) to identify said average per pediatric provider. Reviewing this on an annual basis may provide some insight into how full the schedule is, and if the practice should consider the addition of another provider.
- Monthly Billed Amount and Paid Amount Per Month:
The pediatric practice leaders should review the monthly trends related to billed services and paid services. With that data, the practice should identify the linkage to the number of visits per month. Factors that can increase the billed and paid amount include: the ratio of well to sick visits, payer mix, coding, and the medical billing collection rate. If the payer mix is constant, alongside a consistent well/sick visit ratio, then changes in coding can increase or decrease the billed amount and/or revenue received per month. The providers select the level of coding since they are meeting directly with the patient. They should improve their knowledge around coding so that they may select the optimal code(s) based on the service provided. Additionally, a strong billing team can enhance revenue by optimizing the collection rate from both insurance companies and patients.
- New Patient Visits:
New patient visits to the practice show how fast the practice is growing. Ideally, most of the new patient additions should be under 5 years of age; the segment with the most new patients per month being under 1 year of age. If the practice has a slow growth rate in new patient visits, or a high amount of new patient additions over the age of 10, then the practice should identify options for enhancement. This may mean providing background on the practice to OBGYN groups within the area, as well as providing/hosting prenatal counseling. Other factors that can influence the growth of a practice include: non-participation with certain payers within the area, hours of operation (Mon. – Sat.), the number of other pediatric practices in the same geographical location, in addition to the number of surrounding retail clinics and urgent care centers. With busy parent schedules, providing optimal access to parents and patients greatly impacts the choice of which pediatric practice they may join. We have tools in PediatricXpress that provide new patient growth data per month, organized by age group (e.g. # of new patients under 1 year, 1-4 years, 5-9 years, 10-14 years, 15+ years). On an annual basis, we provide a review of these KPIs, in addition to discussing methods to enhance the practice’s performance. These additional KPI discussion points include, but are not limited to:
- Average Reimbursement Per Visit:
This KPI can be measured by identifying the total revenue for a select period of time (recommended 12 month increment) divided by the total number of visits (well visits, sick visits, and other visits). The average reimbursement per visit is strongly influenced by a multitude of factors – the payer mix, the contract rate with payers, practice collection rate for insurance claims and patient statements, optimal coding, the ratio between sick visits and well visits during a respective period of time.
- Contract Rate Per Payer:
Contract rates for the top payers should be reviewed on an annual basis. Contract rates, alongside fee schedules, vary from payer to payer. These numbers are influenced by the location of the pediatric practice, given that reimbursement rates for CPT codes differ by geographical region. Practice leaders should have discussions about the payers with the lowest reimbursement rates, and then make a decision regarding renegotiation of contract or termination of contract. While some payers are below the average, there may be other factors of importance to the practice that influence keeping such payers. We hold the belief that this is something that should be reviewed on an annual basis. And, for that reason, we include an analysis of this as part of the annual business review for your respective practice.
- Collection Rate of the Contract Amount:
Each CPT code has a contract reimbursement rate per insurance company. Although an insurance company usually has one contract rate per CPT code, the amount paid by the insurance company varies depending upon the patient’s plan. Please see the below example.
CPT code 99214 is billed to the insurance carrier for a total charge of $150. The contract rate is $100. Patient A may have the entire $100 covered under their respective policy, while Patient B may only have $50 covered under their insurance policy. Patient B is left with a patient responsibility of $50.
The KPI for collection rates should be measured for all insurance and patient payments. During the annual business review, we discuss the collection rates for your practice. The account manager identifies specific actions that have been taken for your practice (e.g. number of phone calls made, number of patient statements sent), results obtained, and recommendations to enhance the current approach. Additionally, we review your practice performance in comparison to national benchmarks.
While there are additional KPIs to evaluate, those described above are important for practice leaders to monitor in order to maximize practice revenue.