An All-in-one Healthcare Billing System

Flexible products for scaling your revenue cycle solution capabilities

Request a Demo

How Medical Billing Companies Use Data Discovery in Business Intelligence (BI)

In medical billing, we often talk about the importance of reporting and business intelligence for finding opportunities to reduce cost and increase revenue. Whether you’re a medical billing manager or the owner of a billing company, everyone employed by your company benefits when given access to data and reports related to their job performance. With that in mind, I’d like to take a step back and talk about the process that goes into creating those reports, called data discovery.

Business analytics to drive growth and show value to your clients
btnLearnMore orange

What is Data Discovery?

Data discovery is the process of collecting raw data from various sources, consolidating it into a single source, and converting it into useful information in the form of reports and visualizations. The usefulness of information is identified through recurring trends, anomalies, or predictive analytics broken down by factors like region, office, or procedure.

Data discovery can be demanding for medical billing managers when you’re accountable to both your management team and clients. Fortunately, client needs are like management needs in many ways. At a high level, clients want to see a lot of productivity reports and net gross collections, and so do billing companies. They need to know what you’re working on, changes in their revenue, and reassurance that your work is having a positive impact on their ROI.

Why is Data Discovery Important?

Data discovery is the first step into a more data-driven approach for monitoring your company’s and clients’ performance. Instead of reacting to the needs of your manager or client after the fact, a data discovery approach considers the goals and challenges of a company before building out a system for collecting and delivering the most useful information. This approach utilizes the full value of structured data to improve decision-making, optimize operational processes, and fuel new business.

Data discovery helps remove some of the biases and assumptions built into reports people create, helping them focus more on the things that practice owners and medical billing managers can control. Steps in data discovery include:

  • Collecting and preparing data -- This step can take a lot of time because of all the different business applications used by multi-specialty medical practices. Collection and preparation is traditionally a manual process that begins with extracting data every month, structuring it into a common format, and aggregating it into a central database. Today, the best business intelligence software largely automates this process.
  • Visualization -- Using visuals like graphs and dashboards to remove noise from data and highlight what’s useful information; visualizing data helps billing managers identify areas that need improvement, helps business owners understand which procedures to focus their attention, and can predict changes in the resulting revenue.
  • Advanced analysis -- Manipulating data in ways to uncover relationships between two or more data points at any given point in time; tasks include segmentation, correlations, and forecasting future value.

What Are the Best Uses for Data Discovery?

Here’s a look into some of the ways medical billing companies are using the data discovery process in business intelligence solutions to drive profitability, reduce waste, and create competitive advantage for themselves:
  • Improved operational efficiencies -- Billing companies and healthcare organizations need to be as lean as possible. Data discovery can be used to analyze a company’s operations for ways to reduce ongoing costs and maximize existing resources. For example, comparing your payer mix with the number of similar claims being processed by a certain payer as well as the amount of revenue you stand to receive will let you know where to prioritize your resources. Over time, you may notice a trend of similar claims being processed across multiple practices and can use that information to negotiate better payer rates.
  • Improved services and patient procedures -- Data discovery can track individual revenue streams to determine which services and patient procedures drive revenue and which are not. For example, a monthly report of collection trends may show a spike in certain laboratory tests being performed by pathology groups at certain times of the year. This information could be used to attract patients who typically receive the test the same time each year.
  • Transparency with clients and team members -- Medical billing companies should be able to supply practices with comprehensive performance reports at the click of a button. Provide customized reports to every client based on their unique challenges and performance focus.
  • Expertise -- Medical billing managers should be knowledgeable in how to approach troublesome denials. For example, denial rate gives billing companies data between all public and private payers and compares which provide the highest or lowest rate of denials for certain procedures. Once a procedure has been successfully adjudicated, the same process can be applied to the same procedure and payer in the future.

8 Medical Billing Key Performance Indicators and Metrics You Should Be Tracking in 2018

Today's billing landscape is not an easy one to navigate for many medical practices. The transition to value-based care and rising patient responsibility make the management of day-to-day operations even more challenging. Now more than ever, it's critical to regularly measure the financial health of your practice and if your staff is performing at peak efficiency. Key Performance Indicators (KPIs) help physicians and management understand the strengths and weaknesses of their revenue cycle and help guide future decisions. They also help prioritize resources and recognize key success drivers.

If you're feeling overwhelmed, start with a focus on quality and track KPIs that will heavily impact your financial performance. Here are eight you should track on a daily, weekly, or monthly basis and the tools you'll need to turn those numbers into actionable insights.

Better financial performance begins with taking control of your data.
btnLearnMore orange

Daily and Weekly KPIs

  • Cash Receipts - Revenue is the driving force of your business, so money that's collected and deposited should be monitored daily. Cash can't be benchmarked, but you can compare it to a previous period to ensure that cash flow is steady or improving. Keep in mind that this KPI can fluctuate greatly depending on things like the addition of new employees, new services, cancelled appointments and procedures, and how quickly patients pay for their medical bills.
  • Charges - This KPI should be watched in conjunction with cash receipts. Since charges drive revenue, any fluctuation in charges will cause a fluctuation in cash, so monitor this closely. Divide total charges by 365 days to calculate average daily charge amount.
  • Payables - Knowing when your unpaid invoices are due and if your practice has the cash to cover them in a timely manner is critical. The more you can track and improve your payables, the more lenient your vendor credit terms may be, which can save your practice a lot of money. Also, you can increase accounts payable process transparency and accountability among A/P staff.

Monthly KPIs

Two important healthcare accounts receivable KPIs to track how efficiently you're collecting payments from payers include days in receivables outstanding and receivables outstanding over 120 days. As a best practice, monitor these performance metrics every month to analyze what sources might be slowing your ability to realize revenue.

  • Days in Receivables Outstanding (DRO) - This is the average number of days it takes you to collect payments due to your practice. The calculation for DRO is:

You can certainly determine the average daily charge based on 365 days, but 90 days takes seasonality into account, as well as various fluctuations in business growth. So, how do you know if you're doing well? Here are the industry benchmarks for medical billing DRO:

High Performing Billing Department - 30 days or less
Average Performing Billing Department - 40-50 days
Below Average Performing Billing Department - 60 days or more

If your practice is hitting the below average mark or even the average performing, there are a lot of things you can do to improve your number. Analyze your back-end processes to ensure that you're avoiding duplicate billing, incorrect CPT modifiers, and inaccurate patient information that lead to more claim denials. Consider your patient payment process as well. Are you making it convenient for patients to pay their bills? Tools like an online patient payment portal and payment plans give patients the ability to pay for their medical expenses in a way that works for their budget. And bonus, they improve patient retention too!

  • Receivables Outstanding Over 120 Days - This is a great indicator of whether your patients and insurers are paying you in a timely manner. This KPI will also pinpoint claim denial timeliness issues and effectiveness of follow up on no-response claims. The calculation is:
Receivables outstanding over 120
A realistic number to shoot for is less than 12%. You can obviously change the age category to whatever you choose, but the point is to choose a category and stick to it for consistency. You can track this KPI in two ways: by patient who are the new payers in healthcare. This calculation can be affected by eligibility verification, how patients are paying for their bills, and if they have a clear understanding of how their insurance works. Like DRO, you can improve this number by analyzing and improving your patient payment process. Or track by Insurer to find out if your in-house billing staff or outsourced staff is tracking reimbursement and denials effectively.
  • Denial Rate- This KPI tracks the percentage of denied claims and provides insight into how efficiently your claims process is operating. You can calculate your denial rate with the following:
denial rate

To improve this number, consider how much your claims management process is manual. You can accelerate your collections performance with claims scrubbing, electronic remittance and auto coding/charge posting.

  • Resolve Rate - This is a great reflection of the overall effectiveness of your RCM process - from eligibility to coding and billing. The calculation for resolve rate is:
resolve rate

The higher the percentage, the better. If your rate is high, that means your staff and the processes they follow are working effectively. If your rate is low, look at eligibility verification, coding, authorizations, and credentialing. Since providers spend 10-30 minutes and $50 on average to re-work a claim, a low rate impacts both cash flow and staffing costs.

  • Cash Collection as a Percentage of Net Patient Services Revenue - This KPI evaluates your ability to transfer net patient services into cash. You can develop this KPI with this calculation:

cash collection as percent of net patient services rev

When making this calculation, be sure to exclude a few things: patient-related settlements and payments, Medicare pass-through, and Medicaid DSH payments. You should also avoid collected patient service cash from ambulance services, post-acute services, and physician practices and clinics unless they're recognized as a provider-based clinic by Medicare.

We've mentioned the tools you need to improve these KPIs, but what about the tools you need to analyze them in the first place? The key is organizing your KPIs into dashboards through a business intelligence reporting and analytics tool. This will improve your ability to identify trends and patterns, as well as increase awareness around what variables impact your practice. It will also allow you to easily share those findings with staff and management!

Receiving medical billing reports on a daily, weekly, and monthly basis will improve your ability to monitor financial performance by leaps and bounds. But keep this in mind, these are only outcomes and a report won't improve them for you. Analyze your reports, ask questions, work closely with your billing department, and help steer them in the right direction to improve KPIs and the practice as a whole.

5 Revenue Cycle KPIs Every CFO Should Track Right Now

From ImagineSoftware's article 5 revenue cycle KPIs every CFO should track right now published by Becker's Hospital Review

The shift to value-based care and patient financial responsibility is putting more pressure on providers to focus on the efficiency of their billing processes. Key Performance Indicators (KPIs) will help you both understand the strengths and weaknesses of your business and identify areas for improvement. Here are five KPIs every CFO should be tracking right now to efficiently allocate resources and improve revenue cycle workflows.

Total Charge Lag

This KPI is calculated by subtracting the date of service by CPT code and total number of CPT unit of service codes billed from the total number of days from revenue recognition date. It measures your charge capture workflow efficiency and identifies cash delay. Seven days is typically the threshold for performance and anything past thirty days is a major red flag. Holding charges can delay payment and potentially be lost to capture. A high charge lag can be caused by unclear or missing documentation and coding inefficiency. In terms of process improvement, consider reporting your charges by both physician and service. This will give you the ability to identify and close gaps between services delivered and any corresponding backlogs. Also, consider your staff productivity. Regular training or even outsourced coding can improve coding efficiency.

Continue reading the entire post here.