Medical Billing Best Practices: Metrics and Key Performance Indicators
How does your medical billing department stack up to industry best practices? This is a question that is unfortunately not asked very often among administrators and physicians. Furthermore, it is extremely uncommon to find medical practices or organizations that operate under strict benchmarks and metrics, and have analytical tools in place to monitor daily or monthly activity.
Below are a five key metrics and calculations you can make to quickly determine where your medical billing department stands in terms of performance and collecting the money that it should be. The metrics below are not specialty, size or revenue specific. They will work for any type of medical practice or organization with a medical billing department or medical billing service, if outsourced.
It is important to understand the Net Collections Rate, if you are not familiar, and why it is a better metric for evaluation, as opposed to Gross Collections Rate. The Gross Collections Rate simply tells you what percent you collected of what you charged. What matters is what you collected of what you are owed. That is where the Net Collections Rate comes in handy. It tells you the full story of how good of a job your medical billing team is doing at bringing in the money you are owed. The below table shows a simple example that demonstrates the two calculations.
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