The legendary management expert Peter Drucker once said, “If you can’t measure it, you can’t manage it.”
In today’s challenging and rapidly evolving healthcare landscape, measurement is more important than ever. However, it can be easy to fall prey to collecting “data for the sake of data,” losing direction in a sea of confusing statistics. But when it comes to revenue cycle management, practices should focus on a small set of meaningful metrics.
Over the following weeks, we’ll discuss the five metrics that provide the most insight into your practice’s revenue cycle and drive financial success. Thus, we’ll start at the beginning of the billing cycle – first pass resolution.
Metric #1 – First Pass Resolution Rate
What It Is – The first-pass resolution rate (FPRR) is the share of a practice’s claims that get paid upon first submission.
Calculation – FPRR = Total Number of Claims Paid ÷ Total Number of Claims in a given time
Benchmark – Your practice should aim for a FPRR of 90% or above.
Why It Matters – FPRR is a reflection of the effectiveness of your revenue cycle management processes – from pre-visit processes like verifying insurance eligibility, adding required authorizations, and maintaining accurate patient demographics to post-visit tasks like coding and billing.
Submitting claims right the first time is critical to maximizing both efficiency and profitability, so always aspire to have the highest FPRR possible.
Check back next week for the second installment of our whitepaper review series focusing on the second most important metric to track at your practice: Days in Accounts Receivable (A/R).
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