{"id":11745,"date":"2015-08-26T16:46:46","date_gmt":"2015-08-26T20:46:46","guid":{"rendered":"http:\/\/www.poweryourpractice.com\/?p=11745"},"modified":"2025-10-27T12:41:31","modified_gmt":"2025-10-27T12:41:31","slug":"track-your-performance-the-best-metrics-for-medical-groups-2","status":"publish","type":"post","link":"https:\/\/carecloud.com\/continuum\/track-your-performance-the-best-metrics-for-medical-groups-2\/","title":{"rendered":"Track Your Performance: The Best Metrics for Medical Groups"},"content":{"rendered":"<p>If you\u2019re like most providers and practice managers, you\u2019re already busy enough to keep up with the day-to-day operations. But monitoring your practice\u2019s financial performance remains vital to your medical group\u2019s success as a business. It is not only worth investing your time, it is critical that you do it.<\/p>\n<p>One of the top reasons practices lose money is failing to track key performance indicators (KPIs) consistently.<\/p>\n<p><strong>Reasons can include:<\/strong><\/p>\n<ul>\n<li>Staff members don\u2019t know how or which financial metrics to track<\/li>\n<li>Your practice management software doesn\u2019t provide a reporting capability that makes this easy<\/li>\n<li>Even if you can look at KPIs, some practices don\u2019t really know what those KPIs need to be, or what it means to their bottom line if they are not in line with benchmarks<\/li>\n<li>If you outsource your medical billing, not every company provides these essential metrics so that you truly know how well your practice is performing<\/li>\n<\/ul>\n<p><!--more--><\/p>\n<p>So where should you start?<\/p>\n<p>Begin by focusing on the most important KPIs:<\/p>\n<h4>1. Net Collection Ratio<\/h4>\n<p>This metric truly tells you if you are collecting all of your money. I put it first because it provides the truest picture of whether you\u2019re collecting all the money according to your contracts and amount owed to you. <a href=\"http:\/\/www.mgma.com\/Libraries\/Assets\/Industry%20Data\/All%20Data%20Resources\/10-ways-to-improve-your-bottom-line-with-PMS-data-by-Frank-Trew.pdf\">The MGMA recommends a net collection ratio of 95%<\/a> or higher; anything below that figure generally means you have room for improvement. This KPI can be tricky to calculate because you need to understand the charge value of your total billed charges. Charge value can be calculated as charges less your contractual adjustments. This really tells you how much of the charge value you collected.<\/p>\n<p><strong><em>Net Collection Ratio = Payments \/ (Charges less Contractual Adjustments)<\/em><\/strong><\/p>\n<h4>2. Reimbursement Per Encounter<\/h4>\n<p>This KPI is simple to calculate and makes it easy to compare your medical group with others in the same specialty. So if you\u2019re an internal medicine practice, you can benchmark against other internist groups, for example. This KPI should be trended to see consistency from month to month. If you currently outsource your billing, your medical billing company should be providing this information to you on a monthly basis if you can\u2019t already track it in your software.<\/p>\n<p><strong><em>Reimbursement Per Encounter = Payments \/ Total # Encounters for Same Given Period<\/em><\/strong><\/p>\n<h4>3. Accounts Receivable Greater than 120 Days<\/h4>\n<p>Keep an eye on the percentage of your AR that fall into this category. This is a nice indicator to see if patients or insurers pay you in a timely manner. A high percentage of AR over 120 days can also point to issues with the timely working of claim denials or to the effectiveness of following up on no-response claims. This rate varies by specialty. Some best performers will have less than 10%, and anything greater than 25% is a red flag that you need to take action. In today\u2019s landscape, you should really strive to get that number below 10%.<\/p>\n<p><strong><em>Accounts Receivable &gt; 120 Days = Total AR over 120 \/ Total AR<\/em><\/strong><\/p>\n<p><strong>Calculate this metric in two ways:<\/strong><\/p>\n<p><em>Patient Responsibility:<\/em><br \/>\nThe Patient AR over 120 reflects the success of your patient collections. This is important because once your billing falls into patient AR greater than 120, there is a 79% chance that you will not collect that money. This KPI can really vary per specialty, so it\u2019s important to benchmark against your own specialty. With patient deductibles at a 20-year high-it\u2019s critically important to watch this KPI. Look at your front-end processes for collecting patient money at the time of service, verifying eligibility, and checking deductibles remaining.<\/p>\n<p><em>Insurer responsibility:<br \/>\n<\/em>The Insurer AR over 120 indicates that your in-house billing staff or outsourced medical billing company is not tracking reimbursement and denials efficiently. It\u2019s important to look at AR over 120 at the payer level to determine which payers may be slow to pay or causing serious follow-up or denial problems. This KPI can really vary per specialty also, so again it\u2019s important to benchmark against your own specialty. Overall, anything greater than 25% is a risk indicator and should be investigated. Benchmarks vary per specialty and some best performers will have this number as low as 5%-7%.<\/p>\n<h4>Modern Software Solutions<\/h4>\n<p>In addition to training staff about how to calculate KPIs, modern technology can help you efficiently track your financial performance. Look for medical billing software or services that provide the level of reporting you to need on an ongoing basis. Again, consistency is key.<\/p>\n<p>When you\u2019re looking for the best medical billing software, make sure to ask about advanced reporting features and insurance contract capabilities. When your medical billing system can easily access the different payer rates in your contracts, you\u2019ll have the tools to make sure you\u2019re getting paid what you\u2019re owed in full. For example, you may charge a patient $100 for a service. BlueCross BlueShield pays $80; Aetna pays $75; and Medicare pays $67. With all the variability, if the contract is not in your system, it\u2019s harder to know if you\u2019re getting paid appropriately.<\/p>\n<h4>Additional Resources<\/h4>\n<p>For more information, <strong>the MGMA is your best resource<\/strong>. Some specialty societies also provide benchmarks. The American College of Physicians, for example, has a Practice Management Toolkit that includes the <strong>8 types of financial reports physician practices should track<\/strong>.<\/p>\n<p>The first three priorities for providers and practice administrators are to review staff roles and responsibilities, perform cost analysis to find high impact savings, and revamp billing processes to accommodate the changing landscape. The fourth and next essential step is a more complete <strong>financial performance review<\/strong>.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>If you\u2019re like most providers and practice managers, you\u2019re already busy enough to keep up with the day-to-day operations. But monitoring your practice\u2019s financial performance remains vital to your medical group\u2019s success as a business. It is not only worth investing your time, it is critical that you do it. One of the top reasons [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":43759,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3,69],"tags":[304,268,305,306,84,85],"class_list":["post-11745","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-growth","category-show","tag-key-practice-indicators","tag-kpi","tag-medical-group-finances","tag-medical-revenue","tag-rcm","tag-revenue-cycle-management-2"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.3 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Top Medical Group Metrics to Track for Peak Performance<\/title>\n<meta name=\"description\" content=\"KPI is simple to calculate and makes it easy to compare your medical group. 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