Today’s medical professionals must run a leaner, more efficient practice, even as they contend with higher costs and lower reimbursements. That’s why revenue reporting and analysis are more critical than ever.
When was the last time you examined the difficult questions surrounding the financial performance of your practice? A benchmark analysis is a crucial step in this process. It measures your practice against industry norms, providing a baseline snapshot and a road map for improvement.
A Closer Look
A proper analysis should confirm what’s working well and what isn’t. It should also identify new revenue opportunities in areas like increased collections, reduced deductions or the implementation of a government sponsored program such as MACRA. Effective A/R practices increase revenue performance, but improvement can only come by understanding your current position. Identifying areas of opportunity allows you to make better decisions on staffing and resources.
To identify your priorities and goals, ask yourself these 10 questions:
- Are you earning less than last year?
- Can you improve processes with electronic eligibility, clinical claim scrubbing or other revenue cycle management efficiencies?
- Is a single payer contributing to a disproportionate part of A/R aging or denials?
- Have you considered expanding ways for patients to pay such as accepting credit cards, patient portals and on-line bill pay?
- What about outsourcing the billing and collections process?
- Is your practice-management application or clearinghouse powerful enough to handle frequent changes in billing requirements?
- Is your practice billing at least every day, if not twice a day?
- How effective is your denial management process?
- Do you know how to avoid penalties?
- Are you developing an exit strategy or considering selling your practice?
Goal setting and regular reporting are paramount to maximizing your revenue performance—and a benchmark analysis sets the groundwork for this. With so much at stake, it’s imperative that you seek outside support where your practice might be lacking in experience or expertise. Ask yourself: Are you running your practice, or is your practice running you?
Your Greatest Asset
Turnover is high in healthcare administration, and it can be costly to your bottom line. Evaluate your current staff. Is someone being underutilized or overworked? Talk to your staff to get feedback on minimum requirements, goals and resource allocation. Ask them to help monitor performance. You can even establish incentives for reaching specific goals.
If you notice a specific area where staff members are struggling to keep pace, talk to them individually. Ask for their help. If they’re truly falling behind, seek temporary assistance from other team members. Meanwhile, keep a close eye on that area to make sure you have the right staff in place.
The Untold Value of Benchmarks
Not unlike an annual physical, a benchmark analysis is an invaluable tool in assessing the health of your practice. Establishing a baseline is like a new beginning—a way to strengthen what’s working and heal what’s failing.
Benchmarking also lays the groundwork for invaluable financial advice. On average, doctors lose 24-32 cents on every dollar, largely due to inadequate collections and billing procedures. With professional help in these areas, you could see a 25 percent increase in cash flow.
A benchmarking analysis can be completed utilizing the following four basic reports from the practice management system:
Transaction history. A chronology of actions taken on each charge, capturing all payments for primary, secondary, tertiary and patient activity.
Insurance aging profile. A report that captures all outstanding claims due from respective insurance payers based on monthly aging from 30 days to over 90 days.
Patient aging report. A breakdown of patient balances that have aged 30 days to over 90 days.
Insurance profile. An account of the primary insurance companies billed and the total charges, payments and write-offs by the payer.
Collectively, these four reports provide the data needed to calculate collection rate, analyze performance by CPT code and evaluate days in A/R. They can also be used to determine recoverable reimbursements, the potential impact of increased collections efforts or reduced deductions, and some form of expected savings.
For you, benchmarking’s true value lies in its ability to identify potential cost savings and revenue opportunities that would have otherwise gone undetected.
Contact AssuranceMD today to schedule a benchmark assessment for your practice.