Key performance indicators (KPIs) are performance measurements that show the progress of an intended or desired result.
- Key - Strategically or operationally important to your business
- Performance - Measurable process or activity
- Indicator - Tells the story to stimulate action
Common Terms
| Term | Definition |
|---|
| Baseline | Past performance measurement |
| Benchmark | Point of reference for comparison |
| Target | Goal to measure success |
| Leading/lagging indicator | Evaluates future or past outcomes |
Month End Performance Reports
The Reports Reporting Suite has month end performance reports that include KPIs. You can use these reports to measure the effectiveness of your practice's billing practices.
Report Type = Practice Performance
| Report Name | Description | Data Source/Report Purpose |
|---|
| Goals | Compare monthly transactions (e.g., charge, adjustment, payment, appointments) to created goals or prior month averages. The currency transactions are reported by ledger date in the closed month. | These reports are available on the 1st of each month, providing a monthly snapshot of the data. A number of the metrics are automatically updated to account for changes after the initial snapshot. These updates occur daily, weekly, and monthly for the prior two periods. Important transactions are presented in a more granular manner (e.g., self-pay charges and contractual versus noncontractual adjustments). Report data is updated daily at 11:59 PM PT. |
| Location Month End Performance – Analysis Grid | Review important KPIs on a monthly basis. These KPIs include days in AR, charges, adjustments, and payments. |
| Payer Month End Performance – Analysis Grid |
| Practice Month End Performance – Analysis Grid |
| Provider Month End Performance – Analysis Grid |
KPIs
| KPI Name | Purpose | Formula | Best Practices |
|---|
| % of AR > 120 | Measures how effective the billing team is at reworking claims. | Total AR > 120 days / Ending AR from the AR Roll Forward report |
- The Medical Group Management Association (MGMA) and the American Academy of Family Physicians (AAFP) gold-standard benchmark = Less then 15.9% of AR is over 120 days.
- Helps to determine if the practice is sufficiently staffed.
- To confirm old AR is written off correctly, we recommend confirming CO-45 and CO-24 are posted at the right ratios. With the denial rate of 10% as the gold-standard benchmark, the ratios of your contractual adjustments would then be, at minimum, less then 90%.
|
| Days to Bill | Measures how effective the practice is at getting claims billed. | Charge Created Date – Date of Service of Charge |
- MGMA and AAFP gold-standard benchmark = Two days
- A high Days to Bill puts additional stress on all processes that follow.
- Commitment from front office, clinical, and billing staff is needed to optimize this KPI.
- NextGen Office PM tracks this number as a whole, but separate policies and procedures for these roles are recommended.
- Consider running the Claim History Analysis Grid and filter by Claim Status = User Hold (Report Type = Clearinghouse) and the Missing Charges Analysis Grid (Report Type = Appointment) to assess from both the provider's and biller's end.
|
| Days in AR | Measures how effective the practice is at collection efforts. |
(Ending AR) / (Total charges / Days in calendar month)
*Ending AR from the AR Roll Forward report
|
- MGMA and AAFP gold-standard benchmark = 30-40 days
- A high Days in AR is an opportunity to prevent revenue leakage
- This KPI is best used in conjunction with Net Collection Rate, % of AR > 120, and Payment Per Visit.
- If the monthly calculation has a high variance, we recommend manually generating for longer time frames (for example, 90 days).
|
| Net Collection Rate | Measures how effective the practice is at collecting amount owed after contractual adjustments. | Applied Payments / (Total Charges – Contractual Adjustments) |
- MGMA and AAFP gold-standard benchmark = 94-98%
- If the Net Collection Rate is consistently too high (for example, over 100%), we recommend looking at your reason code usage. Are CO-45 and CO-24 at the right ratios?
- The Reason Code Category (contractual/denial category) is available in the Adjustment Details Analysis Grid (Report Type = Transaction).
- If the monthly calculation has a high variance, we recommend manually generating for longer time frames (for example, 90 days).
|
Suggested Actions
- Discuss KPIs and why they are important with your staff.
- Select at least one KPI to commit to using as a practice.
- Create policies and procedures that are staple of a thriving practice.
Example Policies and Procedures
See Also: AR Roll Forward ReportsGoals Report
