Benchmarking and Reporting Jackie P. Boswell, MBA, FACMPE Senior Medical Practice Consultant What is Benchmarking? • Benchmarking is a process of measuring key performance indicators and comparing with national averages and better performers • Better performers: – Benchmark routinely – Automate processes Why Benchmark? Better performing practices use benchmarking to answer the question: “How are we doing?” Typical Physician Questions… • Are we collecting what we should collect? – (Why are my collections lower than his/hers???) • How many employees should we have per physician (provider)? – (Do we really need all these people????) • Are my expenses too high? – (Where can we cut costs???) “One accurate measurement is worth a thousand expert opinions.” Admiral Grace Hopper Key Performance Indicators KPI % of A/R>120 days Days gross FFS charges in A/R Adjusted FFS collection % Patient accounting support staff/FTE physician Total medical revenue per FTE physician %of claims submitted electronically %of claims denied on first submission MGMA 2011 Better Performers Better Performers 10.69% 29.4 100.00% 0.87 $1,242,630.00 95% 4% Example Practice Data 34.25% 50.3 97.33% 1.09 $1,073,456.00 83% 15% AR Benchmarks ACCOUNTS RECEIVABLE BENCHMARKS PRACTICE MGMA % OF AR 0-30 DAYS % OF AR 31-60 DAYS % OF AR 61-90 DAYS % OF AR 91-120 DAYS % OF AR OVER 120 DAYS 73% 18% 4% 3% 2% 57% 12% 7% 5% 19% CREDIT BALANCE % OF AR 2% <5% DAYS IN AR 53 GROSS COLLECTION RATE 43% 38 Median 54% Accounts Receivable Indicator • Percentage of A/R over 120 days – % of total accounts receivable (amounts owed by patient and insurance) greater than 120 days old – These amounts should be detailed on your Aged Trial Balance Report (Aging Analysis) Accounts Receivable Benchmark Percentage of A/R of 120 days old: Average: 12-18% Red Flag: >25% Days in Accounts Receivable (A/R) The number of days it takes you to collect an average day’s charges. (If you average $5,000 a day in charges, how long will it take you to collect $5,000?) Days in AR Calculation Total Accounts Receivable (Insurance and Patient less Credit Balances and Collection Agency Accounts) = ____________________________________ (12 months of gross charges) / 365 Days in AR Benchmark Also know as… Days Receivable Outstanding (DRO) Average: 35-45 Red Flag: >50 Net Collection Rate Revenue that is “collectible” divided by net charges (allowables). Example: Dr. Doe bills BCBS $120 of which $100 is allowed ($20 is the contractual write-off). If you collect $98 of the $100 allowed amount from the insurance company and patient, you have a 98% Net Collection Rate for that claim. Net Collection Rate Average: 94-97% Red Flag: < 90% Gross Collections Calculation Total Collections = __________________ % Gross Charges Gross Collections Calculation Cash Collected in 2014: $100,000 Gross Charges in 2014: $180,000 Gross Collection Rate = 55% Gross Collection Rate What is the right answer? • If > 70% ...... Fee schedule too low? • If < 40% ...... Fee schedule too high? Physician Productivity • Common Measurements – Patient encounters (# and types of encounters), – Work Related RVUs – Charges and Collections – Adjustments (may include statistics on the amount of courtesy and other write offs) – Level of Service statistics on E&M coding – Payer Mix Physician Productivity: Encounters Office Visits Hospital Visits Total Visits Dr. A 4160 89 4249 Dr. B 1984 66 2050 Dr. C 4646 174 4820 MGMA Median* 2949 51 3000 Physician Productivity: Charges/Receipts Dr. A Dr. B Dr. C Dr. D Dr. E Total Charges $928,512 $929,953 $923,277 $779,802 $912,254 $4,473,797.25 5/1/12-4/30/13 Benchmark Receipts Benchmark $450,314 $458,337 MGMA Median MGMA Median $443,855 $840,497 $448,235 $373,845 PSR PSR $467,678 $763,556$411,035$2,194,028.51 $1,002,167 $539,483 Payer Mix New and Established E&M – Dr. Doe 100.00% 80.00% 60.00% Practice National 40.00% ` 20.00% 434 visits 0.00% 99201 99202 99203 99204 99205 100.00% 80.00% 60.00% Practice National 40.00% ` 2755 visits 20.00% 0.00% 99211 99212 99213 99214 99215 Inpatient and Subsequent Hospital – Dr. Doe 100.00% 80.00% 60.00% Practice National 40.00% ` 20.00% 74 visits 0.00% 99221 99222 99223 100.00% 80.00% 60.00% Practice National 40.00% ` 20.00% 285 visits 0.00% 99231 99232 99233 Hospital Discharge – Dr. Doe 100.00% 80.00% 60.00% Practice 40.00% National ` 20.00% 58 visits 0.00% 99238 99239 Revenue and Expense Benchmarks INCOME 2010 Prof Fees - Office $ Prof Fees - Hospital $ Prof Fees - Immun $ Prof Fees - Immun Admin $ Prof Fees - Other $ Pt Refund $ Net Collections $ 2011 Annualized* $ $ 1,111,905 $ 285,813 $ 654,490 $ (7,056) $ 2,651,247 119,707 1,106,432 511,697 624,904 (17,762) $ 4,996,225 2,338,670 107,307 4,491,130 2010 2011 MGMA 100.00% 100.00% 100.00% EXPENSES Payroll- Staff 989,351 952,354 Insurance: Health/Life Emp 99,882 62,260 Pension/ 401K/ Employee 25,412 24,963 Taxes: Payroll Employee 84,665 88,079 1,199,310 1,127,655 211,103 217,518 Total Staff Cost $ Rent Utilities 26.70% 22.57% 27.16% 32,141 35,174 Total Facility Cost $ 243,245 252,693 5.42% 5.06% 7.58% Immunizations $ 856,768 915,907 19.08% 18.33% 15.59% Total "Other Operating" Expenses $ 960,101 979,302 21.38% 19.60% 15.53% GP's TOTAL Expense $ 3,259,423 3,275,557 72.57% 65.56% 65.86% 1,231,707 1,720,668 27.43% 34.44% 34.14% Income for Distribution $ *Annualized based on Jan-Aug 2011 “Income for Distribution” Allocation Physician Expenses Members' 401(k) match members' disability insurance Members' guaranteed payment Members' health insurance Members' HSA Members' 401(k) Members' 401(k) prior year Members' estimated tax payment PLLC bonus Dues and subscriptions Insurance- NP/PA Extender wages Dues and subscriptions Wages- extenders Physician other Total 29,218 4,392 455,150 24,169 12,712 67,939 4,882 183,928 66,194 12,969 4,666 17,311 3,414 129,254 764 1,016,961 Dispensary Other Income Dispensary Income Other Expense Dispensary- wages Dispensary- pharmaceuticals Dispensary- fees Dispensary- other Dispensary- staff expense 41,189 230,522 18,584 448 92 Profit/Loss (76,521) 214,313 Comparative Report Comparative Report Current Month Patient Encounters Charges Adjustments Collections Gross Collection Ratio Accounts Receivable 1,488 $202,353 $91,588 $134,808 66.6% 287,258 Salaries Overtime Expense Contract labor Staff Payroll Taxes Staff Benefits: Health Insurance (Employer cost) Other Insurance ( Employer cost) Other Benefits ( uniforms) Total Staff Cost % of Collections Rent Utilities Housekeeping Bldg Maintenance Real Estate Taxes Build-out Expenses Landscape Maint. Alarm System Pest Control Total Facility Expense % of Collections Equipment Expense Medical Supplies X-ray Supplies, Equipment laboratory Expense Office Supplies Billing/Administrative Expense Professional Fees Telephone Marketing Prof liability Ins Travel, Meals, CME Dues, Books, Subscriptions Misc Expenses Total "Other" Expenses % of Collections Total Operating Expenses % of Collections $37,814 $1,502 $600 $3,047 $4,933 $186 $0 $48,082 35.7% $12,025 $437 $725 $0 $0 $0 $100 $50 $0 $13,337 9.9% $5,578 $7,111 $0 $589 $2,966 $2,684 $0 $1,281 $354 $0 $714 $0 $1,042 $22,319 16.6% $83,738 62.1% Total Physician Expense % of Collections $54,700 40.6% Profit/Loss ($3,630) Y-T-D Current Y- T- D Budget Revenue 9,070 $1,231,379 $403,765 $827,614 67.2% Expenses $195,992 $2,947 $4,100 $15,418 $74,289 $930 $626 $294,302 35.6% $60,125 $2,049 $3,625 $0 $1,244 $0 $500 $250 $50 $67,843 8.2% $26,209 $37,044 $0 $3,056 $17,786 $14,145 $7,546 $6,257 $2,531 $16,325 $1,850 $1,012 $8,100 $141,861 17.1% $504,006 60.9% Physician Expense $393,300 47.5% ($69,692) Same Month Prior Year 1,740 $236,677 $91,591 $165,497 69.9% $ 290,890 Y-T-D Prior Year 9,423 $1,285,267 $427,591 $859,774 66.9% Y-T-D Variance -353 ($53,888) ($23,826) ($32,160) $36,130 $1,750 $750 $2,936 $191,676 $4,443 $4,750 $15,199 $4,316 ($1,496) ($650) $219 $4,854 $179 $0 $46,599 28.2% $11,875 $657 $725 $0 $0 $0 $100 $50 $0 $13,407 8.1% $5,539 $7,844 $0 $662 $3,310 $2,813 $388 $1,103 $3,512 $0 $931 $68 $2,091 $28,261 17.1% $88,267 53.3% $25,830 $895 $350 $243,143 28.3% $59,375 $1,703 $3,625 $0 $1,244 $0 $500 $250 $50 $66,747 7.8% $25,800 $40,740 $0 $3,439 $17,195 $14,616 $8,534 $5,569 $3,878 $14,988 $2,202 $1,541 $8,866 $147,369 17.1% $457,259 53.2% $750 $346 $0 $0 $0 $0 $0 $0 $0 $1,096 -0.4% $409 ($3,696) $0 ($383) $591 ($471) ($988) $688 ($1,347) $1,337 ($352) ($529) ($766) ($5,508) 0.0% 4674681.6% 7.7% $54,700 33.1% $413,500 48.1% ($20,200) -0.6% $22,530 ($10,985) ($58,707) $48,459 $35 $276 $51,159 The Dashboard Report Dashboard Report Y-T-D Current Month Average 1488 1814 $ 202,353 $ 246,276 $91,588 $80,753 $ 134,808 $ 165,523 66.6% 67.2% $ 287,258 $ (63,212) 43.18 35.48 Patient Encounters Charges Adjustments Collections Gross Collection Ratio Accounts Receivable Credit Balances Average Days in A/R Cash on Hand Beginning Bank Account Balance Current Month Deposits Current Month Checks Written Ending Balance Doctor Doctor Doctor Doctor Bush Jr Clinton Bush Sr Regan Total $15,477 $134,808 $138,438 $11,847 Charges $53,483 $57,097 $48,952 $41,821 $201,353 Days in Collections Encounters Office $29,581 412 21 $32,853 437 21 $35,229 364 20 $37,145 275 11 $134,808 1488 73 What Reports Do I Need? Basic Reports Report Sort By Description Accounts Receivable Summary (Aged Trial Balance) Insurance Company, Balances > $0.00 Report should show balances greater than $0.00 by insurance responsibility. This report should age all balances into 0-30, 31-60, 61-90, and over 120 day categories Patient Responsibility, Balances > $0.00 Report should show balances greater than $0.00 by patient responsibility. This report should age all balances into 0-30, 31-60, 61-90, and over 120 day categories Credit Balance Report Patient Account (Not Invoice) Report should detail each patient account with a balance less than $0.00. (Credit may be due the patient, insurance company, or neither (account may have been over adjusted)) Unapplied Credits Report Office Report shows the payments that have been input in to the system but have not been applied to a date of service Service Analysis Report Year-End and Year-ToDate by CPT by Provider Report should detail the frequency of each CPT code by Provider. It should include total charges for each code (frequency multiplied by the charge) Year-to-Date Activity Report Individual Month (by Provider) Report should summarize charges, payments and adjustments for the fiscal year or, preferably for each of the last 12 months, by Provider if there is more than one M.D. Payer Mix Year-to-Date and Previous Year by Insurance Company Report should show charges, payments, adjustments by insurance company for a specific time period List of Employees Practice Listing of all Employees, with Job Titles, Hrs worked per week, and Hourly Rate/Salary Balance Sheet Practice Prior Year and Current Year-to-Date Profit / Loss Statement Practice/Provider Prior Year and Current Year-to-Date Finally… • Transparency in a medical practice should be expected. • Understand your financial reports and financial status. • Ideally, your personal accountant should be different than the practice’s accountant. • SVMIC is available to assist our policyholders! Remember! Just because a practice CAN report it ….doesn’t mean a practice SHOULD. Questions?
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