As the need for on-demand healthcare has grown more popular, the number of urgent care centers has exploded. As competition among these facilities increases, it becomes more vital for these businesses to keep their fingers on the pulse of their financial health.
Much like a health problem that goes untreated, financial issues can turn into an emergency when ignored. The most important way to keep an urgent care practice financially healthy, is to fully understand the impact of reimbursement processes.
To ensure reimbursement processes are contributing to financial success, urgent care providers need to dive deep into clinic data with the help of industry specific dashboards and business intelligence tools. Data is driving all of today’s businesses, and paying attention to specific key performance indicators (KPIs) can not only improve care for patients, but boost profits for clinics.
1. Average Reimbursement Per Encounter
The average reimbursement per encounter is one of the clearest overall indicators of a clinic’s financial health. According to our proprietary data the average reimbursement per year from 2013–2016 was $123 per visit, and the break-even point for an urgent care clinic is approximately 25 visits per day, so every encounter matters.
This number is derived from total reimbursement received for visits paid in full, divided by the total number of visits paid in full. If average revenue per encounter seems low, this might be a sign of payer contracts, patient mix, or inaccurate coding (potentially because of incomplete documentation).
2. E/M Code Distribution
E/M (evaluation and management) codes show the complexity of urgent care visits and determine the level of reimbursement based on the services provided. Clinical staff needs to fully document the content and complexity of the visit in order to capture the correct E/M code.
Urgent care reimbursement is lower when documentation is lacking (and vice versa). Since unethical overcharging occurs if visits are deliberately up-coded, audits by payers check levels of codes used at urgent care clinics to ensure accuracy and compliance.
The distribution of E/M codes can be a clear indicator of inaccurate documentation. For example, a large percentage of level two visits may reveal a lack of documentation, while too many level four or five visits may indicate E/M up-coding.
3. Days to Bill and Days in Accounts Receivable
Clearly, the faster claims are paid, the better. The number of days to bill a claim, and therefore the number of days in AR (Accounts Receivable), can constrict your cash flow and is a direct indicator of issues with billing, payers or staff.
How a patient chart is coded and billed – based on documentation – can lead to unnecessary delays in reimbursement. For example, if providers forget to complete charts, visits take longer to code and longer to bill.
The general timeframe to bill a clean claim is one to three business days. Keeping an eye on frequent reports that indicate how many claims didn’t pass initial scrubbing (and addressing the causes promptly) is critical. To figure out your days in AR, divide your total outstanding AR balance by your average daily charges for the last 90 days.
More than three days to bill a claim can be a sign of inconsistent clinic procedures. Providers not locking charts, incomplete documentation, or not collecting insurance information are common procedural gaps. AR delays can be a sign that billers aren’t submitting claims quickly enough, or that payers are delaying payment for inaccurate claim submission.
4. Front Desk Collection Rate
Front desk collection rate is the percentage of collections gathered by the front desk from patients before they leave the clinic. This number is typically a reflection of the overall collection percentage per visit.
Front desk procedures and personnel affect this metric immensely. Enforcing the correct collection of co-pays at patient intake ensures a higher percentage of payments in full. Traditionally in urgent care, the policy is to gather as much as possible at time of service, since the patient is not as likely to be a repeat customer—or may not be insured.
Having real-time insurance verification in your software helps staff collect the correct amount. If the patient is cash-pay, personnel should gather 100 percent of the fee at time of service.
5. First-pass Resolution Rates
Simply enough, first-pass resolution rate is the percentage of claims that are paid without resubmission. This number is calculated as the total number of claims paid (by payers or transferred to patient responsibility), divided by total number of claims submitted. First-pass rates can vary depending on payer, but can be a clear indicator of coding and documentation inaccuracy.
Rejected claims not only cost time and money for biller resubmission, but they also affect cash flow and cost providers money. A high first-pass resolution rate means claims are being documented, coded, and billed correctly the first time. When it comes to claim submission, “Get it right the first time” should be the mantra.
Power of Data
Monitoring these KPIs can help maintain the financial health of urgent care clinics, but they are just a few of the many data points that can contribute to success. Data is only valuable if viewed on a consistent basis, the meaning behind the numbers is correctly interpreted, and the necessary actions are taken to correct any issues and get revenue on track.
It may seem like a lot to stay on top of, but the right tools can help urgent care clinics effortlessly capture and analyze this data. By capitalizing on the technology available, forward thinking facilities can gain the competitive edge necessary to emerge as leaders in the burgeoning on-demand healthcare landscape.
By Brooks Pidde, Director of Data Analysis, DocuTAP
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