A happy (and financially stable) practice is a practice that maximizes and maintains consistent cash flow. To do that, you must effectively manage your patient and insurance company receivables. A great way to evaluate your performance is through regular practice checkups – or medical practice assessments. By analyzing key performance indicators on a regular basis you’ll gain a deeper understanding of your practice financials, but most importantly, it will help you determine if and where you’re leaking revenue. So where should you start with physician performance management?
Accounts Receivable Analysis - Take a look at the accounts receivable process from both an insurance and a patient viewpoint. This will help you determine if it’s a patient problem, an insurance problem, or maybe even both.
Days Revenue outstanding - Take a deep-dive into days revenue outstanding. This data is important to understand because it determines the velocity of your payments. Are you doing a great job, a mediocre job, or it is something you need to work on improving?
Charge Posting and Billing Lag Analysis - Closely tied to days revenue outstanding is charge posting and billing lag. You want to see how long it takes you to enter a charge and then how long it takes you to actually submit that claim to the insurance carrier.
Charges and Payments Analysis - Analyze your charges and payments. One of your goals is to stay consistent over time – avoiding peaks and valleys. If the analysis isn’t consistent, you want to identify what those dips are and why they are happening.
These are just some of the measurement tools you should consistently look at and use to help determine the overall financial health of your practice. To learn more, listen in to our webinar Understanding Your Practice Financials.