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Medical Billing KPIs for Holistic Practices

Running a successful holistic practice involves managing people, administrative responsibilities, and more. But how can you be sure your practice is on the right track to long-lasting success? Utilizing medical billing KPIs to understand your practice’s current performance and set goals for the future can help you realize the status of your holistic practice.

What Are Key Performance Indicators?

A key performance indicator (KPI) is a measurable value that indicates how well you’re achieving key business objectives. They provide a way to monitor an aspect of the holistic practice on a consistent schedule to determine whether or not you’re on target to achieve your established goals.

While a KPI can track many different things, the most important feature of a good KPI is that it must be measurable. Some aspects of a holistic practice are easier to quantify than others, but for a KPI to be effective, you need to be able to compare performance data over time to identify trends and recognize potential problems.

How to Choose the Right Medical Billing KPIs for your Holistic Practice

When selecting a KPI, you first need to know what’s important to your practice. Revenue is usually an easy choice, but there are a number of specific practice activities you may value above others. The best place to start is by doing a thorough assessment of the present state of the practice. This provides a snapshot of where you’re at in terms of financial status, operational efficiency, and patient management.  Calculating Medical Billing Metrics

Not every holistic practice values the same areas. A wellness care provider may have a different perspective on tracking how many new patients they treat than a more specialized acupuncture practice. At the same time, monitoring too many KPIs can be overwhelming and counterproductive. By focusing on KPIs directly related to revenue, steps taken to address problems that become apparent will improve other areas of your practice along the way.

Top Key Performance Indicators that Holistic Practices Should Be Tracking

There are numerous medical billing KPIs to track for your holistic practice; these are good, foundational metrics to monitor:

Days in Accounts Receivable (A/R)

A practice’s accounts receivable (A/R) indicates how many payments have not yet been collected, whether for insurance reimbursements or out-of-pocket services. For a healthy practice, the average time a bill spends be in A/R should be about 30-40 days. The goal here is to streamline your operations to get your practice paid faster, which could involve eliminating billing and coding errors or doing a better job of following up on claims. Tracking the amount of time claims spend in A/R can help holistic practices identify which payers are behind and understand why.

Percentage of A/R Over 90 Days

After 90 days, outstanding bills and claims become much more difficult to collect while anything over 120 days is likely never going to be collected. If more than 15% of claims are spending over 90 days in A/R, there are likely some serious inefficiencies in your processes that need to be addressed. Tracking this KPI closely will also allow you to “sound the alarm” for your holistic billing team whenever a claim is in A/R for longer than 65 days to greatly reduce the risk of it never being paid.

Net Collection Ratio

Your holistic practice’s net collection ratio is an indication of how much potential revenue you collect after insurance adjustments have been applied. This number will vary a bit by specialty, but the average healthy practice collects around 95% of potential revenue for services, either by collecting from patients themselves or by submitting successful insurance claims. An outstanding practice with the right systems in place - or support from a medical billing provider - typically has a net collection ratio of 98% or greater. Tracking this KPI helps you to measure the overall health of your billing and collections process. If it ever falls below 90% over a period of time, you’ll know that something is out of alignment and should be addressed immediately.  

Non-Contractual Write-Off Percentage

A write-off is any bill that goes uncollected; your holistic practice may classify it as “bad debt.” In many cases, it results from denied insurance claims and could indicate an inability of your office staff to follow up on denials. For specialty practices, there is a higher risk of patients allowing bills to go unpaid as they may not need to seek medical services again. In any case, your total percentage of uncollected payments should not exceed 5%.

New Patient Ratio

This KPI tracks what percentage of your patients are first-time visits to your holistic practice. Measured over time, the ratio can help you determine whether your practice offers a good balance of services. For general wellness practices, new patients make up about 25% of visits, while specialty care practices could see up to 50% new patients each month.

Referral Mix

The referral mix segmentation shows you what type of patients you’re receiving and who is referring them to your holistic practice. It can help provide a better picture of where patients are coming from and whether they are a good fit for your practice.  Medical Billing

Payer Mix

Your holistic practice’s payer mix tracks your overall balance of payers. It indicates how much revenue you’re taking in from each payer source, such as individual insurance providers or self-pay patients. As a general rule, no more than 30% of your revenue should be coming from one payer unless you’re working with an underserved population funded by a single source such as Medicaid/Medicare.

Transform Your Medical Billing with Holistic Billing Services

By creating a monthly summary sheet to track KPIs, you can begin to identify and resolve problem areas in your practice that are holding back growth and revenue. Dashboard tools are also incredibly valuable for monitoring KPIs as they allow you to gather and present data in a variety of ways that make it easier to visualize what’s actually happening in your practice. This allows practice administrators to communicate data to physicians and stakeholders more effectively and set benchmarks to evaluate future performance.

Our experts here at Holistic Billing Services believe that our success is your success. From handling medical billing and coding to offering consulting services and much more, our team is dedicated to making it feel like we’re in-house. With a focus on holistic practices, insurance background, and proven consultants, our team can effectively ensure the financial success of clients, allowing your medical practice to focus on what it does best: treat patients.

Our expertise is rooted in professional, technical, and global billing for hospital and stand-alone holistic care practices. To learn more about how outsourced medical billing with Holistic Billing Services can empower your practice, contact us today. We’ll work with you to build a customized solution that meets the specific needs of your practice and allows you to get back to treating patients.

August 11, 2021
 - by Antonio Arias, MBA, CHBME
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