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Patient Access KPIs
HFMA lists only 2 KPIs suggested here – both give you ample insights into your frontend revenue cycle management team performance.
- Percent of patient schedule occupied
- Point of sale cash collections
Percent of patient schedule occupied
Let’s say you have 10 providers that can see 30 patients per day.
This means that you have 300 patient appointment slots available per day.
Now, let’s say that out of 300 such available slots. So, the total patient slots booked could be 200 (underutilized).
Or the books slors could be 300 (exact).
Finally, the booked slots could be 400 (overbooking).
You are trying to calculate the utilization of those available patient slots (ie chargeable events).
Measuring this metric will allow you to maximize utilization of your scheduled availability and hopefully, try to maximize capacity utilization.
The calculation is pretty simple –
Number of patient slots occupied divided by number of patient slots available.
Point of service cash collections
Collecting payments from patients after they have left your clinic is hard. And it gets increasingly harder as days progress. You want to make sure you are collecting every penny that’s due from the patient, at the point of service, when the patient is right in front of you.
This alone will reduce your collection costs (following up, sending statements, chasing after patients etc).
Calculate the total patient payments made at your frontdesk and divide it by total self pay cash you have collected.
According to HFMA, you can include cash collected up to seven days after the patient is discharged / seen.
You can also include prepaid cash (e.g. you have a digital patient intake solution that allows patients to pay over the phone / mobile app).
What about payments on patient dues from past visits?
As per HFMA, if you are collecting it prior to this current visit or at the current visit, you can include this as well.
However, for prior dues, you cannot include the payment if it is made after this visit.
You have to exclude any payment plan your collections team might have set up. You also have to exclude any cash your frontdesk might have refunded to the patient as well
To calculate the Total Self-Pay Cash Collected, you need to add all the cash collected for patient responsibility for the reporting month. This will include cash collected, all bad debts recovered, any loan payments as well.
Pre billing KPIs
HFMA has only one KPI for this – total charge lag days.
You need to understand the charge lag days. This is to find out the time spent between the patient being seen / discharged and when the charge is actually posted.
This will tell you whether your revenue cycle management team is adequately staffed or not.
I will never advocate speeding up charge posting just to reduce the charge lag days.
It is better to double check your work and take your time to post charges vs posting charges quickly and getting denials.
You have to pay the piper one way or another. So, you need to decide what you can live with.
Total charge lag days
For this, you need to calculate the total days from revenue recognition. As a result, you can recognize revenue when you post the charge.
Let’s say you billed 2,000 charges in the reporting month. Therefore let’s assume they are broken down like below.
There were 20 service dates in the reporting month. In this month, 2,000 patients are seen.
Charges that posted could be as below.
- About 400 charges posted within 2 days of service date
- You posted 500 charges within 3 days of service date
- Next, 300 charges posted within 5 days of service date
- Again, 500 charges posted within 7 days of service date
- Finally, 300 charges not posted in the month of reporting
So, the total charges posted were 1700 (not 2000).
The average is 400*2+500*3+300*5+500*7 / 1700 = 4.29 days
The industry benchmark is 3 to 5 days after date of service or post discharge; So, if you are anywhere close to that, you are doing OK.
Physician financial management KPIs
HFMA breaks this down into primary vs specialty care.
Primary and specialty care practice operating margin ratio
This is simply a calculation of the net income from your primary care practice operations divided by the primary care operating revenue.
It helps you measure the financial performance of a PCP facility.
Net Income From Primary Care Practice Operations is what your PCP practice is making after paying all its expenses. Expenses include everything you need to operate. In other words, include marketing, supplies, salaries, insurance, real estate expenses, building, utility expenses.. All of it.
Meanwhile, Primary Care Practice Operating Revenue is all the revenues from seeing patients / from patient care services.
By calculating this, you are effectively trying to understand the operating margins
Net income per primary or specialty care FTE physician
Here, you are trying to understand the profit or loss per full time equivalent physician you have.
Each FTE physician you have, represents an investment – in terms of salaries, support staff, equipment etc.
Calculating this metric will allow you to understand the profitability of your practice on a physician level.
All you have to do is to calculate the net income from your practice operations and divide by the total FTE physicians you have.
Of course, practice expenses include all operating expenses as explained above.
Be careful when you calculate the total number of Primary Care Practice FTE Physicians. You are calculating a full time equivalent. So, if Dr Jones is getting paid for 20 hours per week – they are 20/40 = 0.5 FTE… not 1 FTE.
Total primary or speciality care physician compensation as a percent of practice operating revenues
Here, you are trying to understand the affordability of a physician compared to the revenues of the entire practice revenues.
Each physician contributes directly to the operating revenues of the healthcare practice. This gives you a measure of their compensation vs their direct contribution.
To calculate this, you take the total physician compensation (include salary/bonus/benefits but exclude the insurance payments) and divide this by the Primary Care Practice Operating Revenue as you calculated above.
These are few of the metrics you need to start with to get a better grasp of your revenue cycle management team and processes.
Once you start monitoring these, you will have the opportunity to dig into further items as well. Read a more comprehensive guide here.