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?
