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BENCHMARKING AND REPORTING

Download MGMA. % OF AR 0-30 DAYS. 73%. 57%. % OF AR 31-60 DAYS. 18%. 12%. % OF AR 61-90 DAYS. 4%. 7%. % OF AR 91-120 DAYS. 3%. 5%. % OF AR OVER ...

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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?