The end of the month serves as a great time to take stock of your practice’s overall financial performance, identify problems, and track improvement in key areas since the end of the previous month. While it is of course important to utilize the right tools and processes in managing your office on a daily basis, you cannot hope to improve without actually tracking changes and trends over longer periods of time.
Specifically, at the end of every month, you should be reviewing three main areas: financial performance, clinical outcomes, and office productivity.
Financial Performance for Your Practice at the end of the Month
Your practice management system comes with a wealth of in-depth financial reports for your reviewing pleasure – use them!
Understand your Accounts Receivable (AR). As your AR represents how quickly your practice is paid for the services it provides, this is particularly important. Look at your AR balances for all payers as well as your outstanding patient balances, and how these trend month-over-month. An upward trending patient AR balance could speak to the need to improve patient collections efforts (which we discussed here). Also, pay careful attention to your AR Aging.
What percentage of your AR is less than 30 days old? Greater than 90? Older AR is harder to collect, and a rising trend in 90+ day old AR speaks to problems in your practice’s collections efforts. The MGMA recommends your 90+ day old AR to be less than 14% of your total. Is your practice meeting that benchmark?
Run a CPT analysis. What codes do your physicians bill the most? The least? Which CPTs are high-margin? If you are coming up on the end of the year, a utilization and payment analysis by CPT can help you understand how any contract changes with your payers will affect your reimbursement and potentially financial performance for the next year. Small changes to commonly used codes can have a big impact.
Finally, analyze your payers. Where are you being underpaid according to your contracts? Are you being overpaid anywhere? What are your most common adjustment codes? What are your most common reason codes for denials? Understanding this information can help you better educate your staff on individual payer requirements when billing claims and minimize denials and rejections.
There is no end to the amount of useful monthly data for financial performance you can track using the reporting functions in your practice management system. For those key performance indicators at which you look every month, the most important question to ask is how has this changed since last month? Make sure that, in addition to running your reports, you are actually using the data they contain to identify problem areas and then develop plans for improvement. Remember, the earlier you can spot negative trends, the easier it will be to course correct.
Clinical Outcomes Effect Financial Performance
These days, it is all about quality reporting. If you are participating in MIPS or another quality reporting initiative, the end of the month is a perfect opportunity to review how your current measures stack up to the targets demanded by your program so that you can make adjustments. Once again, the earlier you review your reports, the better. Pay careful attention to how both your reporting system and your incentive program capture information and/or calculate quality measures so that you know how you can make changes should you need.
Doing a monthly assessment of clinical performance is not limited to those practices participating in quality reporting programs, though. It is also good practice for any practice looking to maximize patient satisfaction. If you are using an EMR, leverage your clinical reports to make sure that patients are receiving necessary and appropriate care. If you are not, take a sample of charts/encounter forms from the last month to audit. Are your clinicians doing what they are supposed to? Are there errors? Is documentation missing in some areas?
Keep in mind that the whole purpose of these clinical quality reporting programs is to promote taking action. You should be able to generate lists of patients for appropriate follow up and should have processes in place to use the data you are capturing, such as recalling patients using electronic reminders via patient portals, messaging, or even human call campaigns.
Productivity is a little more difficult to measure with reports than financial metrics, but it is still very important. Many practice management systems provide some measure of staff productivity reporting, which you can use to review staff members’ activity within the system itself, but for a fuller picture you will need to incorporate conversations with your staff members themselves.
Determine which activities are taking the most time, or which activities your staff spend the bulk of their time on. Identify staff frustrations – what is causing staff the most pain? Is your staff utilizing the tools in your office correctly and/or effectively?
This information can help you identify who needs additional training, and what sort as it relates to financial performance. It can also help you identify holes in your toolset or processes. For example, if you find that your staff is spending hours every day on hold with payers trying to determine patient eligibility, it may be that your office would benefit greatly from adopting an electronic eligibility tool.
Without a clear picture of the current state of your practice, it is impossible to take the right actions in order to improve. With that in mind, make sure you’re using the end of the month to develop that picture. Review your reports and talk to your staff so that you understand the overall health of your practice’s operation and implement the strategies necessary to keep growing.