Key Performance Indicators (KPIs) often involve elements like charges, payments, net collection, gross collection, days in accounts receivable (AR) and bad debt. According to CEO of PRN Advisors, Jonathan Friedman, MBA, there are other less-often tracked KPIs that greatly affect collections and cash flow. One such indicator is denials.

Denials are not always simple to figure out. Friedman urges physicians to bear in mind that the goal is not to quickly correct denials, but rather, to keep them from occurring at all. This can be achieved if physicians take the time to assess which codes are relevant to their practice and then program a listing of denial codes. Simply going by generic C codes, for instance, puts physicians at risk of overlooking possible issues and denial patterns. Friedman suggests forming a list of denial codes that corresponds with the C codes, thereby providing a healthy serving of significant information.

All Claims Will Ideally Be Paid Within Three Touches

Friedman also notes the frequency with which he finds himself repeatedly correcting an issue on multiple claims. To address this issue, he inputs a rule in the billing system as soon as he identifies a denial, thereby allowing the system to correct any subsequential similar denials before the claims go out. This, in turn, keeps the denial from ever occurring. Another helpful strategy in proactively handling denials is to note any denial trends so that physicians can nip the in them bud before they grow into a management or payment problem.

Another KPI used by Friedman is the number of touches, which shows how much a certain claim has been marked as “still in process,” resubmitted, in appeals, et cetera. Friedman seeks out claims that have had around three or more touches, and then he gets to the bottom of whatever is causing the stall. He also notes that the goal when working the AR is to resolve active claims, rather than simply doing something that may keep a claim going. According to Friedman, all claims will ideally be paid within three touches.

Weekly revenue management team meetings are an integral part to a practice’s success, based on Friedman’s experience. A simple 30-minute meeting provides ample time to set monthly billing and collection expectations and examine how this compares to real charges and collections, which allows physicians to find any issues more easily. It is also essential to foster a culture in which the revenue management team feels comfortable reporting any issues, while also rewarding positive results. In addition to weekly meetings, Friedman recommends estimating monthly collection amounts using waterfall analysis, which shows monthly percentages of contributed collections.