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The 3 Medical Billing Reports You Should Be Running Regularly

 

Creating medical billing reports can help you diagnose the health of your practice. Reports can show you how your practice is performing on important revenue cycle metrics, whether claims are being paid in a timely fashion and and how well insurance carriers are paying you for key procedures, among other things. But how do you determine which are the most effective reports to run?

To find out, I talked with several medical billing experts: James Veccie, Senior Revenue Cycle Management (RCM) Account Manager at NueMD; Armine Manukian, RCM Manager at Kareo; Matt Barron, Product Manager for Business Intelligence—Reporting and Mobile at ADP AdvancedMD; and Dr. Sherif Hassan, practicing physician and President of Maryland Urgent Care. They identified three key billing analytics reports that could save your practice valuable time—and help you make more money. Here’s what I learned:

#1: The Accounts Receivable Aging Report (and Follow-Up Reports)

Veccie notes that while there are many reports that can be very valuable, the Accounts Receivable (A/R) Aging Report is “a good barometer for the health of the [average] practice,” a statement echoed by Dr. Hassan. By looking at this report, an experienced biller can tell whether or not the practice’s billing department is doing an adequate job. Veccie also recommends looking at a few other related reports to get more detailed information: the Insurance Payment Trend Report and the Insurance Collection Report.

NueMD’s Insurance Collection Report.

Veccie uses NueMD’s Practice Management Software to generate the A/R Aging as well as the Insurance Payment Trend and Collection Reports—though these reports are common to most medical billing software programs. While the A/R Aging report could technically be generated by hand, the amount of time it would take would make doing so impractical. 

“If you’re a practice seeing over 10 or 20 patients a day, and you’re not using an electronic software, you’re probably losing a ton of revenue,” Veccie says, “but you won’t know [how much] without a way to track it.”

What data does this report track? 

The A/R Aging Report breaks down claims based on the number of days they’ve been in receivables (in other words, the number of days they’ve been unpaid). Most claims, Veccie says, take an average of about a month to get paid. This report allows you to identify potential issues from a high-level view, while the follow-up reports give you a close-up look at where the issues might be stemming from.

The Insurance Payment Trend Report shows what’s been billed out and what’s been collected, and lets you measure that against what is allowable with insurance. Essentially, it lets you see how much you should be collecting from patients to pay their claims. And the Insurance Collection Report shows you claims that haven’t been collected on that are over a specified number of days old.

What data do you hope to see, and what are some “red flags” to look for?

In the A/R Aging report, Veccie says, you’re hoping to see that all claims are being paid within 45 days. There might be a problem if a claim hasn’t been either paid or rejected by this time—so you should check into the issue and make sure progress is being made on getting the claim paid, Veccie says. Aging over 90 days is an even bigger red flag: at this point, it’s crucial for your practice to get the claim handled, as unpaid claims could interfere with insurance companies’ timely filing deadlines.

Dr. Hassan notes, however, that it’s important not to be thrown off by the rough figures of long-term A/R aging. Your practice’s patient population and the amount of paper versus electronic claims being submitted can affect these numbers.

Claims from workers’ compensation, automobile accidents and out-of-state insurance carriers tend to take longer to process, Dr. Hassan explains. If your practice sees a high volume of these types of patients, your claims may take longer than average to process. A high volume of paper claims can also result in longer processing times: the average paper claim takes about a month to process, while electronic claims are frequently processed in as little as two weeks.

What do you do if you see a red flag?

When you see a red flag in the A/R Aging Report, that’s where the follow-up insurance reports come in: the Insurance Payment Trend and Insurance Collection reports can help you look into these potential claims issues on a more granular level. If the notes in your practice management software system don’t tell you why a particular claim was rejected, Veccie says, you may have to get on the phone with the insurance company. Figure out what you need to change in the system so that the next time you send the claim through, it will be paid: every time you have to resubmit a claim, your practice is losing valuable time and money.

One easy way to investigate rejected claims and reduce your practice’s number of resubmitted claims, says Dr. Hassan, is to verify the Current Procedural Terminology (CPT) codes being used—especially if it’s the beginning of a new year. Some CPT codes expire at the end of each year, and using an outdated code will cause a claim to automatically be rejected.

Most practices still don’t have an effective system in place for drilling down into these claims issues, Veccie says: they are still transitioning from traditional billing methods, which relied upon manually-kept lists and spreadsheets to track unpaid claims, to digital methods. By using billing software to generate these reports on a regular basis, any medical billing specialist can easily implement such a system.

#2: The Key Performance Indicators Report

Kareo’s Key Performance Indicators Report gets Manukian’s vote for the best. This report is the most useful, she says, because it provides a high-level view of key areas in your practice’s revenue cycle management process, allowing billers to identify changes and trends and spot potential problem areas. Dr. Hassan agrees that this report is extremely valuable, as it can help you identify which encounters and CPT codes are the most profitable for your practice.

Kareo, Manukian says, radically simplifies a billing process that, historically, took up to a month to complete by hand. “It was very time-consuming, since it involved running a series of different reports and then extracting the needed data and creating an analysis manually,” she says. “Today, the Kareo software offers this as a standard report that can be run in seconds, giving practices access to valuable data in real time.”

While this particular report is proprietary, the data it reflects could be compiled using a variety of accounting and billing reports found in most medical billing software programs. Dr. Hassan recommends running this report every week and comparing your findings to the previous week’s, so you can keep your finger on the pulse of your practice’s billing.

Kareo’s Key Performance Indicators Report.

What data does this report track? 

Kareo’s Key Performance Indicators report tracks total encounters; total number of procedures; total charges; total collections; outstanding A/R; and total adjustments. This report, Manukian says, allows billers to compare a variety of indicators from month to month and identify both positive and negative trends. This enables practices to keep doing what’s working, and change what isn’t.

What data do you hope to see, and what are some “red flags” to look for?

In the Key Performance Indicators report, naturally, you want to see steady or positive trends in your top indicators. Manukian lists several examples: if you have relatively steady charges, your collections should be relatively steady, as well. If your charges have been increasing, your collections should, too. If you’ve identified potential problem areas and have been working towards, for example, increasing overall collections, you’re looking for evidence that your work is paying off.

A red flag in the Key Performance Indicators report, says Manukian, is a variation in total collections. A sudden drop in collections that have historically been consistent could indicate a problem. And if charges increase one month, but collections don’t increase the following month, this might mean trouble, as well. Manukian also notes that you should keep an eye on claims’ average days in A/R. Your overall A/R should be decreasing: if not, dig deeper to see what’s going on behind the scenes.

What do you do if you see a red flag?

Manukian advises that, first and foremost, you look for an explanation behind any warning signs: for example, a decrease in collections this month should have been preceded by a decrease in charges last month. An increase in days in A/R could indicate an issue with a payer, or it could reflect a problem with patient collections. If there isn’t a simple explanation, look at your individual claims to see if you can identify the problem.

Additional reports can also be run to drill down into the underlying issue and help identify the root cause of any negative trend you spot in the initial report, says Manukian. For example, if you see a drop in collections, you may want to look at your A/R Aging Report or Insurance Collection report. If you see charges decrease, the Provider Productivity Report might have some answers. These types of reports can be found in most medical billing software programs.

#3: The Top Carrier/Insurance Analysis Report

Barron says that the ADP AdvancedMD Top Carrier/Insurance Analysis Report is the most useful for helping practices save time and money. This report also tracks revenue cycle metrics, providing practices with a snapshot of how the overall business is doing.

The Top Carrier/Insurance Analysis Report can be generated by the ADP AdvancedMD AdvancedInsight analytics engine, says Barron. For practices that don’t use ADP AdvancedMD’s software, some skillful use of Microsoft Excel can produce similar results.

AdvancedMD’s Top Carrier/Insurance Analysis Report.

What data does this report track? 

The ADP AdvancedMD Top Carrier/Insurance Analysis Report tracks the charges, payments and collections of your practice’s top 10 carriers—in other words, the payers and insurance companies that make up the majority of your practice’s business. The report also tracks payments, collections and CPT codes and units, allowing the practice to drill down into the charges, payments and collections for a specific CPT code. This report also provides important information practices can use to negotiate better pricing with payers and insurance companies.

Most importantly, the Top Carrier/Insurance Analysis Report tracks what Barron refers to as “the ultimate revenue cycle metric”: Collection Per Total Relative Value Unit (RVU). Physicians submit claims using CPT codes for the procedures they complete, and every CPT code has a total RVU assigned to it. This RVU helps determine how much your practice is paid for each of its services. By looking at the Collection Per Total RVU rate for given procedures, you can gauge how good your practice’s rates are, how you’re getting paid for certain procedures and how your revenue cycle is going.

What data do you hope to see, and what are some “red flags” to look for?

In the Top Carrier/Insurance Analysis Report, Barron notes, you’re hoping to see that all of your top commercial carriers have a Collection Per Total RVU that is higher than the current Medicare Conversion Factor (right now, this is $34.02: you want your top carriers to have a Collection Per Total RVU of about $40 – $50). You also want to see all of your top commercial carriers with very similar Collection Per Total RVU rates.

If the Collection Per Total RVU rates for your top carriers are lower than $34.02, you may not be collecting the right amount from your patients, Barron says. It’s also a red flag if there is a wide variation in the Collection Per Total RVU rates for your top carriers. If you find that one carrier is paying you a significantly lower amount for the same procedures, you may want to consider dropping the carrier or renegotiating your contract.

What do you do if you see a red flag?

Dropping a carrier that is paying you less than other top commercial carriers for the same procedures can save your practice as much as $50,000 a year, Barron says. You may also be able to renegotiate your contract to get a better rate. While some physicians may choose to keep even a carrier that doesn’t pay well to make things easier on their patients, you always want to make sure that you’re making a well-informed business decision.

Dr. Hassan agrees that it is very important to have all the facts before deciding whether or not to drop a low-paying carrier—and he adds that this decision should be made with as little emotion as possible. Dropping bad payers can be an essential move towards improving the overall health of your practice, he says.

No matter what software you’re using or which report you choose, make sure you’re running it regularly. Veccie recommends that you run reports at least two or three times per week; Dr. Hassan runs reports weekly. By simply taking the time to generate these reports now, you could save your practice countless man hours—and hundreds of thousands of dollars each year—in the long run.

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Holly Regan

About the Author

Holly Regan is a Managing Editor for Software Advice. Her work has appeared on many notable sites, including The New York Times, PRNews and oDesk. She has also contributed to works on top-tier publications such as Entrepreneur, the Wall Street Journal and Business Insider.

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