Billing Metrics

Zeroing in on Performance Improvement

Routinely Evaluate the Process

Administrator's Checklist

Many hospitals and occupational health providers have routinely begun to measure and benchmark customer satisfaction. For occupational providers this includes employers as well as patients. If you have only recently begun to measure employer satisfaction, you may not have experienced measurable results in your process improvements. But you can be certain that, over time, the impact to your bottom line will be measurable. It is important that you also evaluate specific areas of your operations to ensure quality and service, from the customer’s perspective. At a minimum, you should measure satisfaction in several important areas: program, physicians and staff, sales and marketing, physical facility, reports and results, and billing.

Billing Metrics

For each area of your program that your customer is evaluating, there are numerous, detailed metrics. But these days, the Billing process is an area where many providers are focusing their efforts, because of its potential for prompt results. For example, improvements in collections and cash flow can reduce your days in Accounts Receivable (A/R). Consequently, efforts here generally produce measurable financial results in a short amount of time (usually 90 days or less), depending on the types of problems you are having with collections and assuming you take the time to set up benchmarks before and after making changes.

For most customers, critical aspects of billing are:

• Accuracy
• Timeliness
• Being clear and understandable
• Customization
• Billing the correct party

For providers, critical billing metrics are:

• Amount in Accounts Receivable (% of billables that have yet to be collected)
• Days in Accounts Receivable (average number of days it takes to collect payment)
• Bad debt (write-offs and deductions)
• Discounts

You must also be aware that the client’s purchasing or accounting procedures can impact how these processes work, in turn, for you and your billing staff. Consequently, it is important to evaluate input from inside and outside the organization and identify processes that will work for both. If customers are complaining to the billing department, what assurance does program management have regarding tracking and monitoring those complaints and process improvements? Having an independent mechanism for monitoring your payer’s satisfaction with your billing process is essential.

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Zeroing in on Performance Improvement

A good place to start is a critical evaluation of your bill. Does it include all the essential information your customers need to process payments? The patient’s name, Social Security number, date of service (DOS), and the detail of services received are items that should be included. Does your bill also clearly indicate where payments are to be made, the phone number to call with questions or problems, and instructions to include the invoice or statement number on each payment (a critical piece of information that your billing clerks need to easily match payments to invoices)? Your bills should also note payment terms, e.g., due in 30 days.

What are your collection policies and procedures? Do you consistently (on a predefined schedule) re-bill and follow up with delinquent accounts? Do you have a progressive schedule of follow-up that eventually includes the marketing representative responsible for the account and staff in operations? The closer an account is to being turned over to collections or precluded from obtaining any additional services, the more critical communication with sales and operations becomes. What about authorization of workers’ compensation claims? Are bills suspended (preventing them from going to collections) until the claim is authorized and a claim number assigned? If a claim is sitting on the employer’s or carrier’s desk, do you have procedures in place for filing the claim and expediting the process in accordance with the workers’ compensation laws in your state?

Billing accuracy can be trickier to measure and, depending on who does charge entry in your system, can actually be a clinical, rather than a billing problem. Tracking of company complaints, EOBs (Explanation of Benefits), and the number of re-bills can point to problems, as can feedback from the billing department. Physician and staff training on workers’ compensation rules and coding processes along with routine audits of workers’ comp charts and a random selection of all other charts should give you a sense of your "error" rate and where physicians and staff can improve to ensure that an accurate charge is billed for every service rendered.

Unposted charges (services that have been rendered but not billed) are another common but hidden problem in clinics, since most clients do not call to let you know they were never billed for a service. Failure to post obviously affects the timeliness of bills and your profitability. Instituting daily and weekly processes (usually computer reports) to catch missed charges and holding managers accountable generally solves the problem in short order and will increase your revenues and the likelihood of collection, since any delay in billing generally reduces the chance of payment.

What about your bad debt and write-offs? Why are these occurring, and can they be prevented? Write-offs could be due to physician or staff ignorance about workers’ compensation rules regarding billing and coding. Bad debt may be due to failure to enforce payment policies. While neither of these line items will go away completely, every effort should be made to minimize their amounts and considerable assistance should come from the billing department in terms of feedback and ongoing communication with operations. Often, this information can be pulled into a standardized orientation process for staff performing data entry and new physicians and operations staff, who also play a critical but silent role in the billing process. On-going feedback and training should also be an organization priority since the rules of workers’ compensation billing are forever changing. Education concerning billing procedures should be viewed as a dynamic rather than static process.

Routinely Evaluate the Process

Sound billing and collections processes are important benchmarks that indicate your financial health and your standing with customers. No one likes to receive and pay bills. This is not a particularly positive process for anyone, even when it goes well. When things go wrong or are repeatedly problematic, billing quickly becomes an irritant for your customers—and one that may lie hidden to program managers unless diligence is taken to routinely evaluate the billing department, the courteousness and effectiveness of billing staff, and the organization’s overall billing processes. 

Administrator's Checklist

Do you conduct initial and ongoing training in billing practices for staff and physicians?

Are you routinely obtaining feedback from the billing department about EOBs?

Do you monitor and identify the most frequent billing errors?

Do you track percentage and days in A/R to monitor improvement in overall collections?

Are you tracking the number and type of billing complaints?

Do you monitor the billing processes for consistency?

Are bills/re-bills dropped on schedule?

Is a collection schedule followed?

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