An HFMA Forums Tool (hfma.org/forums)

A Collection of Revenue Cycle KPIs       

Scheduling Preregistration/Preauthorization Insurance Verification Patient Access/Registration Financial Counseling Health Information Management Charge Entry/Revenue Protection

3 6 8 10 13 16 22

Source: David Hammer, WeiserMazars LLP. Used with permission. 1

KPIs by Functional Area         

Billing/Claim Submission Third-Party and Guarantor Follow-Up Cashiering/Refunds/Adjustment Posting Denials Customer Service Collection/Outsourcing Vendors Physician Practice Management Managed Care Contracting Clinical Decision Support

28 33 38 41 46 49 52 57 76

2

KPIs by Functional Area Scheduling KPI Description 1. Overall scheduling rate of potentially eligible patients:

Standard 100%



Scheduling rate for elective and urgent inpatients

100%



Scheduling rate for ambulatory surgery patients

100%



Scheduling rate for high-dollar outpatient diagnostic patients

100%

2. Scheduled patients’ preregistration rate

98%

3

KPIs by Functional Area Scheduling KPI Description

Process

1. Use online scheduling software organizationwide?

Yes

2. Have central scheduling unit?

Yes

3. Central scheduling answers to chief revenue officer?

Yes

4. Surgery uses same scheduling software as other departments?

Yes

5. Scheduling system integrated with registration system?

Yes

6. Use online outpatient medical necessity system prior to service?

Yes

7. Precertification requirements shared with physicians’ offices?

Yes

4

KPIs by Functional Area Scheduling KPI Description

Process

8. Physicians and patients able to make online appointment requests?

Yes

9. Nonemergency services scheduled 12+ hours in advance?

Yes

10. Process and IT integrated between scheduling and preregistration?

Yes

11. Services postponed if not preauthorized in advance?

Yes

12. Financial counseling part of scheduling process?

Yes

 Patient balances and payment obligations discussed?

Yes

 Hospital policy for point-of-service payment explained?

Yes

 Reminder to bring required payment and insurance cards given?

Yes

5

KPIs by Functional Area Preregistration/Preauthorization KPI Description

Standard

1. Overall preregistration rate of scheduled patients

≥ 98%

2. Overall insurance verification rate of preregistered patients

≥ 98%

3. Deposit request rate for copayments and deductibles

≥ 98%

4. Deposit request rate for elective admissions/procedures

≥ 100%

5. Deposit request rate for prior unpaid balances

≥ 98%

6. Data quality compared to pre-established department standards

≥ 99%

6

KPIs by Functional Area Preregistration/Preauthorization KPI Description

Process

1. Have dedicated preregistration/preauthorization unit?

Yes

2. Process and IT integrated between scheduling and preregistration?

Yes

3. Services postponed if not preauthorized in advance?

Yes

4. Financial counseling part of preregistration/preauthorization process?

Yes

 Patient balances and payment obligations discussed?

Yes

 Hospital policy for point-of-service payment explained?

Yes

 Reminder to bring required payment and insurance cards given?

Yes

7

KPIs by Functional Area Insurance Verification KPI Description

Standard

1. Overall insurance verification rate of scheduled patients

≥ 98%

2. Overall insurance verification rate of preregistered patients

≥ 98%

3. Insurance verification rate of unscheduled inpatients within one day

≥ 98%

4. Insurance verification rate of unscheduled high-dollar outpatients within one day

≥ 98%

5. Data quality compared to pre-established department standards

≥ 99%

8

KPIs by Functional Area Insurance Verification KPI Description

Process

1. Have dedicated insurance verification unit?

Yes

2. Process and IT integrated between insurance verification/patient access?

Yes

3. Use online insurance verification system?

Yes

4. Financial counseling part of insurance verification process?

Yes

 Alternate arrangements for noncovered patients explored?

Yes

 Hospital policy for point-of-service payment explained?

Yes

 Reminder to bring required payment and insurance cards given?

Yes

9

KPIs by Functional Area Patient Access/Registration KPI Description

Standard

1. Average registration interview duration

≤ 10 min

2. Average patient wait time

≤ 10 min

3. Average inpatient registrations per registrar/per shift

35

4. Average outpatient registrations per registrar/per shift

40

5. Average emergency department registrations per registrar/per shift

40

6. Data quality compared to pre-established department standards

≥ 99%

7. Advance beneficiary notices (ABNs)/Medicare secondary payer questionnaires (MSPQs) obtained when required

100%

8. Master patient index (MPI) duplicates created daily as a percentage of total registrations

≤ 1%

10

KPIs by Functional Area Patient Access/Registration KPI Description

Process

1. Patient Access reports to chief revenue officer?

Yes

2. All registrars report to patient access or within revenue cycle?

Yes

3. Use online document imaging system?

Yes

4. Financial counseling part of patient access process?

Yes

 Patient balances and other payment obligations collected?

Yes

 Policy for payment alternatives explained (credit cards, etc.)?

Yes

 Copies of required payment and insurance cards obtained?

Yes

11

KPIs by Functional Area Patient Access/Registration KPI Description

Process

5. Registrars’ incentive compensation tied to quality indicators?

Yes

6. Registration system integrated/interfaced to patient financial services system?

Yes

7. Use online/web-enabled patient self-registration system?

Yes

8. Use online outpatient medical necessity system prior to service?

Yes

9. Use online registration data quality tracking system?

Yes

10. Have online interface to owned physicians’ registration systems?

Yes

12

KPIs by Functional Area Financial Counseling KPI Description

Standard

1. Collection of elective services deposits prior to service

100%

2. Collection of inpatient patient-pay balances prior to discharge

≥ 65%

3. Collection of outpatient patient-pay balances prior to service

≥ 75%

4. Collection of emergency department patient-pay balances prior to departure

≥ 50%

5. Screening of uninsured inpatients and high-balance outpatients for financial assistance

≥ 98%

6. Payment arrangements for noncharity eligible inpatients/highbalance outpatients

≥ 98%

7. Prompt-payment discount percentage(s)

05 – 20%

13

KPIs by Functional Area Financial Counseling KPI Description

Process

1. Financial counseling reports to chief revenue officer?

Yes

2. Uninsured inpatients and high-balance outpatients screened for financial assistance?

Yes

 Medicaid eligibility?

Yes

 State, local, and hospital charity programs?

Yes

 Grants/studies, etc.?

Yes

3. Financial counselors interview patients in their rooms?

Yes

4. Prompt-payment discounts offered?

Yes

14

KPIs by Functional Area Financial Counseling KPI Description

Process

5. Financial counselors’ incentive compensation tied to collections?

Yes

6. Discuss payment alternatives with noncharity eligible patients?

Yes

 Credit cards?

Yes

 Bank-loan financing?

Yes

 Interest-bearing hospital-funded payment arrangements?

Yes

7. All inpatients cleared through financial counselors before discharge?

Yes

8. Proof of income/assets obtained from charity applicants?

Yes

15

KPIs by Functional Area Health Information Management KPI Description

Standard

1. Inpatient charts coded per coder/per day

20 - 24

2. Observation charts coded per coder/per day

32 - 36

3. Ambulatory surgery charts coded per coder/per day

32 - 36

4. Outpatient charts coded per coder/per day

130 - 210

5. Emergency department charts coded per coder/per day

130 - 210

6. Chart delinquency greater than 30 days 7. Total chart delinquency

≤ 5% ≤ 10%

16

KPIs by Functional Area Health Information Management KPI Description 8. Health information management “DRG development” hold greater than late charge hold

9. Copies of medical records pursuant to payers’ requests 10. Transcription rate per line

Standard ≤ 2 A/R days

≤ 2 work days 08 – 12¢

11. Transcription backlog

≤ 1 work day

12. Chart retrieval pursuant to physicians’ requests

≤ 90 minutes

13. Master patient index (MPI) duplicates as a percentage of total MPI entries

≤ .5%

14. PEPPER1 potential “over-codes” beyond 75th percentile

≤ 2%

15. PEPPER potential “under-codes” below 10th percentile

≤ 2%

1

Program for Evaluation Payment Patterns Electronic Report

17

KPIs by Functional Area Health Information Management KPI Description

Process

1. Health information management reports to chief revenue officer?

Yes

2. Use online DRG and APC groupers?

Yes

3. Use online, barcode enabled chart location system?

Yes

4. Use online, scanning-enabled HIM records imaging system?

Yes

5. Use online and/or voice-recognition transcription system?

Yes

6. Use online clinical abstracting system?

Yes

7. Physicians able to view and/or e-sign records outside the hospital?

Yes

18

KPIs by Functional Area Health Information Management KPI Description

Process

8. Storage/retrieval/release of records HIPAA-compliant?

Yes

9. Use online, up-to-date coding compliance system?

Yes

10. All coding done by employees reporting to health information management director?

Yes

11. All coding done by certified coders who are retrained often?

Yes

12. All coding done in descending balance order, not first in/first out?

Yes

13. All coding done in “best payer” order (fee for service, MCR, HMO)?

Yes

14. All coding done when information is sufficient, not 100 percent complete?

Yes

19

KPIs by Functional Area Health Information Management KPI Description

Process

15. Receive and discuss denials information provided by patient financial services or others?

Yes

16. Provide and discuss denials/delinquency information with physicians?

Yes

17. Have effective tracking system to locate missing records?

Yes

18. Have appropriate staffing to prevent process backlogs?

Yes

19. Consistently monitor/control discharged not final billed (DNFB) A/R due to HIM?

Yes

20. Perform internal quality-control audits at least quarterly?

Yes

21. Have external quality-control audits done at least annually?

Yes

20

KPIs by Functional Area Health Information Management KPI Description

Process

22. Review PEPPER to compare MCR payments with state and national averages?

Yes

23. Use PEPPER to identify problem-prone DRGs?

Yes

24. Use PEPPER/OIG work plans to focus internal reviews?

Yes

25. Track/trend all outside record-audit requests?

Yes

26. Self-review all charts selected for audit by RACs/others?

Yes

27. Submit all self-reviews with “things done right” cover letters?

Yes

21

KPIs by Functional Area Charge Entry/Revenue Integrity KPI Description 1. Late charge hold period

Standard 2 – 4 days

2. Late charges as a percentage of total charges

≤ 2%

3. Lost charges as a percentage of total charges

≤ 1%

4. Charge description master duplicate items

0

5. Charge description master incorrect/missing HCPCS/CPT-4 codes

0

6. Charge description master incorrect/invalid revenue codes

0

7. Charge description master revenue code lacks necessary HCPCS/CPT-4 code

0

22

KPIs by Functional Area Charge Entry/Revenue Integrity KPI Description

Standard

8. Charge description master item has invalid/incorrect modifier

0

9. Charge description master item has missing modifier

0

10. Charge description master item price less than Hospital Outpatient Prospective Payment System ambulatory payment classification

0

11. Charge description master item price is $0

0

12. Charge description master item description is “miscellaneous”

0

13. Charge description master item description/price is editable online

0

23

KPIs by Functional Area Charge Entry/Revenue Integrity KPI Description

Process

1. Charge description master coordinator reports to chief revenue officer?

Yes

2. Have formal charge description master change management process?

Yes

3. Have formal annual charge description master review process with clinical departments?

Yes

4. Modifiers “static coded” in charge description master; chosen via order-entry system?

Yes

5. All charge items ordered via online order-entry system?

Yes

6. Late/lost charge performance standards in department managers’ job descriptions?

Yes

7. Annual HCPCS/CPT-4 changes in place by January each year?

Yes 24

KPIs by Functional Area Charge Entry/Revenue Integrity KPI Description

Process

8. Surgery HCPCS/CPT-4 appear in UB-04 form locator 44?

Yes

9. Surgery lab/X-ray charges properly unbundled?

Yes

10. Charge description master pricing methodology standardized/defensible?

Yes

11. Departments understand difference between “billable”/“payable?”

Yes

12. Charge description master items have Patient Friendly Billing® descriptions?

Yes

13. Have formal annual charge sheet/ticket review process?

Yes

14. Receive/review CPT-4 manual/addendum B annually?

Yes

25

KPIs by Functional Area Charge Entry/Revenue Integrity KPI Description

Process

15. Nursing procedures (CPR, infusion, etc.) built into charge description master?

Yes

16. Health information management assigns interventional/surgical procedure codes?

Yes

17. Emergency department nursing levels match Medicare descriptions?

Yes

18. Physicians’ outpatient orders received with requisite CPT-4 code(s)?

Yes

19. Order entry items map accurately to service codes?

Yes

20. Charge tickets, etc., map accurately to service codes?

Yes

21. Appropriate charge in charge description master for all services delivered?

Yes

26

KPIs by Functional Area Charge Entry/Revenue Integrity KPI Description

Process

22. Charge data flow reliably from points of service to claims?

Yes

23. Modifiers are conveyed correctly/reliably to claims?

Yes

24. Correct Coding Initiative (CCI) edit conflicts controlled by correct registration/charge entry?

Yes

25. Units of service accurate/flow reliably to claims?

Yes

26. Clinical departments’ “charge awareness” monitored/enhanced?

Yes

27

KPIs by Functional Area Billing/Claim Submission KPI Description 1. HIPAA-compliant electronic claim submission rate 2. Final-billed/claim not submitted backlog

Standard 100% ≤ 1 A/R day

3. Medicare supplement insurance billing following adjudication

≤ 2 bus days

4. Non-Medicare COB-2 insurance billing following COB-1 payment

≤ 2 bus days

5. Medicare Return To Provider (RTP) denials rate 6. Outsourced guaranteed statement cost to produce/mail (with/without stamp)

≤ 3% 20 - 25¢

28

KPIs by Functional Area Billing/Claim Submission KPI Description

Process

1. Primary/secondary billing completed by dedicated team?

Yes

2. Staffing sufficient to minimize/prevent billing backlogs?

Yes

3. Quantity/quality performance standards part of billers’ job descriptions?

Yes

4. Perform regular quality control reviews of billers’ work?

Yes

5. All billers finish CMS’s Medicare billing training?

Yes

6. All billers receive annual Medicare compliance training?

Yes

7. Billers cross-trained on more than one payer type?

Yes

29

KPIs by Functional Area Billing/Claim Submission KPI Description 8. Use online electronic billing system?

Process Yes

 Easy to add new billing edits?

Yes

 Automatic daily downloads from patient financial services system?

Yes

 Provides final-bill download reconciliation reports?

Yes

 Provides biller-specific worklists?

Yes

 Major-payer edits supplied/supported by vendor?

Yes

 Claim-submit notice automatically uploaded to patient financial services system?

Yes

 Claim corrections automatically uploaded to patient financial services system?

Yes 30

KPIs by Functional Area Billing/Claim Submission KPI Description 8. Use online electronic billing system?

Process Yes

 All claims (paper + electronic) editable?

Yes

 Standard errors automatically corrected?

Yes

 Provides biller-specific productivity and error reporting?

Yes

 Provides clinical department-specific error reporting?

Yes

 Automates Medicare-supplement/COB-2 claim submission?

Yes

 Interfaces with online Medicare-compliance system?

Yes

31

KPIs by Functional Area Billing/Claim Submission KPI Description

Process

9. Use Patient Friendly Billing® concepts for guarantor billing?

Yes

10. Use proration to bill insurance and guarantor simultaneously?

Yes

11. Guarantor statements include credit card option?

Yes

12. Guarantor statements clearly communicate payment policies?

Yes

13. Guarantor statements provide customer service phone number?

Yes

14. Guarantor statements provide customer service web address?

Yes

15. Guarantor billing cycle designed to optimize collections?

Yes

32

KPIs by Functional Area Third-Party and Guarantor Follow-Up KPI Description 1. Insurance A/R aged more than 90 days from service/discharge

Standard ≤ 15 - 20%

2. Insurance A/R aged more than 180 days from service/discharge

≤ 5%

3. Insurance A/R aged more than 365 days from service/discharge

≤ 2%

4. Bad debt write-offs as a percentage of gross revenue

≤ 3%

5. Charity write-offs as a percentage of gross revenue

≤ 3%

6. Cost-to-collect ([patient access + patient financial services + agency expenses] ÷ cash)

≤ 3%

7. A/R cash as a percentage of net revenue

≥ 100%

33

KPIs by Functional Area 3rd-Party and Guarantor Follow-Up KPI Description 8. In-house A/R days

9. Discharge not final billed (DNFB) A/R days 10. Net A/R days

11. A/R cash as a percentage of cash goal 12. Total point-of-service cash as a percentage of cash goal

Standard ≤ ALOS (Average length of stay)

≤ 4 – 6 A/R days ≤ 50 A/R days

≥ 100% ≥ 2 - 3%

34

KPIs by Functional Area Third-Party and Guarantor Follow-Up KPI Description

Process

1. High-balance follow-up completed by dedicated team?

Yes

2. Staffing sufficient to minimize/prevent aged A/R build-up?

Yes

3. Quantity/quality performance standards part of collectors’ job descriptions?

Yes

4. Perform regular quality control reviews of collectors’ work?

Yes

5. All collectors finish CMS’s Medicare billing module?

Yes

6. All collectors receive annual Medicare compliance training?

Yes

7. Collectors cross-trained on more than one payer type?

Yes

35

KPIs by Functional Area Third-Party and Guarantor Follow-Up KPI Description 8. Use online “receivables work station” system?

Process Yes

 Easy to add new collector assignments?

Yes

 Automatic daily downloads from patient financial services system?

Yes

 Provides download reconciliation reports?

Yes

 Full interface for collection notes, etc., to patient financial services system?

Yes

 Provides collector-specific worklists?

Yes

 Worklists presented in descending-balance order?

Yes

 Next activity date automatically uploaded to patient financial services system?

Yes

36

KPIs by Functional Area Third-Party and Guarantor Follow-Up KPI Description

Process

9. Use online, web-enabled third-party payer inquiry system(s)?

Yes

10. Guarantor follow-up outsourced or on predictive dialer?

Yes

11. Collectors receive third-party/guarantor follow-up training?

Yes

12. Collectors use third-party/guarantor follow-up scripts?

Yes

13. Collectors have no competing duties (customer service, etc.)?

Yes

14. Collectors receive performance-based incentive compensation?

Yes

37

KPIs by Functional Area Cashiering/Refunds/Adjustment Posting KPI Description 1. HIPAA-compliant electronic payment posting percentage

Standard 100%

2. Transaction posting backlog (during the month)

≤ 1 bus day

3. Transaction posting backlog (end of the month)

0 bus days

4. Credit-balance A/R days (gross)

5. Medicare credit-balance report submission timeliness

≤ 2 A/R days

≤ due date

38

KPIs by Functional Area Cashiering/Refunds/Adjustment Posting KPI Description

Process

1. Cashiering completed by dedicated team with no other duties?

Yes

2. Refunds completed by dedicated team with no other duties?

Yes

3. Quantity/quality performance standards part of cashiers’ job descriptions?

Yes

4. Perform regular quality control reviews of cashiers’ work?

Yes

5. All cashiers receive annual Medicare compliance training?

Yes

6. Cashiers cross-trained on more than one payer type?

Yes

39

KPIs by Functional Area Cashiering/Refunds/Adjustment Posting KPI Description

Process

8. Use lockbox for non-electronic/non-EDI payments?

Yes

9. Lockbox remits payment data electronically/EDI/OCR/835?

Yes

10. Denial transaction codes entered to facilitate follow-up?

Yes

11. Use online system to compare expected versus actual payments?

Yes

12. Post contractual adjustments at time of final billing?

Yes

40

KPIs by Functional Area Denials/Underpayments KPI Description

Standard

1. Overall initial denials rate (percent of gross revenue)

≤ 4%

2. Clinical initial denials rate (percent of gross revenue)

≤ 5%

3. Technical initial denials rate (percent of gross revenue)

≤ 3%

4. Underpayments additional collection rate 5. Appealed denials overturned rate

≥ 75% 40 – 60%

41

KPIs by Functional Area Denials/Underpayments KPI Description

Standard

6. Electronic eligibility rate

≥ 75%

7. Physician precertification double-check rate

100%

8. Case managers’ time spent securing authorizations rate

≤ 20%

9. Total denial reason codes

≤ 25

42

KPIs by Functional Area Denials/Underpayments KPI Description

Process

1. Denials tracked by payer, reason, financial consequence?

Yes

2. Denials distinguished between technical and clinical?

Yes

3. Denials tracked by physician, DRG, and department?

Yes

4. Contractual allowances increasing slower than gross revenue?

Yes

5. Dedicated denials unit with payer-specific appeals experience?

Yes

6. Respond to clinical documentation requests within 14 days?

Yes

7. Use online system to compare expected versus actual payments?

Yes

43

KPIs by Functional Area Denials/Underpayments KPI Description

Process

8. Use online payment tracking software?

Yes

9. Use online contract management software?

Yes

10. Maintain denials database; self-developed or purchased?

Yes

11. Use online outpatient medical necessity system prior to billing or service?

Yes

12. All denial reason codes actionable?

Yes

13. Observation and inpatient authorizations tracked separately?

Yes

14. Precertification, authorization, and recertification functions in a single department?

Yes

44

KPIs by Functional Area Denials/Underpayments KPI Description

Process

15. Precertification requirements shared with physicians’ offices?

Yes

16. Provide physicians with regular feedback on clinical denials rates?

Yes

17. Hold regular payer meetings to discuss denials issues?

Yes

18. Contract terms regularly distributed to revenue cycle employees?

Yes

19. Revenue cycle employees learn of contract changes in advance?

Yes

20. Structured feedback between revenue cycle and managed care depts?

Yes

21. Nonemergency services scheduled 12+ hours in advance?

Yes

45

KPIs by Functional Area Customer Service KPI Description 1. Correspondence backlog

Standard ≤ 1 bus day

2. Walk-in patients’ wait time

≤ 5 min

3. ACD (automated call distribution) system average hold time

≤ 2 min

4. ACD system abandoned call percentage (calls on hold ≥ 30 seconds)

≤ 2%

5. ACD system percentage of calls answered in ≤ 20 seconds

≥ 75%

6. ACD system percentage of calls resolved in ≤ 5 minutes

≥ 85%

7. ACD system percentage of calls not resolved in ≥ 10 minutes

≤ 5%

8. Calls resolved in unit, without complaint/referral to director of patient financial services

≥ 95% 46

KPIs by Functional Area Customer Service KPI Description

Process

1. Customer service handled by dedicated team with no other duties?

Yes

2. Customer service unit responsible for walk-ins, phone calls, mail, and e-mail?

Yes

3. Quantity/quality performance standards part of customer service representatives’ job descriptions?

Yes

4. Perform regular quality control reviews of customer service representatives’ work?

Yes

5. All customer service representatives receive annual Medicare compliance training?

Yes

6. Customer service representatives cross-trained on more than one responsibility?

Yes

47

KPIs by Functional Area Customer Service KPI Description

Process

7. Customer service representatives cross-trained on most/all patient financial services system functions?

Yes

8. Use voicemail system so patients can request basic information/itemized bills?

Yes

9. Use ACD (automated call distribution) system?

Yes

10. ACD system automatically maintains unit/rep statistics?

Yes

48

KPIs by Functional Area Collection/Outsourcing Vendors KPI Description 1. Bad debt netback ([collections – fees] ÷ placements) percent 2. Bad debt fee percent

3. Third-party extended business office (EBO) fee percent (inpatient + outpatient + emergency department blend)

Standard 7 – 11% 15 – 18%

6 - 10%

4. Self-pay EBO fee percent (inpatient + outpatient + emergency department blend)

10 – 12%

5. Legal collections fee percent

20 – 30%

6. Medicaid eligibility assistance fee percent

12 – 18%

49

KPIs by Functional Area Collection/Outsourcing Vendors KPI Description

Process

1. Use two or more bad debt agencies?

Yes

2. Use different agencies for bad debt and extended business office (EBO)?

Yes

3. Write off long-term payment accounts/use agency to monitor?

Yes

4. Apply Medicare bad debt “120 days” rule to all financial classes?

Yes

5. Agencies/outsource vendors accept referrals electronically?

Yes

6. EBO vendor able to “mirror” patient financial services system to get notes, etc.?

Yes

7. Medicaid eligibility vendor have good relations with state agencies?

Yes

50

KPIs by Functional Area Collection/Outsourcing Vendors KPI Description

Process

8. Agencies remit gross payments/submit invoices for fees?

Yes

9. Agencies willing to put own support FTEs onsite?

Yes

10. Agencies willing to assign dedicated FTEs to your accounts?

Yes

51

KPIs by Functional Area Physician Practice Management KPI Description 1. Visits without charges as percentage of total visits

Standard 0%

2. Copayment collections as percentage of total copayment office visits

≥ 95%

3. EDI claims as percentage of total claims

≥ 90%

4. Charge-entry lag period 5. Claims passing claim edits as percentage of total claims 6. Appointment no-show rate

≤ 1 bus day ≥ 98% ≤ 2 - 3%

52

KPIs by Functional Area Physician Practice Management KPI Description 7. Appointment bumped rate 8. Net A/R days (nonspecialty practices)

9. Collections as percentage of net revenue

Standard ≤ 2 - 3% ≤ 40 days

≥ 100%

10. Collections as percentage of gross revenue (nonspecialty practices)

≥ 60%

11. Third-Party A/R aging > 90 days from service date

≤ 10%

12. Denials as percentage of net revenue (including “incidental to” services)

≤ 2%

53

KPIs by Functional Area Physician Practice Management KPI Description 13. Claims with no activity > 90 days from last activity date

Standard 0%

14. Credit balances

≤ 2 A/R days

15. Average patient wait time after office arrival

≤ 15 minutes

54

KPIs by Functional Area Physician Practice Management KPI Description

Process

1. Send voice and mail reminders for regular annual visits?

Yes

2. Send voice and mail reminders for other scheduled visits?

Yes

3. Use “open scheduling”

Yes

 to increase walk-in capacity?

Yes

 to minimize appointment bumping?

Yes

 to increase patient satisfaction?

Yes

 to reduce nursing callbacks?

Yes

55

KPIs by Functional Area Physician Practice Management KPI Description

Process

4. Calculate net revenue and net receivables?

Yes

5. Use dedicated billing/follow-up FTEs with no other duties?

Yes

6. Use collection agencies?

Yes

Source: David Hammer, WeiserMazars LLP. Used with permission.

56

KPIs by Functional Area Managed Care Contracting KPI Description 1. Rate increases compared to CPI medical-care component 2. Outlier dollar fraction of total contract revenue 3. Contract profitability compared to IRR “hurdle rate” 4. Eligibility/authorization/certification availability 5. Retro review/timely filing periods (keep in balance) 6. Termination notification period (without cause)

Standard ≥ CPI MCC ± 5% ≥ IRR HR 24/7/365 90–120 days 90 days

7. Renegotiation planning begins prior to renewal date

6 months

8. Optimal contract term

2–3 years

Source: Stevenson, “Managed Care Cycle Provides Contract Oversight,” hfm

57

KPIs by Functional Area Managed Care Contracting KPI Description

Process

1. Contract contains automatic renewal clause?

Yes

2. Contract contains inflation index?

Yes

3. All hospital services included/specific exclusions defined?

Yes

4. Termination notification period equals 90 days?

Yes

5. Duties for ongoing patient care/payment at termination defined?

Yes

6. ABN or equivalent acceptable for non-covered services?

Yes

7. Provider authorized to bill guarantor for non-covered services?

Yes

8. Hospital-based MDs use hospital-obtained authorizations?

Yes

Source: “Managed Care Forum Contracting Checklist,” HFMA Wants You to Know

58

KPIs by Functional Area Managed Care Contracting KPI Description

Process

9. Provider authorized to collect deposits for non-covered services?

Yes

10. Contract discloses all sub-contracting relationships?

Yes

11. Contract contains an independent contractor clause?

Yes

12. Contract excludes “most favored nation” provisions?

Yes

13. Contract start date clearly defined (to prevent A/R buildup)?

Yes

14. Contract stipulates all parties pay own legal fees?

Yes

15. Definition/criteria for all key terms clearly stipulated?

Yes



Medical necessity?

Yes



Emergency condition/emergency admission?

Yes

Source: “Managed Care Forum Contracting Checklist,” HFMA Wants You to Know

59

KPIs by Functional Area Managed Care Contracting KPI Description 15. Definition/criteria for all key terms clearly stipulated (continued)?

Process Yes



Trauma/trauma services/trauma team?

Yes



Covered services?

Yes



Material breach?

Yes



Prompt payment?

Yes



Stop-loss/outlier?

Yes



Carve-out?

Yes



Medicare rate (should include pass-throughs)?

Yes

Source: “Managed Care Forum Contracting Checklist,” HFMA Wants You to Know

60

KPIs by Functional Area Managed Care Contracting KPI Description 15. Definition/criteria for all key terms clearly stipulated (continued)?

Process Yes



Sentinel event(s)?

Yes



Medical-loss ratio?

Yes



Silent PPO?

Yes



Clean claim?

Yes



Timely notification/timely filing?

Yes



Authorization/certification?

Yes

Source: “Managed Care Forum Contracting Checklist,” HFMA Wants You to Know

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KPIs by Functional Area Managed Care Contracting KPI Description 15. Definition/criteria for all key terms clearly stipulated (continued)?

Process Yes



Service level(s)?

Yes



Denial/rejection/null event?

Yes



Negotiation/mediation/arbitration?

Yes



Plan agreement?

Yes



Inpatient/outpatient/emergency patient/observation patient?

Yes



Substantial impact?

Yes



Member/insured/dependent?

Yes

Source: “Managed Care Forum Contracting Checklist,” HFMA Wants You to Know

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KPIs by Functional Area Managed Care Contracting KPI Description 16. Advance notice time for contract changes clearly stipulated?

Process Yes



Payment/reimbursement rates?

Yes



Covered services/procedures?

Yes



Plan documents/requirements?

Yes



Major employer groups?

Yes

17. Contract includes warranty of HIPAA compliance?

Yes

18. Contract forbids reassignment without mutual consent?

Yes

19. Payer’s reporting requirement duties clearly stipulated?

Yes

Source: “Managed Care Forum Contracting Checklist,” HFMA Wants You to Know

63

KPIs by Functional Area Managed Care Contracting KPI Description

Process

20. Contract clearly material to provider’s revenue stream?

Yes

21. Eligibility verification process clearly stipulated?

Yes

22. Medical necessity verification process clearly stipulated?

Yes

23. Prior authorization process clearly stipulated?

Yes

24. Payer provides all customers’ contract/policy manuals?

Yes

25. Payer provides copies of all administrative/policy manuals?

Yes

26. Appeal/independent review processes clearly stipulated?

Yes

27. Payer precluded from changing reimbursement unilaterally?

Yes

Source: “16 Questions to Ask Before Signing a Managed Care Contract,” American Medical Association, Private Sector Unit

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KPIs by Functional Area Managed Care Contracting KPI Description

Process

28. Payer’s prompt payment duty clearly stipulated?

Yes

29. Payer agrees to pay interest on late payments?

Yes

30. Contract complies with statutory processing/payment duties?

Yes

31. Payer precluded from “take-backs”/“offsets”?

Yes

32. “Retro review” period balanced to “timely filing” period?

Yes

33. Contract precludes participating in/enabling “silent PPOs”?

Yes

34. Termination provisions/timing clearly stipulated?

Yes

35. Contract terms supersede provisions in provider manual?

Yes

Source: “16 Questions to Ask Before Signing a Managed Care Contract,” American Medical Association, Private Sector Advocacy Unit 65

KPIs by Functional Area Managed Care Contracting KPI Description 36. Perform annual “internal” analysis of all contracts?

Process Yes



Contractual discounts balanced to gross volumes/net revenue?

Yes



Use analysis to identify renegotiation/termination targets?

Yes



Compare all contracts to Medicare fee schedule?

Yes



Calculate relative profitability using payer-specific costs?

Yes



All contracts cover their direct costs, at minimum?

Yes



Use relative profitability for leverage during renegotiation?

Yes



Recognize internal review cannot I.D. below-market contracts?

Yes



Recognize internal review silent on case mix/stop-loss/etc.?

Yes

Source: Wilson, David, et al., “3 Steps to Profitable Managed Care Contracts,” hfm

66

KPIs by Functional Area Managed Care Contracting KPI Description 37. Perform annual “external” analysis of all contracts?

Process Yes



Compare (legally) your rates to those of similar providers?

Yes



Use outside firms/databases to obtain comparative information?

Yes



Challenge data’s age/geographic relevance before using?

Yes



Compare specific service lines, as well as overall rates?

Yes



Target biggest upside opportunities during renegotiation?

Yes



Compare payment structures (charge percentage divided by DRGs) plus overall rates?

Yes



Understand impact of inpatient stop-loss/outpatient maximumpay clauses?

Yes



Try to end all “cost-plus” payments in favor of percentage of charges?

Yes

Source: Wilson, David, et al., “3 Steps to Profitable Managed Care Contracts,” hfm 67

KPIs by Functional Area Managed Care Contracting KPI Description 37. Perform annual “external” analysis of all contracts (continued)? 

Review contract language, especially key terms/clauses?

Process Yes Yes

 Claim submission and payment?

Yes

 Protection against catastrophic cases?

Yes

 Procedure-based carve-out payments?

Yes

 Stop-loss payment structures?

Yes

 Payments for implants/prosthetics/orthotics/high-dollar drugs?

Yes

 Cut-off date for timely filing/retrospective review/refunds/etc.?

Yes

 Utilization review process?

Yes

 New services/technologies?

Yes

Source: Wilson, David, et al., “3 Steps to Profitable Managed Care Contracts,” hfm 68

KPIs by Functional Area Managed Care Contracting KPI Description 37. Perform annual “external” analysis of all contracts (continued)?

Process Yes



Compare payment levels to premium increases?

Yes



Ensure rate trends mirror premium increase trends?

Yes



Compare payers’ relative profitability trends?

Yes



Compare rate trends to medical care component of CPI?

Yes

Source: Wilson, David, et al., “3 Steps to Profitable Managed Care Contracts,” hfm

69

KPIs by Functional Area Managed Care Contracting KPI Description 38. Conduct annual “payment performance” analysis of all contracts?

Process Yes



Contracts comply with statutory processing/payment regulations?

Yes



Report habitual violators to insurance commissioner?

Yes



Compare payers’ denial/payment discrepancy trends, by group?

Yes

 Insurance plan?

Yes

 Patient type?

Yes

 Service line?

Yes

 Reason code?

Yes

 Physician?

Yes

Source: Wilson, David, et al., “3 Steps to Profitable Managed Care Contracts,” hfm

70

KPIs by Functional Area Managed Care Contracting KPI Description

Process

39. Contract defines documentation required to prove timely filing?

Yes

40. Contract reviewed by attorney before renewal?

Yes

41. “Soft” contract provisions (“quality”/“affordable”) avoided?

Yes

42. “Reasonable efforts” term used to define providers’ duties?

Yes

43. Both parties agree not to disclose negotiated rates?

Yes

44. Supplemental documents included by reference/attached?

Yes

45. Amendments required in writing with mutual signatures?

Yes

46. Participating corporations/entities clearly stipulated?

Yes

47. Assignment clauses clearly stipulated/require signatures?

Yes

Source: Miller, Thomas, “Conducting a Managed Care Contract Review,” hfm, January 1998

71

KPIs by Functional Area Managed Care Contracting KPI Description

Process

48. “Start-up” payers post security deposit/letter of credit/etc.?

Yes

49. Contract parties independent and able to compete?

Yes

50. Provider listed as “participating” in directories/websites?

Yes

51. Complete list of covered services attached to contract?

Yes

52. Provider can reduce malpractice insurance to state law minimums?

Yes

53. Ambiguous service descriptions avoided?

Yes



Avoid “services including but not limited to”?

Yes



Avoid “services customarily provided”?

Yes



Avoid “services covered by the plan”?

Yes

Source: Miller, Thomas, “Conducting a Managed Care Contract Review,” hfm, January 1998

72

KPIs by Functional Area Managed Care Contracting KPI Description 54. Services not directly provided defined/contracted in advance?

Process Yes



Out-of-area services?

Yes



Hospital-based physician services?

Yes

55. Capitation rates/benefits design (if any) clearly stipulated?

Yes

56. Flat-rate contracts with payers known for excessive bundling?

Yes

57. Licensing/Joint Commission standards adequate for credentialing?

Yes

58. Provider not required to report “in accordance with HEDIS?”

Yes

59. Contract/payment terms administratively feasible?

Yes

60. Current HIS adequate to handle contract terms/A/R needs?

Yes

Source: Miller, Thomas, “Conducting a Managed Care Contract Review,” hfm, January 1998

73

KPIs by Functional Area Managed Care Contracting KPI Description 61. Mutual information requirements clearly stipulated?

Process Yes



Specific information/reports described?

Yes



“Information including but not limited to” avoided?

Yes



Provider’s confidential/proprietary information protected?

Yes



Provider’s duty to provide information to payer strictly limited?

Yes



Payer obligated to reimburse costs of providing records?

Yes

Source: Miller, Thomas, “Conducting a Managed Care Contract Review,” hfm, January 1998

74

KPIs by Functional Area Managed Care Contracting KPI Description

Process

62. Mutual duties regarding care reviews clearly stipulated?

Yes

63. Provider’s duty to notify payer regarding adverse events limited?

Yes



No duty regarding patient complaints?

Yes



No duty regarding risk management incidents?

Yes



No duty regarding physician malpractice suits?

Yes



No duty regarding physician status changes?

Yes



No duty regarding medical staff disciplinary actions?

Yes



Notify only when sued by members at time of event?

Yes



Notify only on intent to report adverse event to regulators?

Yes

Source: Miller, Thomas, “Conducting a Managed Care Contract Review,” hfm, January 1998

75

KPIs by Functional Area P4P: Clinical Decision Support/Finance KPI Description 1. P4P Demonstration Project percentile ranking 2. P4P Demonstration Project bonus achievement

Standard ≥ 80% ≥ 1%

3. Length of stay, by DRG

≤ DRG avg

4. Readmission rate, by DRG

≤ DRG avg

5. Adherence to quality indicators, by condition

≥ 80%

6. Adherence to quality indicators, by mode

≥ 80%

7. Overall P4P program ROI

≥ 0%

76

KPIs by Functional Area P4P: Clinical Decision Support/Finance KPI Description

Process

1. Use advanced clinical systems to support patient care?

Yes

2. Use electronic medical record system to support patient care?

Yes

3. Use advanced decision support/performance management system?

Yes

4. Use executive information (scorecard) system?

Yes

5. Use data warehouse to support DSS/EIS capabilities?

Yes

6. Participate in CMS Demonstration Project, if eligible?

Yes

7. Have clinical improvement teams in data-enabled departments?

Yes

8. Target greatest cost/quality improvement areas first?

Yes

9. Use root cause analysis to focus improvement efforts?

Yes

Source: David Hammer, WeiserMazars LLP. Used with permission.

77