Benchmarking and Reporting
Jackie P. Boswell, MBA, FACMPE
Senior Medical Practice Consultant
What is Benchmarking?
• Benchmarking is a process of measuring key
performance indicators and comparing with
national averages and better performers
• Better performers:
– Benchmark routinely
– Automate processes
Why Benchmark?
Better performing practices use
benchmarking to answer the question:
“How are we doing?”
Typical Physician Questions…
• Are we collecting what we should collect?
– (Why are my collections lower than his/hers???)
• How many employees should we have per
physician (provider)?
– (Do we really need all these people????)
• Are my expenses too high?
– (Where can we cut costs???)
“One accurate measurement is worth a
thousand expert opinions.”
Admiral Grace Hopper
Key Performance Indicators
KPI
% of A/R>120 days
Days gross FFS charges in A/R
Adjusted FFS collection %
Patient accounting support staff/FTE physician
Total medical revenue per FTE physician
%of claims submitted electronically
%of claims denied on first submission
MGMA 2011 Better Performers
Better Performers
10.69%
29.4
100.00%
0.87
$1,242,630.00
95%
4%
Example Practice Data
34.25%
50.3
97.33%
1.09
$1,073,456.00
83%
15%
AR Benchmarks
ACCOUNTS RECEIVABLE BENCHMARKS
PRACTICE
MGMA
% OF AR 0-30 DAYS
% OF AR 31-60 DAYS
% OF AR 61-90 DAYS
% OF AR 91-120 DAYS
% OF AR OVER 120 DAYS
73%
18%
4%
3%
2%
57%
12%
7%
5%
19%
CREDIT BALANCE % OF AR
2%
<5%
DAYS IN AR
53
GROSS COLLECTION RATE
43%
38 Median
54%
Accounts Receivable Indicator
• Percentage of A/R over 120 days
– % of total accounts receivable (amounts owed by
patient and insurance) greater than 120 days old
– These amounts should be detailed on your Aged
Trial Balance Report (Aging Analysis)
Accounts Receivable Benchmark
Percentage of A/R of 120 days old:
Average: 12-18%
Red Flag: >25%
Days in Accounts Receivable (A/R)
The number of days it takes you to collect an
average day’s charges.
(If you average $5,000 a day in charges, how
long will it take you to collect $5,000?)
Days in AR Calculation
Total Accounts Receivable
(Insurance and Patient less Credit Balances and
Collection Agency Accounts)
= ____________________________________
(12 months of gross charges) / 365
Days in AR Benchmark
Also know as…
Days Receivable Outstanding (DRO)
Average: 35-45
Red Flag: >50
Net Collection Rate
Revenue that is “collectible” divided by net charges (allowables).
Example:
Dr. Doe bills BCBS $120 of which $100 is allowed ($20 is the
contractual write-off).
If you collect $98 of the $100 allowed amount from the
insurance company and patient, you have a 98% Net
Collection Rate for that claim.
Net Collection Rate
Average: 94-97%
Red Flag: < 90%
Gross Collections Calculation
Total Collections
= __________________ %
Gross Charges
Gross Collections Calculation
Cash Collected in 2014: $100,000
Gross Charges in 2014: $180,000
Gross Collection Rate = 55%
Gross Collection Rate
What is the right answer?
• If > 70% ...... Fee schedule too low?
• If < 40% ...... Fee schedule too high?
Physician Productivity
• Common Measurements
– Patient encounters (# and types of encounters),
– Work Related RVUs
– Charges and Collections
– Adjustments (may include statistics on the amount
of courtesy and other write offs)
– Level of Service statistics on E&M coding
– Payer Mix
Physician Productivity:
Encounters
Office Visits
Hospital Visits
Total Visits
Dr. A
4160
89
4249
Dr. B
1984
66
2050
Dr. C
4646
174
4820
MGMA Median*
2949
51
3000
Physician Productivity:
Charges/Receipts
Dr. A
Dr. B
Dr. C
Dr. D
Dr. E
Total
Charges
$928,512
$929,953
$923,277
$779,802
$912,254
$4,473,797.25
5/1/12-4/30/13
Benchmark
Receipts
Benchmark
$450,314
$458,337 MGMA Median
MGMA Median
$443,855
$840,497
$448,235
$373,845
PSR
PSR
$467,678
$763,556$411,035$2,194,028.51
$1,002,167
$539,483
Payer Mix
New and Established E&M –
Dr. Doe
100.00%
80.00%
60.00%
Practice
National
40.00%
`
20.00%
434 visits
0.00%
99201
99202
99203
99204
99205
100.00%
80.00%
60.00%
Practice
National
40.00%
`
2755 visits
20.00%
0.00%
99211
99212
99213
99214
99215
Inpatient and Subsequent Hospital –
Dr. Doe
100.00%
80.00%
60.00%
Practice
National
40.00%
`
20.00%
74 visits
0.00%
99221
99222
99223
100.00%
80.00%
60.00%
Practice
National
40.00%
`
20.00%
285 visits
0.00%
99231
99232
99233
Hospital Discharge –
Dr. Doe
100.00%
80.00%
60.00%
Practice
40.00%
National
`
20.00%
58 visits
0.00%
99238
99239
Revenue and Expense Benchmarks
INCOME
2010
Prof Fees - Office
$
Prof Fees - Hospital
$
Prof Fees - Immun
$
Prof Fees - Immun Admin
$
Prof Fees - Other
$
Pt Refund
$
Net Collections $
2011 Annualized*
$
$
1,111,905 $
285,813 $
654,490 $
(7,056) $
2,651,247
119,707
1,106,432
511,697
624,904
(17,762)
$
4,996,225
2,338,670
107,307
4,491,130
2010
2011
MGMA
100.00% 100.00% 100.00%
EXPENSES
Payroll- Staff
989,351
952,354
Insurance: Health/Life Emp
99,882
62,260
Pension/ 401K/ Employee
25,412
24,963
Taxes: Payroll Employee
84,665
88,079
1,199,310
1,127,655
211,103
217,518
Total Staff Cost $
Rent
Utilities
26.70%
22.57%
27.16%
32,141
35,174
Total Facility Cost $
243,245
252,693
5.42%
5.06%
7.58%
Immunizations $
856,768
915,907
19.08%
18.33%
15.59%
Total "Other Operating" Expenses $
960,101
979,302
21.38%
19.60%
15.53%
GP's TOTAL Expense $
3,259,423
3,275,557
72.57%
65.56%
65.86%
1,231,707
1,720,668
27.43%
34.44%
34.14%
Income for Distribution
$
*Annualized based on Jan-Aug 2011
“Income for Distribution” Allocation
Physician Expenses
Members' 401(k) match
members' disability insurance
Members' guaranteed payment
Members' health insurance
Members' HSA
Members' 401(k)
Members' 401(k) prior year
Members' estimated tax payment
PLLC bonus
Dues and subscriptions
Insurance- NP/PA
Extender wages
Dues and subscriptions
Wages- extenders
Physician other
Total
29,218
4,392
455,150
24,169
12,712
67,939
4,882
183,928
66,194
12,969
4,666
17,311
3,414
129,254
764
1,016,961
Dispensary
Other Income
Dispensary Income
Other Expense
Dispensary- wages
Dispensary- pharmaceuticals
Dispensary- fees
Dispensary- other
Dispensary- staff expense
41,189
230,522
18,584
448
92
Profit/Loss
(76,521)
214,313
Comparative Report
Comparative Report
Current
Month
Patient Encounters
Charges
Adjustments
Collections
Gross Collection Ratio
Accounts Receivable
1,488
$202,353
$91,588
$134,808
66.6%
287,258
Salaries
Overtime Expense
Contract labor
Staff Payroll Taxes
Staff Benefits:
Health Insurance (Employer cost)
Other Insurance ( Employer cost)
Other Benefits ( uniforms)
Total Staff Cost
% of Collections
Rent
Utilities
Housekeeping
Bldg Maintenance
Real Estate Taxes
Build-out Expenses
Landscape Maint.
Alarm System
Pest Control
Total Facility Expense
% of Collections
Equipment Expense
Medical Supplies
X-ray Supplies, Equipment
laboratory Expense
Office Supplies
Billing/Administrative Expense
Professional Fees
Telephone
Marketing
Prof liability Ins
Travel, Meals, CME
Dues, Books, Subscriptions
Misc Expenses
Total "Other" Expenses
% of Collections
Total Operating Expenses
% of Collections
$37,814
$1,502
$600
$3,047
$4,933
$186
$0
$48,082
35.7%
$12,025
$437
$725
$0
$0
$0
$100
$50
$0
$13,337
9.9%
$5,578
$7,111
$0
$589
$2,966
$2,684
$0
$1,281
$354
$0
$714
$0
$1,042
$22,319
16.6%
$83,738
62.1%
Total Physician Expense
% of Collections
$54,700
40.6%
Profit/Loss
($3,630)
Y-T-D
Current Y- T- D
Budget
Revenue
9,070
$1,231,379
$403,765
$827,614
67.2%
Expenses
$195,992
$2,947
$4,100
$15,418
$74,289
$930
$626
$294,302
35.6%
$60,125
$2,049
$3,625
$0
$1,244
$0
$500
$250
$50
$67,843
8.2%
$26,209
$37,044
$0
$3,056
$17,786
$14,145
$7,546
$6,257
$2,531
$16,325
$1,850
$1,012
$8,100
$141,861
17.1%
$504,006
60.9%
Physician Expense
$393,300
47.5%
($69,692)
Same
Month
Prior
Year
1,740
$236,677
$91,591
$165,497
69.9%
$ 290,890
Y-T-D Prior Year
9,423
$1,285,267
$427,591
$859,774
66.9%
Y-T-D Variance
-353
($53,888)
($23,826)
($32,160)
$36,130
$1,750
$750
$2,936
$191,676
$4,443
$4,750
$15,199
$4,316
($1,496)
($650)
$219
$4,854
$179
$0
$46,599
28.2%
$11,875
$657
$725
$0
$0
$0
$100
$50
$0
$13,407
8.1%
$5,539
$7,844
$0
$662
$3,310
$2,813
$388
$1,103
$3,512
$0
$931
$68
$2,091
$28,261
17.1%
$88,267
53.3%
$25,830
$895
$350
$243,143
28.3%
$59,375
$1,703
$3,625
$0
$1,244
$0
$500
$250
$50
$66,747
7.8%
$25,800
$40,740
$0
$3,439
$17,195
$14,616
$8,534
$5,569
$3,878
$14,988
$2,202
$1,541
$8,866
$147,369
17.1%
$457,259
53.2%
$750
$346
$0
$0
$0
$0
$0
$0
$0
$1,096
-0.4%
$409
($3,696)
$0
($383)
$591
($471)
($988)
$688
($1,347)
$1,337
($352)
($529)
($766)
($5,508)
0.0%
4674681.6%
7.7%
$54,700
33.1%
$413,500
48.1%
($20,200)
-0.6%
$22,530
($10,985)
($58,707)
$48,459
$35
$276
$51,159
The Dashboard Report
Dashboard Report
Y-T-D
Current Month Average
1488
1814
$
202,353 $ 246,276
$91,588
$80,753
$
134,808 $ 165,523
66.6%
67.2%
$
287,258
$
(63,212)
43.18
35.48
Patient Encounters
Charges
Adjustments
Collections
Gross Collection Ratio
Accounts Receivable
Credit Balances
Average Days in A/R
Cash on Hand
Beginning Bank Account Balance
Current Month Deposits
Current Month Checks Written
Ending Balance
Doctor
Doctor
Doctor
Doctor
Bush Jr
Clinton
Bush Sr
Regan
Total
$15,477
$134,808
$138,438
$11,847
Charges
$53,483
$57,097
$48,952
$41,821
$201,353
Days in
Collections Encounters Office
$29,581
412
21
$32,853
437
21
$35,229
364
20
$37,145
275
11
$134,808
1488
73
What Reports Do I Need?
Basic
Reports
Report
Sort By
Description
Accounts Receivable Summary
(Aged Trial Balance)
Insurance Company,
Balances > $0.00
Report should show balances greater than $0.00 by insurance responsibility. This
report should age all balances into 0-30, 31-60, 61-90, and over 120 day categories
Patient Responsibility,
Balances > $0.00
Report should show balances greater than $0.00 by patient responsibility. This report
should age all balances into 0-30, 31-60, 61-90, and over 120 day categories
Credit Balance Report
Patient Account
(Not Invoice)
Report should detail each patient account with a balance less than $0.00. (Credit may
be due the patient, insurance company, or neither (account may have been over
adjusted))
Unapplied Credits Report
Office
Report shows the payments that have been input in to the system but have not been
applied to a date of service
Service Analysis Report
Year-End and Year-ToDate by CPT by
Provider
Report should detail the frequency of each CPT code by Provider. It should include
total charges for each code (frequency multiplied by the charge)
Year-to-Date Activity Report
Individual Month
(by Provider)
Report should summarize charges, payments and adjustments for the fiscal year or,
preferably for each of the last 12 months, by Provider if there is more than one M.D.
Payer Mix
Year-to-Date and
Previous Year by
Insurance Company
Report should show charges, payments, adjustments by insurance company for a
specific time period
List of Employees
Practice
Listing of all Employees, with Job Titles, Hrs worked per week, and Hourly Rate/Salary
Balance Sheet
Practice
Prior Year and Current Year-to-Date
Profit / Loss Statement
Practice/Provider
Prior Year and Current Year-to-Date
Finally…
• Transparency in a medical practice should be
expected.
• Understand your financial reports and
financial status.
• Ideally, your personal accountant should be
different than the practice’s accountant.
• SVMIC is available to assist our policyholders!
Remember!
Just because a practice CAN
report it
….doesn’t mean a practice
SHOULD.
Questions?