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Benchmarking your pediatric practice

Kids First Pediatric AlliancePractice Administrators Meeting

Presented by:Lori A. Foley, CMA, CMM, PHRGates, Moore & Companylfoley@gatesmoore.com404.266.9876

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Learning objectives

Define benchmarking and understand its importance

Identify benchmarking resources Identify and explore key areas of benchmark

comparison

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Methods and procedures used to compare yourself (practice) with others

- practices- administrators- physicians

What is benchmarking?

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If you don’t know what the standard is…you cannot compare yourself against it.

And if you don’t know where you stand…..

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Why is benchmarking important?

o Self assessmento Identify areas for improvemento Identify areas of success

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What should you benchmark against?

Self Close Peers – Kids First survey Distant Peers – MGMA National

survey1

1 MGMA Cost Survey for Single Specialty Practices: 2005 Report based on 2004 Data

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Benchmarking terms

Mean = average Median = middle Percentiles

– 25th

– 50th (middle)– 75th

– 90th

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Key benchmarking areas

Staffing/FTEs Billing Efficiency Provider Productivity Overhead Expenses

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Staffing – Kids First Survey

Category Average Min Max

Staff per Provider 3.26 1.76 7.09

RN per Provider 0.63 0.07 1.37

LPN per Provider 0.33 0.00 0.62

MA per Provider 0.86 0.23 2.91

Clinical per Provider 1.50 0.62 3.95

Lab per Provider 0.15 0.07 0.20

Clerical per Provider 0.79 0.21 1.65

Administrative per Provider 0.79 0.19 1.69

Management per Provider 0.28 0.06 0.88

Office Staff per Provider 1.71 0.79 3.14

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Staffing – MGMA Survey

Category Mean

Staff per Provider 3.57

RN per Provider 0.47

LPN per Provider 0.48

MA per Provider 0.78

Clinical per Provider 1.42

Lab per Provider 0.28

Business staff per Provider 0.86

Front office per Provider 1.22

Administrative per Provider 0.23

Non-clinical per Provider 2.08

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Staffing – How do you compare? If under,

- Look at patient flow, wait times, overtime, backlog of work.

- Are providers slowed because of lack of available staff, rooms empty too long, etc?

- Evaluate the “low staff equals low overhead” equation. Overhead can also be lowered by increasing efficiency -> production -> collections!

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Staffing – How do you compare? If over,

-Evaluate who is doing what. Is everyone busy, or just looking that way?

- Is the practice performing higher than the median in terms of productivity (office visits, collections)?

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Staffing – How do you compare? If comparable,

Don’t rest on your laurels….

evaluate continually!

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Billing Efficiency

Accounts Receivable Aging Days in A/R Gross Collection Rate Adjusted Collection Rate

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A/R Aging – Kids First Survey

Age Average Min Max

0-30 days 64% 25% 85%

31-60 days 13% 5% 21%

61-90 days 6% 3% 15%

91-120 days 4% 2% 10%

120+ days 13% 0% 43%

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A/R Aging – MGMA Survey

Age Mean

0-30 days 59.72%

31-60 days 14.36%

61-90 days 7.17%

91-120 days 3.91%

120+ days 14.91%

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Days in A/R – Kids First Survey

Average Min Max

25.5 14.98 55.93

Calculation: Total A/R

x 30

Average monthly charges

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Days in A/R – MGMA Survey

Mean

36.89

Calculation: Total A/R

Charges x (1/365)

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If unfavorable comparison…

Does your practice write off uncollectible accounts or accounts transferred to collections?

Review aging by insurance class to see if there is a carrier problem

Review insurance aging versus patient aging to identify best collection approach

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If unfavorable comparison…

Review detailed A/R report by patient to see how well staff is collecting copayments

Review claims transmission reports Are there any clearinghouse issues?

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If favorable comparison…

Don’t rest on your laurels!

Additional considerations:

Claims pending report versus A/R aging report

Effect of credit balances

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Gross Collection Rate

What percentage is the practice collecting of what it charges?

FFS Collections

FFS Charges = %

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Adjusted Collection Rate

What percentage is the practice collecting of what it is allowed to collect?

FFS Collections

FFS Adjusted Charges* = %

*charges minus mandated adjustments

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Example:

Office visit = $100 BC/BS Allowable = $85 Collected $80

Gross Collection Rate =

$80

or 80%

$100

Adjusted Collection Rate =

$80

or 94%

$100 - $15

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Gross Collection Percent

Kids First Survey

Average 70.4%

Minimum48.5%

Maximum 97.3%

MGMA Survey

Mean 71.52%Excludes capitation

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GCR comparisons…

Unfavorable comparison is not necessarily bad!

How do you compare against your previous periods? Consider effects of

- fee schedule increases- changes to carrier fee schedule

Remember – it is directly based on how your fees are set compared to the reimbursement of your specific payers!

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Adjusted Collection Percent

MGMA Survey

Mean 99.67%Excludes capitation

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ACR Comparisons

- Can occasionally exceed 100% due to timing but is not sustainable

- Target is in excess of 95%- Some PM systems will track all collections

related to a particular date of service- Requires detailed adjustment codes and

appropriate use of same

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Provider Productivity

- Average visits per provider- Revenue per visit- Charges per visit- Charges per provider

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Provider Productivity

- Average visits per provider- Charges per visit- Charges per provider

All signs of provider productivity and primarily in the provider’s control.

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Provider Productivity

- Revenue per visit

Another sign of productivity but heavily influenced by billing & collections processes.

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Provider Productivity

Questions to ask:

- Is the physician working as hard as he or she wants?

- Is the physician happy with his or her compensation?

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Provider Productivity

Questions to ask:

- Are all charges being captured for services provided?

- immunizations

- lab tests

- hearing/vision screens

- sibling visits

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Overhead Percentage

How much of each dollar is being spent on opening the doors each day?

Includes operating costs except provider specific expenses (compensation, benefits)

Malpractice is included as an operating cost.

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Overhead Percentage

Influenced by

Costs

AND

Collections

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Overhead Percent

Kids First Survey

Average 65.8%

Minimum35.0%

Maximum 84.5%

MGMA Survey

Mean 56.67%

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Overhead Percent

Largest line items– Staffing– Facility/Rent– Drug supply (vaccines)

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Overhead Percent

Know your costs Price shop on an annual basis Monitor inventory – don’t keep too much on

hand Be diligent in collection efforts!

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Questions & Answers

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Thank you!

GATES, MOORE & COMPANY

Tower Place 100, Suite 600

3340 Peachtree Road, N.E.

Atlanta, Georgia 30326

(404) 266-9876

lfoley@gatesmoore.com www.gatesmoore.com