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Full and accurate reimbursement from patients and payers is essential to the health of your urgent care. Like a health problem that goes untreated, financial issues when ignored can turn into an emergency. To ensure your reimbursement processes are contributing to your financial success, you need to look at various aspects of your clinic data—not just the overarching numbers. Stay on top of your financial health with by paying attention to these five super-important KPIs.

1. Average Revenue Per Encounter

Every encounter matters in urgent care. The breakeven point for an urgent care clinic is approximately 25 visits per day.* The average reimbursement per encounter is one of the clearest overall indicators of a clinic’s financial health. This number is the total reimbursement received for visits paid in full divided by the total number of visits paid in full. Experity data reported in this issue of Urgent Care Quarterly indicates that the average reimbursement year-over-year from 2013-2016 was $123 per visit.

Why it matters: If your average revenue per encounter seems low, this might be a sign of payer contracts, patient mix, or inaccurate coding—potentially because of incomplete documentation.

2. E/M Code Distribution

E/M (evaluation and management) codes show the complexity of your visits. These codes determine your level of reimbursement (see point #1)—based on the services provided. Clinical staff needs to fully document the content and complexity of the visit in order to capture the correct E/M code.

Urgent care reimbursement is lower when documentation is lacking; and vice versa. Unethically overcharging occurs if visits are deliberately “upcoded”.  Audits by payers check levels of codes used at urgent cares to ensure accuracy and compliance.

Why it matters: The distribution of E/M codes can be a clear indicator of accurate documentation. For example, a large percentage of level two visits may reveal lack of documentation, while too many level four or five visits may indicate E/M upcoding.

3. Days to Bill and Days in AR

Clearly, the faster claims are paid, the better. The number of days to bill a claim, and therefore the number of days in AR, can constrict your cash flow—and are direct indicators of issues with your billing, payers, or staff. How a patient chart is coded and billed—based on documentation—can lead to unnecessary delays in reimbursement.

For example, if providers forget to complete charts, visits take longer to code and longer to bill. The general timeframe to bill a clean claim is one to three business days. Keep your eye on frequent reports that indicate how many claims didn’t pass initial scrubbing, and address the causes promptly. The largest portion of claims in AR are paid within 12 to 60 days. To figure your days in AR take your total AR divided by your average daily charges.

Why it matters: More than three days to bill a claim can be a sign of inconsistent clinic procedures. Providers not locking charts, incomplete documentation, or not collecting insurance information are common procedural gaps. AR delays can be a sign that billers aren’t submitting claims quickly enough—or that payers are delaying payment for inaccurate claim submission.

4. Days to Pay

Every payer has a different reimbursement schedule for paying claims. Days to pay will vary based on your contracts; Medicare and Medicaid have a set standard of days to pay, while payments from private payers are less consistent. Days to pay claims is the average number of days for a payer to make a payment.

Many practice management systems help scrub claims for accuracy. Clearinghouses double check the claims—and help with resubmission if claims are rejected. Dig deeper find common threads running through rejected claims, such as provider, biller, or type of visit.

Why it matters: Consistently rejected claims should be a red flag for urgent care clinics because they show either a lack of accuracy while coding or processing, or a misunderstanding of the clinic’s payer contracts.

5. First-Pass Resolution Rates

Simple enough, first-pass resolution rate is the percentage of claims that are paid without resubmission. This number is calculated as total number of claims paid (by payers or transferred to patient responsibility) divided by total number of claims submitted. First-pass rates can vary dependent on payer, but can be a clear indicator of coding and documentation accuracy.

Rejected claims not only cost time and money for biller resubmission, they also affect your cash flow and cost you money by delaying payments. When it comes to claim submission, “get it right the first time” should be your mantra.

Why it matters: A high first-pass resolution rate means claims are being documented, coded, and billed correctly the first time.

Monitoring these KPIs can help you maintain the financial health of your urgent care—but these are just a few of the many data points that can contribute to your success. Make it a point to look at clinic data regularly and use a real-time dashboard to keep up with metrics that matter. Data is only valuable if you view it on a consistent basis, correctly interpret the meaning behind the numbers, and take the necessary action to correct any issues and get your revenue on track.

*Urgent Care Benchmarking Study (2012). Urgent Care Association of America.

This resource was first published prior to the 2019 merger between DocuTAP and Practice Velocity. The content reflects our legacy brands.

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