It can be difficult pinpointing the right indicators to look for when determining the health of your reimbursement. Like a health problem that goes ignored because of a lack of understanding of the symptoms, so too can financial problems get out of control if you aren’t consistently monitoring KPIs—along with your staff and billers.

You need to look at various aspects of your clinic data, not just overarching numbers, to truly understand how your urgent care is doing. Here are a few of the top indicators we’ve found to be keys to financial health in urgent care.

1. Average Revenue Per Encounter

Each encounter matters in urgent care. The break-even point for an urgent care clinic is approximately 25 visits per day.* Thus, the average revenue per encounter number is one of the clearest overall indicators for reimbursement health. This number is the total cash received for visits paid in full divided by the total number of visits paid in full. According to the UCAOA, the average reimbursement per visit in 2010 was $114.67.* 

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 directly translate into the reimbursement level you will receive (see point #1)—dependent on the services provided. Clinical staff need to fully document the content and complexity of the visit in order to capture the correct E/M code.

Urgent cares will lower their reimbursement if documentation is lacking; and vice versa, unethically overcharging occurs if visits are deliberately “up coded”.  Audits by payers check levels of codes used at urgent cares to ensure accuracy.

Why it matters: The distribution of E/M codes can be a clear indicator of correct documentation. For example, a large percentage of level 2 visits may reveal lack of documentation, while too many level 4 or 5 visits may indicate up coding of E/M.

3. Days to Bill & Days in AR

Clearly, the faster claims are paid, the better. The number of days to bill the claim, and therefore the number of days in AR, can severely affect 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 are forgetting to complete charts, they can take longer to code and therefore longer to bill. The general timeframe to bill a clean claim is 1-3 business days. To keep within this timeframe, closely monitor your report that shows claims didn’t pass inital scrubbing. 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 3 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 the contracts you have; Medicare and Medicaid have a set standard of days, while private payers can have more variation. Days to pay claims is the average number of days for a payer to make a payment.

Many practice management systems help scrub for accuracy. Clearinghouses double check the “cleanness” of claims—and also help with resubmission if claims are rejected. Dig deeper with rejected claims to see if it happens with a consistent provider, biller, or type of visit.

Why it matters: Consistently rejected claims show either a lack of data accuracy 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 “cleanness”.

Rejected claims not only cost time and money for biller resubmission, they also cost you money by delaying payments. The mantra of “get it right the first time” holds true for claim submission.

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

The points above aren’t even close to a complete list of indicators you should monitor, but it’s a starting point. To maintain the financial health of your urgent care, you need to educate yourself on key areas to follow and have a set plan for reviewing numbers. Data is only valuable if you view it on a consistent basis—and correctly interpret the meaning behind the numbers. Only then can you take the necessary action to get your revenue on track.

What financial indicators have you found to be key in your urgent care?

*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.