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As every business owner knows, key performance indicators measure the success and solvency of an organization. The same holds true for an urgent care business as well. As a business, your urgent care also relies on KPIs as a baseline of financial and operational well-being.
Similar to a patient exam, KPIs are the vital signs of your clinic, and tell the story of your clinic’s health. Poor KPIs serve as warning signs of business issues that need to be addressed. With this data, owners are empowered to make wiser decisions regarding staffing, services offered, and process improvements.
Here are some of the most important KPIs to watch in your urgent care.
1. Average Revenue Per Visit
What it is and why it’s important: The average revenue per visit is the total amount received per visit from both the patient and the payer. Average revenue shows actual payments received per visit. It also helps determine projected cash amounts.
What can affect it: This number can be difficult to calculate accurately because it needs to be averaged over a set period of time, usually six months to one year (rolling average). Incomplete visits in A/R should be removed from this metric, along with bad debt write-offs.
Occupational medicine and workers’ compensation visits should be segmented and averaged on their own, so as to not skew the average revenue per visit for general urgent care visits. Variety of payer types, and contracted rates, affect this number.
How to calculate it: Total payments collected – total reversals / Total visits
(Recommended to calculate this over a set period of time)
2. E/M Code Distribution
What it is and why it’s important: E/M code distribution shows the use of code levels by staff. E/M code selection directly affects reimbursement amounts based on chosen code level. Code levels of 1 through 5 tell payers the level of visit complexity, and accordingly charges rendered.
What can affect it: Documentation supports E/M code selection, so it’s essential for providers to enter all correct information for the appropriate code selection. Up-coding and under-coding can explain unnatural variations in E/M codes—leading to wider clinic revenue fluctuations. Chart audits (on a per provider basis) can pin-point coding and documentation performance needs.
The percentage of new versus established patient visits should be evaluated when reviewing E/M code distribution, as reimbursement per visit varies per patient type. Established patients traditionally have a higher code level, due to past documentation records.
How to calculate it: Each E/M code level / Total visits with an E/M code
(Recommended to separate new and established visit types to create two E/M code distribution charts. A weighted average of E/M code level can help you determine if your levels are trending certain direction over time for new and established visits.)
3. Ancillary Revenue Per Visit
What it is and why it’s important: Ancillary revenue per visit is how much revenue you receive per visit for procedures and services. Urgent cares often have a contracted amount for an office visit E/M code with payers—so ancillaries are in addition to that amount. Ancillary charges can be labs, injections, x-rays, or medical equipment.
What can affect it: Not properly documenting procedures causes an industry average loss of $25 per visit. Providers can forget to include procedure documentation and codes when tied to an ancillary service (such as a rapid strep test + the charge for processing the lab result). Only visits with an E/M code should be considered, as these visits have procedures tied to the visit type.
How to calculate it: Total collections of CPT code range / Total visits with CPT code
4. Front Desk Collection Rate
What it is and why it’s important: Front desk collection rate is the percentage of collections gathered by the front desk from the patient before they leave the clinic. The larger the percentage captured at the front desk is typically reflected in a higher percentage of overall collections per visit.
What can affect it: Front desk procedures and personnel impact this metric. Enforcing the correct collection of co-pays at patient intake ensures higher percentage of patient payments in full. Traditionally in urgent care, the policy is to gather as much at time of service as possible, since the patient is not as likely to be a repeat customer—or may not be insured.
Having real-time insurance verification in your software helps staff collect the correct amount. If patient is cash-pay, personnel should gather 100% at time of service.
How to calculate it: Front desk collection dollar amount / Total visits
5. Days in Accounts Receivable (A/R)
What it is and why it’s important: Days in A/R is the amount of time your charges are sitting in accounts receivable. This is the revenue you have yet to get paid for, divided by the average daily charges at your clinic. The lower your days in A/R, the quicker the turnaround with realized revenue.
What can affect it: Payers and patient responsibility both impact this number. The cleanness of your claims during submission means a faster accepted claim and reimbursement. Fluctuations in days in A/R means payer or claim issues are likely.
The goal for days in A/R is to keep day distribution steady and not to let more A/R slide to higher aging. Days to bill (how long it takes to get your bills out) and days to pay (how long it takes a payer to pay) also affect this metric. Typical days in A/R for urgent care range from 20 to 40+ days.
How to calculate it: Total outstanding A/R / Average daily charges*
*Average daily charges = total gross charges / Total Visits
(Recommend using last 90 to 120 days of charges as an average to remove seasonal fluctuations. Also review total days in A/R versus insurance-only days in A/R.)
Stay tuned for part two of this article series! We'll share the remaining five KPIs you should watch for in your urgent care next month. What KPIs do you watch closely in your urgent care as a sign of financial health? Share with us.