LEARNING OBJECTIVES
- Analyze how KPIs can identify and address financial challenges within medical practices.
- Develop effective strategies for implementing and monitoring KPIs in practice management.
- Apply best practices for leveraging KPIs to drive meaningful improvements and efficiency.
Effective revenue cycle management requires coordinated efforts across the entire organization, strategic tracking of key performance indicators (KPIs) and a steadfast commitment to continuous improvement. Brian Hall, vice president of sales strategy at Veradigm, recently discussed practical strategies that can be applied by medical practices to enhance their financial performance.
Hall’s insights carry added weight given the growing challenges facing health care practices. According to a recent Experian Health survey, 73% of providers report that claims denials are increasing — a significant rise from 42% just two years prior. Nearly 40% of respondents reported denial rates of 10% or higher, often due to incomplete documentation, authorization issues, and frequent changes in payer policies.
The financial impact of appealing denied claims is substantial. Providers report spending an average of $43.84 per claim on appeals, amounting to $19.7 billion annually, according to Premier Inc.
SOLUTIONS AND TAKEAWAYS
- Practices should focus on a few high-impact KPIs and gradually add more metrics to enable the establishment of baselines and continuous iteration for improved outcomes.
- Because many issues originate upstream from front office errors and omissions, management is crucial for establishing and monitoring KPIs and ensuring that all departments are aligned and working cohesively toward common goals.
- Denial management offers the most significant opportunity for practice improvement, making it crucial to focus on the top two or three denial reasons for targeted mitigation and quicker revenue generation, alongside promptly posting payments and denials to prevent slowed cash flow.
- Practices should load payer contracts into their system and monitor them regularly to ensure accurate reimbursement, catch underpayments or repeated denials early, and resolve issues proactively.
- To improve revenue cycle efficiency, practices should prioritize optimizing and maintaining their practice management (PM) systems. Many practices underuse these tools, missing out on valuable functions like rule activation, edit building and automation of posting and write-offs.
SUMMARY
“You cannot improve what you cannot measure,” emphasized Hall, quoting management expert Peter Drucker. KPIs, he explained, are essential for setting performance standards and goals, ensuring accountability and providing a clear picture of overall practice health. Beyond individual performance, KPIs help unify departments, foster collaboration and drive continuous improvement by identifying gaps, reducing inefficiencies and strengthening the revenue cycle.
Hall highlighted six KPIs every practice should monitor: days in A/R (average payment time), over 90 A/R % (aging receivables), denial rate (claims denied), clean claims rate (first-time paid claims), net collections rate (reimbursement after adjustments), and gross collections rate (collections versus allowed amount).
He emphasized that revenue cycle management spans the entire organization, not just billing. “Everyone assumes [revenue] cycle is back office,” he said, “but it’s a combination of five key areas.” Hall emphasized that front office staff, providers, coders, billers and management must work collaboratively with a shared understanding of KPIs. Department-wide dashboards that track progress, promote transparency and support accountability are essential tools for alignment.
Regarding front office collections, Hall was direct: “Nobody should be walking out of the practice without paying their copay.” Understanding deductible and coinsurance responsibilities is equally important, as unclear expectations can lead to lost revenue. Hall added that many practices fail to track referral and authorization denials — errors that can delay payments and hurt revenue performance.
Hall explained that providers play a critical role in minimizing charge lag. “If you're a week behind in closing notes, that's a week's worth of revenue sitting there,” he said. Encouraging timely documentation and leveraging electronic health record (EHR) tools can support same-day charge entry, which tightens cash flow and improves predictability.
Hall also recommended tracking missed encounters, monitoring evaluation and management code usage, and comparing Current Procedural Terminology code trends against industry benchmarks from groups like the Medical Group Management Association. Benchmarking not only highlights potential over- or underutilization but also offers insight into how payers view a practice’s coding patterns. “Payers are doing the exact same thing,” he said.
Measuring provider productivity via relative value units (RVUs) is also important — even for practices not reimbursed through RVUs — because it reflects the volume and value of work performed. A decline in RVUs may indicate underlying inefficiencies or coding shifts that need further analysis, said Hall.
With changing payer rules and increasing billing complexity, Hall stressed the need for coding accuracy. In smaller practices, physicians or billers often handle coding, making consistency critical. Hall advised tracking coding-related denials closely and staying current with payer requirements. “Your payers will change things and won’t always tell you,” he cautioned.
To improve outcomes, Hall recommended using denial reporting tools within practice management and EHR systems to target the top two or three denial codes, identify root causes and implement timely fixes. “Denials are the losses,” he said. “We’ve got to figure out how to learn from them and reduce them.”
Billing staff, Hall added, should play an active role in process improvement. Missed timely filing deadlines for denied claims are often avoidable and typically indicate broken workflows. Hall encouraged practices to establish clear policies for managing adjustments, denials, and bad debt to keep accounts receivable clean.
Loading payer contracts into the system and verifying payments regularly — especially from Medicare or Blue Cross — can also pay off. “It takes a little bit of effort, but you will reap the benefit,” he said. “If there’s a 2% or 3% variance you’re not catching, fixing it early is much easier than trying to recover it a year later.”
Monitoring clean claims rates is another high-impact strategy. Hall recommended aiming for a 98% clean claims rate to reduce denials, speed payments and minimize rework.
“When you think rev cycle, all parties need to row in the same direction,” Hall concluded. “Management is responsible for holding everyone accountable, gathering data, setting KPIs and knowing what the practice should look like.” He urged regular KPI measurement and cross-functional meetings to turn issues into opportunities, such as optimizing payer contracts or reducing avoidable denials. “Investigate the root causes, improve the process, and align your team to prevent repeat issues.”
Check out the full video and materials of this session.
