1 Benchmarking your pediatric practice Kids First Pediatric Alliance Practice Administrators Meeting Presented by: Lori A. Foley, CMA, CMM, PHR Gates, Moore & Company

2 Learning objectives Define benchmarking and understand its importance Identify benchmarking resources Identify and explore key areas of benchmark comparison

3 Methods and procedures used to compare yourself (practice) with others - practices - administrators - physicians What is benchmarking?

4 If you don’t know what the standard is…you cannot compare yourself against it. And if you don’t know where you stand…..

5 Why is benchmarking important? o Self assessment o Identify areas for improvement o Identify areas of success

6 What should you benchmark against? Self Close Peers – Kids First survey Distant Peers – MGMA National survey 1 1 MGMA Cost Survey for Single Specialty Practices: 2005 Report based on 2004 Data

7 Benchmarking terms Mean = average Median = middle Percentiles – 25 th – 50 th (middle) – 75 th – 90 th

8 Key benchmarking areas Staffing/FTEs Billing Efficiency Provider Productivity Overhead Expenses

9 Staffing – Kids First Survey CategoryAverageMinMax Staff per Provider RN per Provider LPN per Provider MA per Provider Clinical per Provider Lab per Provider Clerical per Provider Administrative per Provider Management per Provider Office Staff per Provider

10 Staffing – MGMA Survey CategoryMean Staff per Provider3.57 RN per Provider0.47 LPN per Provider0.48 MA per Provider0.78 Clinical per Provider1.42 Lab per Provider0.28 Business staff per Provider0.86 Front office per Provider1.22 Administrative per Provider0.23 Non-clinical per Provider2.08

11 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!

12 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)?

13 Staffing – How do you compare? If comparable, Don’t rest on your laurels…. evaluate continually!

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

15 A/R Aging – Kids First Survey AgeAverageMinMax 0-30 days64%25%85% days13%5%21% days6%3%15% days4%2%10% 120+ days13%0%43%

16 A/R Aging – MGMA Survey AgeMean 0-30 days59.72% days14.36% days7.17% days3.91% 120+ days14.91%

17 Days in A/R – Kids First Survey AverageMinMax Calculation: Total A/R x 30 Average monthly charges

18 Days in A/R – MGMA Survey Mean Calculation: Total A/R Charges x (1/365)

19 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

20 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?

21 If favorable comparison… Don’t rest on your laurels! Additional considerations: Claims pending report versus A/R aging report Effect of credit balances

22 Gross Collection Rate What percentage is the practice collecting of what it charges? FFS Collections FFS Charges = %

23 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

24 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

25 Gross Collection Percent Kids First Survey Average 70.4% Minimum48.5% Maximum97.3% MGMA Survey Mean71.52% Excludes capitation

26 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!

27 Adjusted Collection Percent MGMA Survey Mean99.67% Excludes capitation

28 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

29 Provider Productivity - Average visits per provider - Revenue per visit - Charges per visit - Charges per provider

30 Provider Productivity - Average visits per provider - Charges per visit - Charges per provider All signs of provider productivity and primarily in the provider’s control.

31 Provider Productivity - Revenue per visit Another sign of productivity but heavily influenced by billing & collections processes.

32 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?

33 Provider Productivity Questions to ask: - Are all charges being captured for services provided? - immunizations - lab tests - hearing/vision screens - sibling visits

34 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.

35 Overhead Percentage Influenced by Costs AND Collections

36 Overhead Percent Kids First Survey Average 65.8% Minimum35.0% Maximum84.5% MGMA Survey Mean56.67%

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

38 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!

39 Questions & Answers

40 Thank you! GATES, MOORE & COMPANY Tower Place 100, Suite Peachtree Road, N.E. Atlanta, Georgia (404)