Outsourcing: Track the right metrics

Q. What metrics should I track for success in my business
Monday, April 29, 2019

A. When did you last check your HME company’s metrics?

This task might be last on your list (and with good reason): the day-to-day challenges of patient care and billing processes probably occupy your mind. You might focus on whatever it takes to keep the lights on.

Tracking too many or too few metrics (or none at all) is more common among HME providers than you might think. Making the space to track the right HME metrics is easier than you might think, too.

Key Performance Indicators (KPIs)
Enter key performance indicators (KPIs). KPIs allow you to track what is relevant to your goals and apply them to the decisions you make for your business.

Below are a few of the KPIs that are crucial to your HME success.

Days Sales Outstanding (DSO)
DSO indicates how well your A/R balances are being managed. It is the average amount of time between your date of service and date of payment.

90+ A/R Percentage (90+ A/R)
90+ A/R represents the portion of A/R aged beyond 90 days from the invoice date. Most A/R should be collected before the first 90 days, so this metric indicates “trouble” A/R.

Payment Rate
Payment rate is the percentage of allowable billing that you collect on average each month. If your payment rate is at 80%, then you collect, on average, $0.80 on every $1.00 in allowable billing.

Write-off Rate
Write-off rate is the percentage of allowable billing adjusted off your A/R each month as bad debt. Bad debt is A/R that should have been billed and should have been paid, but will never be paid.

Joey Graham is the executive vice president and general manager at Prochant, Inc. He can be reached by email at joeyg@prochant.com and by phone at (980) 201-3082.