Stay ahead on KPIs with expert Home Health Billing Services

Home health providers specialize in providing treatments to patients at home. This includes procedures, medical equipment, infusions, and medications. To measure their financial performance, home health providers must monitor certain key performance indicators (KPIs). Billing errors can create several issues in the reimbursement process. These include claim denials, delayed payments, and increased number of AR days. Professional home health billing services assist providers in monitoring KPIs and maximizing revenue through efficient in-home healthcare reimbursement. 

Key home health billing KPIs providers must follow 

Common home health services that are billed include skilled nursing visits, medical social services, speech therapy, chronic care management, and other services. To ensure providers receive full payment for the services they render, they must monitor certain key metrics. These include the following KPIs: 

1. Clean claim submission rate – It refers to the percentage of claims that are approved and paid on the first submission without any rejection or denial. If claims are denied due to billing errors, this indicates a major issue in the home health claim submission process. A successful home health practice should aim for a claim submission rate above 90%. However, the exact benchmark may vary by organization and payer. The clean claim rate is calculated as:  

(Number of accepted claims ÷ total number of claims) x 100 If 900 claims are accepted out of 1000, the clean claim rate is 90%.  

Home health claims often get denied due to the following reasons:  

• Incomplete physician visit documentation or missing prior authorization 

• OASIS coding errors  

• Incorrect physician notes 

• Failure to verify patient eligibility 

Billing errors result in claim denials, which reduce the clean claim submission rate. Home health providers should aim to maintain high clean claim rates. 

2. Days in accounts receivable (AR) - In home health billing, accounts receivable is the money owed to the home health agency for providing medical services. However, the provider has not yet received this money, so it is considered outstanding. This KPI measures the average number of days from claim submission to receipt of reimbursement. Home health practitioners can get a clear picture of cash flow by evaluating the number of AR days. For example, a home health agency provides skilled nursing services worth $5000. After submitting insurance claims, the provider is paid $3,000. The outstanding amount of $2,000 is considered accounts receivable. Experienced home health billing services track each outstanding claim and determine whether it is pending, denied, underpaid, or awaiting additional information. The following are the parameters on which AR days are evaluated:  

0-30 days – Recently billed 

31-60 days – Follow-up may be required 

61-90 days – Increasing collection risk 

91-120 days – Requires active follow-up 

120+ days – High-risk or aged AR  

3. Claim denial rate – It measures the percentage of home health claims denied by the payer. The numerical representation is as follows:  

(Denied Claims ÷ Total Claims Submitted) × 100 

A high claim denial rate can result from missing or incorrect documentation, authorization issues, incorrect patient eligibility information, medical necessity issues, etc. If a claim is denied due to medical necessity issues, it may be because the OASIS assessment does not adequately support the documented clinical need. The claim denial benchmark is usually considered to be 5%–12%. High-performing home health services aim for a denial rate below 5%. However, providers should consider the denied amount in addition to the number of denied claims. For example, 50 denied claims worth $10,000 may have a smaller financial impact than 10 denied claims worth $80,000. 

Why are KPIs important in home health billing? 

Providers must continue treating patients while ensuring they receive timely payment for their services. To remain financially sustainable in the healthcare industry, they need to measure their operational and financial performance. KPIs turn home health billing from a reactive process into a measurable, proactive revenue-cycle operation. The benefits of KPIs in home health billing are: 

1. Improved cash flow – KPIs such as number of AR days and clean claim submission rates help identify delays that prevent timely payment. When providers are reimbursed on time, they can maintain healthy cash flow. 

2. Reduced claim denials – Professional home health billing services track denial rates and denial reasons. This helps billing teams identify recurring issues and address them, further reducing the claim denial rate in home health services. 

3. Increased reimbursement rates – Home health reimbursement rates are inversely proportional to claim denial rates. Expert home health billing services reduce claim denial rates, which can result in higher reimbursement. Providers are paid on time, enabling them to continue providing treatment to patients.  

The role of outsourcing in home health billing 

Home health billing differs from billing in other healthcare specialties because it is episode-based and relies heavily on documentation. Relying on in-house billing teams to manage the reimbursement complexities can be challenging for providers. Outsourcing the task to third-party companies supports financial growth and streamlines the overall home health revenue cycle management. Some of the outsourced home health billing services offer several benefits such as real-time services across all U.S. time zones, up to 80% cost reduction, and dedicated account managers. It is recommended that home health practitioners work with an experienced billing company to stay competitive and maximize revenue and profitability.