Two Key Business Metrics Explained
I want to highlight and define two key important business metrics available on the Starling Practice View portal.
The Work RVU
The first item is found under the Reports tab for the report “Service Analysis” and that is the “Work RVU” column. What is a Work RVU and why is it important? Simply put: an RVU is the system Medicare uses to decide how much it will reimburse a physician for each of the 9,000 or so procedures (CPT) covered under its fee schedule. The RVU is determined by three components including physician’s work, practice expense and malpractice insurance. The physician’s work is further determined based upon time it takes for a procedure, the technical skill and physical and mental effort.
For our purposes the RVU is a great analytical tool for a physician to review their trends as to how busy their practice is on a comparative basis. As payment from Medicare and other payers is tied to the RVU, the trending of RVU is the most relevant measure we have to compare revenue to work performed. If revenue is down the first approach of the finance team is to compare RVU’s for the period in question. We are currently in development to add the Work RVU to the “At a Glance” tab of the practice view so it will trend with charges.
On the “At a Glance” Dashboard in the Starling Practice View there is a calendar with a metric noted as # of Days in AR. The Days Outstanding metric is a key measurement of how long it takes on average from date of service to date of collection. This tool is important for us to understand the efficiency of collections and in total measures the entire revenue cycle process. The MGMA median for practices is 33 days for example. The calculation which is standard in the industry is based upon Accounts receivable balance divided by charges for last 3 months divided by 90 days. This in essence takes the Accounts receivable and divides by the average daily charges.
The Qlkview dashboard is an amazing analytical tool and its power comes from the filter sections that allow Practice Managers and Physicians to dive deeper into their practice based upon payers or service lines. Of course, the Finance team is here to supplement and support our physician practices so there is complete understanding of each practice.