Podiatry Coding & Billing Alert

Gauge the financial health of your practice. Find ways to boost profits.

As you feel out how the shift in payment models will affect your practice, it’s important to have a baseline as you gauge MIPS’ potential effect. How long has it been since you’ve really focused on your practice’s financial performance and compared it to other practices in your specialty?

John V. Guiliana, DPM, MS offers us some common podiatry practice benchmarks so that you can compare your practice to your peers.

Overhead percentage New practice: 65 to 70 percent Average practice: Less than 60 percentMature practice: 55 percent or less

Payroll ratio: Staff overhead as a percentage of collected revenue (without healthcare costs, payroll tax obligation): 18 to 20 percent for an average-sized practice. For staff healthcare costs: add 3 to 4 percent

Per patient revenue (total patients/collected revenue) Minimum: $90 (based on average payer mix)

Clean claims percentage (not rejected due to internal error): 97 percent

Gross collection rate: 65 percent (collected revenue/gross billing)

Adjusted or net collection rate: 96 percent (collected revenue/ (gross billing - contractual adjustment) Total accounts receivable: less than two months gross charges

Average time in accounts receivable: 50 days

Percentage in AR over 90 days: less than 15 percent 

How to Use These Benchmarks

It’s important to compare your numbers not only to other practices, but also to your own practice’s past performance, experts stress. YOY (year-over-year) comparisons can help you identify trends and tell you whether things are getting better or worse at your practice.

And a word of caution: Performance measured against benchmarks is like a symptom — a mere indicator that something may be going wrong. You don’t jump to conclusions in the clinic, and you shouldn’t with your practice’s financial performance either. If you see a benchmark that raises a red flag, investigate further to find the cause before you take action.