SSI claims reporting and management series part 1 of 3: Two important claim KPIs you and your organization should be keeping an eye on

Stopping denials from happening altogether, on the front end of your revenue cycle, is a much better strategy than managing denials on the back end. With an industry average denial rate of 5-10% and a clean claim rate of 90%, SSI provides industry insights about these types of denials as well as denial prevention strategies to help you improve.

90% Clean Claim Rate (CCR)
First, it’s important to understand the definition of a CCR. HFMA defines a CCR as a “trending indicator of claims data as it impacts revenue cycle performance.” So, what does that mean? The simplest way to think about it is the claim required no manual intervention or touches. For example, when an SSI client processes a claim, the claim is programmatically run through a claim scrubber, which automatically applies the appropriate edits and then, sends the claim off to the insurance carrier via a clearinghouse. In this case, no person interacted with the claim after the edits were applied. However, some organizations have adopted their own rules for claims processing, which automatically requires someone to edit or change claims for reasons specific to them. Bear in mind that touches equals time and time equals money. Any manual intervention can slow down the time to process a claim and thereby delay payment. In either case, the adoption of a CCR target of ninety percent seems to be the latest trend across provider organizations and SSI recommends using this as a benchmark to determine whether or not additional work might be required.

How does your organization stack up against these denials related key performance indicators (KPIs)?

5% Initial Denial Rate (IDR)
Next, on the back end of your revenue cycle, it’s important to keep an eye on the initial denial rate, which is calculated as the percent of claims denied at the first initial response from the payer. This rate is calculated by taking the total initial denied claims and dividing that number by the total number of claims submitted. However, that can get a little tricky in terms of what you should or should not include in those numbers. For example, most organizations exclude rebills from these totals, but others do not. For SSI clients we recommend excluding rebills when calculating your IDR. The important thing to remember is to be sure to always ask what is and is not included when reviewing this metric. For reference, SSI recommends a benchmark of five to ten percent IDR with five percent being the ideal target.

In addition, it’s important to look at your organization’s IDR by payer. For example, if you run your IDR calculations by your highest volume payers, you may be able to quickly identify those that are having the biggest impact on your IDR. From there, you can appropriately focus your resources to make improvements on the claims going to those specific payers. And keep a close eye on any positive correlation between your IDR and CCR. For example, what you don’t want to see happen is for your CCR to improve and as a result, your IDR increases.

When comparing your organization’s CCR and IDR rates to other organizations, be sure to compare against those of like type – size, location, specialty, etc.