Don’t measure staff performance against a single financial indicator

Setting performance expectations for staff and measuring their performance over time is an important element of managing your team.  As a leader, you must remember that you get what you ask for from your team.

If the single financial indicator is cash collections and your team is pushing towards an aggressive cash collection goal month after month, they likely will change their behavior to increase cash regardless of how they go about doing it.  Usually, this creates patient satisfaction issues on the telephone and at the front desk, and complaints about the billing team.

If the single financial indicator is the net collection rate (defined as collections/charges-contractual adjustments), then the medical group is at risk for declining cash collections over time.  How?  The fastest way to improve the net collection rate is to write off collectable balances.  The easiest way for a staff member to do that without drawing attention is by writing off balances as a contractual allowance – at least until the group starts auditing some of the payment posting.

Medical groups need to include more than one financial indicator in their staff’s performance expectations.  At a minimum, I would include:

a) cash collections

b) patient satisfaction survey scores

c) net collection rate

d) claim denial rate – this will ensure that things are done right the first time


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