Use the following self-assessment tool to ensure that you have key processes covered ("yes" is the preferred response for each process). Then, check your performance measures against the better-practice target levels in the performance indicator section.

Billing and Claim Submission

Key Processes



Follow-up Action

1. The primary and secondary billing is completed by a dedicated team with no other responsibilities.




2. Staffing is sufficient to minimize or prevent billing backlogs.




3. Quantity and quality performance standards are part of billers' job descriptions.




4. Perform regular quality control reviews of billers' work at least quarterly.




5. Billers receive performance-based incentive compensation.




6. All billers receive annual Medicare compliance training.




7. Billers are cross-trained on more than one payer type.




8. Use an on-line electronic billing system with the following capacities:




  • New billing edits are easy to add.




  • Gets automatic daily downloads from PFS system.




  • Provides biller-specific worklists.




  • Major payer edits are supplied and supported by the vendor.




  • Automatically upgrade claim-submit notices to the PFS system.




  • Automatically upgrade claim corrections to the PFS system.




  • All claims (both paper and electronic) are editable.




  • Automatically correct standard errors.




  • Provides biller-specific productivity and error reporting.




  • Provides clinical department-specific error reporting.




  • Automates Medicare-supplement and COB-2 claim submission.




  • Interfaces with on-line Medicare-compliance system.




9. Use Patient Friendly Billing® concepts for patient billing.




10. Use proration to bill insurer and patient simultaneously.




11. Include credit card option on patient statements.




12. Patient statements clearly communicate payment policies.




13. Patient statements provide the hospital's customer service phone number.




14. Patient statements provide the hospital's customer service web address.




15. Send patient receive letters or statements at least monthly for outstanding balances.




Key Performance Indicators



Follow-up Actions

HIPAA-compliant electronic claim submission rate




Final-billed, claim-not-submitted backlog

= 1 A/R day



Medicare supplemental insurance billing following adjudication

= 2 business days



Non-Medicare COB-2 insurance billing following COB-1 payment

= 2 business days



Medicare return-to-provider (RTP) denials rate

= 3%



Cost to produce and mail outsourced patient statements, per statement

20¢ - 25¢



This checklist was based on HFMA's February 2004 audio webcast, "Developing Key Performance Indicators for the Revenue Cycle," by David Hammer, Vice President, Revenue Cycle Management Services, McKesson Information Solutions, and Roland Funsten, Assistant Vice President, Revenue Cycle Operations, St. Vincent Hospital, Indianapolis, IN. Questions or comments may be directed to  or

Publication Date: Tuesday, August 03, 2004