KPI Benchmarks : Claim Settlement Cycle Time (Medical)
- Benchmark Range 3.0-21.8
- Benchmark Average 12.4
- Benchmark Sample Size (n) 26
* Is High or Low Best: Lower is Better
Download a Sample Claim Settlement Cycle Time (Medical)
KPI Details : Claim Settlement Cycle Time (Medical)
Claim Settlement Cycle Time (Medical) measures the average number of days required for a health insurance payer to process and pay out a medical insurance claim. Extended medical claims settlement cycle times create issues for both health insurance payers and healthcare providers (e.g., physicians, hospitals, pharmacies, etc.). For health insurance companies, long cycle times increase costs, reduce Claims Department employee productivity, and can negatively impact relationships with healthcare providers and policyholders. On the side of the healthcare providers, extended claims settlement times can impact their ability to meet short term financial obligations (i.e., pay the bills) and greatly increase administrative costs. In many cases, cycle times can be reduced by establishing and enforcing inbound claims data quality, processing claims payment electronically (e.g., through electronic data interchange, or similar) and maximizing the number of claims that are auto-adjudicated.
KPI Best Practices : Claim Settlement Cycle Time (Medical)
- Define acceptable levels of claims backlogs based on predictable historical closure rates
- Automate claims intake and adjudication tasks where possible to avoid errors, rework
- Training available for healthcare providers related to improving claims data submission quality upon initial filing
KPI Calculation Instructions Claim Settlement Cycle Time (Medical)?
The calendar dates of two events are used to derive this KPI: (1) the date that the claim was initially filed by the healthcare provider and received by the insurance payer, and (2) the date that the insurance claim was paid out to the healthcare provider following adjudication. To calculate an average claims settlement cycle time, take the sum of claims settlement cycle times over a certain period of time and divide that value by the total number of claims settled over the same time period. Include only claims that were adjudicated and paid out (in whole or in part) in this calculation. In the denominator for this calculation, do not include subsequent claims submissions following the initial submission (e.g., if a claims must be submitted twice to correct an error with the initial submission prior to payment, count that only once in the denominator).
KPI Formula :
(Sum of Medical Claims Settlement Cycle Times) / Number of Medical Claims Settled
Cost per Claim (Medical)
The total cost (salary, benefits, other overhead) of processing medical claims divided by the number of medical claims processed (includes all incoming claims, regardless of whether or not t...
KPI Type : Cost
Formula : Total Medical Insurance Claim Processing Expense / Total Number of Medical Claims Processed
KPI Benchmark Range : $0.93-$4.26