Uncompensated Care Expense as a Percentage of Gross Patient Revenue

Uncompensated Care Expense as a Percentage of Gross Patient Revenue

KPI Details

Uncompensated Care Expense as a Percentage of Gross Patient Revenue measures the dollar amount of charity and bad debt-related expense incurred by the healthcare facility in relation to the total revenue generated by the healthcare facility over the same period of time. A relatively high value for this metric is typically related to a few common factors, including inefficient call scripts and call handling policies, poor customer contact tracking and management (i.e., tracking of customer communications and contact information), an increase in payment disputes (can be due to patients or insurers being unable or unwilling to pay their bills), overstaffing of the healthcare facility's billing and/or collections functions, inaccurate projections for the amount of financial assistance patients will need, inefficient processes to determine whether patients are able to pay bills, and sub-par billing and collections employee training and performance. While a low value for this metric is preferred, the amount of uncompensated care expense the hospital can obtain without causing undue financial burdens should be balanced with the hospital's mission, financial condition, geographic location and other similar factors.

KPI Definition

The dollar amount of charity and bad debt-related expense incurred by the healthcare facility divided by the total dollar amount of revenue generated by the healthcare facility over the same period of time, as a percentage.

KPI Best Practices

• Effective collection procedures for outstanding medical bills
• Clear communication with health insurance providers to ensure medical bills will be paid for
• Track uncompensated care costs and monitor trends over time

KPI Calculation Instructions Uncompensated Care Expense as a Percentage of Gross Patient Revenue?

Two values are used to calculate this KPI: (1) the dollar amount of charity and bad debt-related expense incurred by the healthcare facility , and (2) the total dollar amount of revenue generated by the healthcare facility over the same period of time. In this calculation, bad-debt should be considered to consist of services for which hospitals anticipated, but did not receive payment. This can occur when patients are unable to pay their bills (but do not apply for financial assistance), or are unwilling to pay their bills. Include bad-debt obtained from patients who are unwilling to pay, insurers who are unwilling to pay and patients who are uninsured in the numerator. Charity, in this calculation, should be considered to entail patients who sign up for financial assistance which consists of services for which hospitals neither received, nor expected to receive, payment because they had determined the patient’s inability to pay.

KPI Formula :

(Amount of Charity and Bad Debt-Related Expense Incurred / Total Amount of Revenue Generated) * 100