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KPI – Key Performance Indicator is one of those acronyms the consulting world salivates over – it’s the golden key to hundreds and hundreds of billable hours, and it’s the bane of any revenue cycle (RCM) manager’s life, but is it really that important? Before we can answer that let’s examine how we should be using them and what they actually represent.

The “KPI” has become one of those over-used terms that tends to be applied to any report or data point that supports the narrative of the person using it. We can segment KPIs into two major categories:


  • Verifications completed
  • Cases coded
  • Charges entered
  • Bad Debt
  • Payments posted
  • Account collections / Calls completed


  • Days in AR
  • Lag days
  • Rejection rates
  • Denial rates
  • Cash collection rates / cash conversion
  • Write-offs

These are just some basic examples of data points that are used for KPIs. As an organization it is important to remember two things: the KPI is only as good as the data it is derived from and KPIs require context when considering the true import of the measure.

The Data – many systems track basic patient and financial data, tying that data back to a user to develop a performance indicator is not always as simple as it seems. I may know how many patients, charges, payments, or collection notes were entered in a particular time frame, but if I can’t tie that to a user then the value of the data is significantly diminished. The same applies for enterprise / organizational reporting – write-offs or denials that don’t tie back to detailed reasons codes do not provide adequate granularity to drive process improvement or identify potential data integrity issues. These examples demonstrate the importance of understanding the data you have to work with and how it potential impacts the quality of the KPIs you are developing.

As we discussed in an earlier article data context is as important as the data itself. Data in a vacuum doesn’t provide an accurate measure of performance. We have to understand the outside forces that impact the data we are evaluating, the technology environment, data sources, workflows, and outsourced services are just a few of the variables that can impact the resources being measured. Context provides the filter with which we need to evaluate the content of our KPI data.

The purpose of the KPI is to provide insight into the performance of our resources and our organization – is it important… absolutely. However, the value of KPIs is dependent on properly measuring the data and understanding the context in which that data is developed. Choose KPIs that can be validated, provide an adequate degree of granularity and most importantly are truly relevant to the overall performance goals you have set for your staff and organization. There are plenty of industry experts that will be glad to tell you what you need, but without a thorough understanding of your goals and environment these generic recommendations will more than likely miss the mark.