Kareo - We Simplify Healthcare

What is Payment Velocity?

The most important number for your business

In the current environment of declining reimbursements and skyrocketing costs, small hiccups in your billing process can take your practice on a financial rollercoaster. Practices today need simple solutions to monitor the early warning signs of problems and respond quickly to avoid disruptions in cash flow. To respond to this need, we created Payment Velocity as a single number to help you measure and improve the health of your practice.

The early signs of an unhealthy practice

There are many steps in the process to getting paid from scheduling, through the doctor-patient encounter, and finally, the insurance and patient billing and collections process. With so many steps, it's no surprise that many things can go wrong. Delays in entering charges, sending paper rather than electronic claims, and high denial rates are just a few of the problems you may be experiencing. All of these problems will slow down your cash flow.

The most important number for your business

A long payment cycle is a leading indicator for many problems associated with your practice. At Kareo, we believe your time to payment is the single most important metric for your practice. That's why we measure the average number of days from the date you see the patient to the date you get paid from patients and their insurance companies. We call this number Payment Velocity and we track it closely for every provider on Kareo.

The difference and relevance of Payment Velocity

Kareo's Payment Velocity is similar but superior to other accounting metrics, such as Days in A/R. Days in A/R estimates the number of days a dollar spends in your accounts receivable and is calculated by comparing your charges to your accounts receivables. Unfortunately, there are at least two problems with Days in A/R. First, the formula is an estimate and can easily be distorted by swings in charge volume related to seasonality or the growth of your practice. Second, it only measures payment turnaround time from the date charges are entered, which does not give you a complete picture since administrative delays between appointment and charge entry can add weeks to the cycle. In contrast, Kareo's Payment Velocity measures the actual time it takes for an average dollar to be collected from the date you see the patient until the date you receive payment, and therefore, more accurately measures how quickly you get paid.

Continually improving the health of your practice

We measure and report your Payment Velocity prominently in the Kareo application and through performance reports delivered to your email. Then, we benchmark your Payment Velocity against your peers to give you an objective look at your relative performance. Finally, we use statistical data across our customers to share best practices on how you can improve the performance of your practice. This fresh, novel approach helps you systematically eliminate problems in your practice before they cause major disruptions to your cash flow.

The combined power of Kareo and PatientPop

As leaders in clinical, financial, and practice growth technology, Kareo and PatientPop have joined forces as Tebra to support the connected practice of the future and modernize every step of the patient journey. Learn more