DNFB in Healthcare: How to Improve this Key Revenue Cycle Metric

You rely on your KPIs to analyze the performance of your revenue cycle management team. Without a clear understanding of your revenue cycle metrics, you're limited to your cash balance as an analysis tool. Unfortunately, your cash balance isn't a good indicator of your organization's financial health. One metric that can provide insight into the efficiency of your revenue cycle management practices is DNFB.

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What is DNFB in healthcare?

DNFB stands for discharged, not final billed. It’s a measure of the ratio of accounts that are held in billing. Bills that don't go out can't be paid. A high DNFB is a revenue killer for your practice. There are many reasons for a high DNFB, but regardless of the reason, it can negatively affect your cash flow and net revenue.

How to calculate DNFB

DNFB is reported in AR days. It's calculated by dividing the dollar amount in accounts discharged not final billed by average daily revenue. As a metric, DNFB can be used to compare performance against other hospitals.

DNFB vs DNFC

DNFC (discharged not final coded) and DNFB are complementary metrics. DNFC accounts need additional coding or documentation requirements, while DNFB accounts need claims or billing edits before they can be submitted for payment. Ideally, the combined DNFC/DNFB benchmark is less than five days.

The Impact of High DNFB on Reimbursement

Navigating revenue cycle management has become a complex challenge for many practices that are feeling the pressure to become more efficient throughout the process. High DNFB rates can have tremendous financial consequences for healthcare organizations. The reduced reimbursement rates and increased costs associated with excess DNFB negatively affect your revenue, impeding your ability to provide high-quality care.

High DNFB rates can indicate a problem in your revenue cycle management processes. Both the government and managed care payers stipulate the number of post-discharge days providers have to submit claims. When the submission of claims is delayed due to incomplete or missing information, your organization will experience a decrease in cash collections and an increase in denial write-offs. Tracking your DNFB and analyzing the root causes of high rates can help mitigate these losses and increase your net revenue.

Additionally, DNFB can lead to increased administrative burden and costs as you may need to spend more time and resources tracking down missing information and following up with payers to ensure that bills are processed correctly. To mitigate the impact of DNFB, you can implement strategies such as better coordination with payers, improved billing processes and IT systems, and increased staff training to ensure that bills are processed and submitted in a timely manner.

Common Causes of High DNFB

There are many reasons your practice may have a high DNFB rate. Analyzing your current processes can help you determine where you need to shore up training or implement automated workflows to speed up handling billing issues. Some of the most common causes of a high DNFB include:

Inaccurate or incomplete documentation

Inaccurate or incomplete documentation can lead to coding errors, resulting in the patient being billed for services that were not provided or not being billed for services that were provided. Incomplete patient data can also make it more difficult for the billing department to accurately generate and process claims, leading to delays and additional administrative costs.

Insufficient staff training on best billing and coding practices

If your staff isn't fully trained on the best billing and coding practices, it can lead to errors in the billing process. These errors can result in claims being denied or delayed and requiring additional resources to complete. Additionally, if your staff isn't well-versed in the latest billing and coding regulations and guidelines, they may not be aware of the most efficient and effective ways to submit claims, which can also contribute to a high DNFB.

Complex and inefficient billing processes

Complex and inefficient billing processes can cause a high DNFB by delaying the submission of claims to insurance companies or causing errors in the claims that result in denied or delayed payments. These delays and errors can result in more patients being discharged before their bills are fully processed and paid. Additionally, if the billing process is too complex or time-consuming, your staff may have problems staying on top of the paperwork and ensuring that all necessary information is included in the claims, which can further delay the billing process.

Best Practices to Improve DNFB

Establishing your baseline DNFB will give you a starting point to measure progress and identify the processes contributing to charges being held. Once you have that data, you'll know where to focus your improvement efforts, and you'll be able to track the effects of implementing new systems and procedures.

Increase point-of-service collection

Point-of-service collection is one of the most effective tools in reducing DNFB rates. When you collect deductibles, co-pays, and out-of-pocket bills upfront, you increase the likelihood that patients will pay their bills in full. Additionally, point-of-service collection can help to reduce the administrative burden on your staff by reducing the need for follow-up billing and collection efforts. Tools such as electronic billing systems, patient portals, and mobile payment apps also provide patients with clear and detailed information about their financial responsibilities.

Establish DNFB analytics and monitor holds

Pinpointing specific contributors to the DNFB and tracking them daily should be part of your comprehensive strategy to improve your DNFB. This can include DNFB accounts that are being held up by admitting errors, uncoded accounts, and those awaiting treatment authorization request (TAR) approvals. Monitoring holds and analyzing the most common sticking points will give you the data you need to implement an improvement strategy.

Keep backlogs clear

Clearing your backlogs can help you realize an immediate revenue gain. Holds related to admitting, TAR review, and health information management (HIM) should be a top priority since clearing these will allow you to recover cash immediately.

Streamline the billing process

Streamlining the billing process to reduce errors related to repetitive data entry tasks can eliminate many bottlenecks in billing.  Automating billing workflows reduces holds due to human errors and reduces the resources you need to devote to tedious administrative tasks. You'll free up your staff to focus on providing high-value services instead of chasing down and correcting mistakes that should have been caught by software.

Implementing a claims management system can also help streamline your billing processes by tracking denied or unpaid claims, generating follow-up reports, and alerting your staff when they need to take additional action. Data gathered from your claims management system can be used to detect patterns in denied claims that can help you develop more efficient and effective processes.

Ensure accurate and complete documentation

Accurate and complete documentation is essential in all phases of the patient journey for optimal care and efficient billing. When the patient's diagnosis, treatment, and insurance information are clearly and correctly recorded, it helps to minimize errors and disputes. Additionally, it helps to ensure that the patient is correctly billed for the services they received, reducing the chances of overbilling or underbilling.

Train staff on point-of-service collection and how to avoid face sheet errors

Face sheets provide a summary of key information about a patient that can be used to quickly identify them and pass along insurance information. Errors in face sheet information are easy to make and can lead to holds in admissions that turn into DNFB accounts. Analyzing common face sheet errors will highlight areas where your staff needs additional training.

Your staff should also be trained in the importance of point-of-service collection and given specific guidance on how to do it. Having financial conversations with patients can be uncomfortable for front-office staff. When they understand the benefits of point-of-service collection to your practice and patients, asking for payment upfront will be easier and more natural.

DNFB Days Benchmark: How Do You Stack Up?

If you've just started measuring your DNFB days, you may not know where to start when judging your performance. Comparing your metrics to industry standards can give you an idea about where you stand and what type of performance improvement plan you need to implement.

According to the Advisory Board Revenue Cycle Benchmarking Study, the industry standard for DNFB days is:

• High performance quartile: 5.7 days
• Median performance: 7.1 days
• Low performance quartile: 11.6 days

These statistics should give you a good starting point for analyzing your current performance and setting future improvement goals. While DNFB days are a good measure of improvement, you'll need to drill down to determine what processes affect your performance to design effective solutions.

Increase upfront collections and improve DNFB by providing cost estimates with MD Clarity

MD Clarity brings transparency across the revenue cycle that benefits your practice and your patients. Providing cost estimates to all your patients — not just those covered under the No Surprises Act’s good faith estimate requirements — lets them know what they'll be responsible for so they can make informed decisions. It also makes it easier to increase upfront collections by projecting out-of-pocket costs with a high level of accuracy.

Your patients will be more willing to make upfront payments when they understand what they're paying for and trust in the completeness and accuracy of your estimates. Your revenue cycle staff will gain insight into patterns of underpayment by insurance companies and will be able to easily assign and track investigations and appeals in a consolidated dashboard. Reach out today to request a demo and find out how we can help you optimize your revenue cycle performance.

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