First Pass Yield vs. Clean Claim Rate: What You Need to Know

What Is First Pass Yield?

First Pass Yield (FPY) measures the percentage of claims accepted and reimbursed by payers on the first submission without requiring requested changes or adjustments. It reflects the efficiency and accuracy of a hospital’s initial claims submission process.

An FPY of 90% or higher is considered the industry standard for best practices and shows a hospital is well-versed in proper coding and submission procedures. Meeting this standard means:

• Lower risk of uncompensated care
• Faster revenue cycles and reimbursement
• Increase patient satisfaction
• Lower operating costs
• Reduced staff overwhelm

First Pass Yield Calculation

Calculate FPY with this formula:

First Pass Yield = (Number of Claims Paid on First Submission / Total Claims Submitted) x 100

For example, if a practice submits 1,000 claims in a month and 850 are accepted and paid on the first try, the FPY equates to 85%, below industry standards.

Factors That Impact First Pass Yield

Several factors influence FPY, including:

• Coding Accuracy: Incorrect or incomplete codes can trigger denials.
• Patient Information Accuracy: Incomplete or inaccurate patient information can lead to claim denials.
• Insurance Verification: Failure to confirm patient insurance details leads to avoidable rejections.
• Documentation Quality: Inadequate supporting documentation can slow down claims processing.
• Payer Requirements: Each payer has unique requirements that claims must consistently meet.
• Submission Timeline: Delays in submitting claims can result in missed payer deadlines and denials.
• Staff Education: Continuous education on billing regulations and coding updates enhances accuracy.
• Human Error: Mistakes happen, especially for organizations that rely on manual processes. One oversight can lead to a denial on the first pass.

What Is a Clean Claim Rate?

Clean Claim Rate Definition and Importance

Clean Claim Rate (CCR) measures the percentage of claims submitted without errors that pass through the system without requiring manual intervention. It does not take reimbursement into account; it only measures the number of accurate claims submitted and accepted. Clean claims are usually submitted:

• Error-free
• In full, with all required fields filled out
• In compliance with payer requirements
• On-time
• With all required documentation, patient information, and proper coding

Any hospital's goal is to avoid “dirty” claims, which must be routed back to the billing department for manual intervention and correction. Dirty claims take up much more staff time and effort than those submitted accurately on the first try.

Clean Claim Rate Calculation

To calculate CCR, use this formula:

Clean Claim Rate = (Number of Clean Claims / Total Claims Submitted) x 100

For example, if 900 out of 1,000 claims submitted are error-free, the CCR would be 90%.

Clean Claim Rate Benchmarks

Industry benchmarks for CCR show a scale of standardization:

• Excellent: 95% or higher
• Good: 85-94%
• Average: 75-84%
• Poor: Below 75%

An excellent clean claim rate shows deep staff knowledge of the billing and claims submission process. It often leads to reduced administrative costs and a higher cash flow. Teams should strive to have at least 95% of claims processed without rejection.

First Pass Yield vs. Clean Claim Rate: Key Differences

These terms are occasionally used interchangeably in industry because they are so similar. However, while FPY and CCR may seem to measure the same metrics, they focus on distinct stages of the billing process:

• FPY measures the percentage of claims accepted and paid on the first submission.
• CCR measures the percentage of claims submitted that don't need correction or intervention, regardless of whether they are ultimately paid.​

While FPY and CCR assess the efficiency of claim processing, they focus on different aspects of the revenue cycle. FPY deals directly with money as it measures claims that are reimbursed. CCR, on the other hand, only addresses the accuracy and completeness of initial claim submissions.

Which Metric is More Important?

Both metrics offer valuable insights, but they serve different purposes. FPY directly impacts cash flow by measuring the speed of reimbursement. A high FPY indicates that claims are not only submitted correctly but also meet payer requirements for payment, leading to efficient revenue collection.​

 CCR reflects the efficiency of the claims preparation process. A high CCR signifies that claims are error-free, reducing the likelihood of rejections and the need for rework.​

Focusing on just one metric is not ideal. Clean claims are usually paid, so enhancing CCR will increase FPY. FPY takes CCR a step further by considering a monetary component that assesses the efficiency of the entire revenue cycle. For optimal performance, practices should aim to maximize both metrics.

How to Optimize Both Metrics for Better Billing Efficiency

How to Improve First-Pass Yield: Best Practices

• Verify patient information and insurance coverage upfront
• Implement a robust pre-authorization process
• Ensure clinical documentation accurately supports billing codes
• Track common reasons for denials (and address them!)
• Verify patient coverage using insurance discovery
• Keep claims submission on a tight timeline

How to Improve Clean Claim Rate: Best Practices

• Use automated tools to detect coding errors before submission
• Ensure staff stays updated on coding standards and payer policies
• Again, implement a robust pre-authorization process to confirm insurance coverage before services are provided
• Create clear procedures to reduce errors in data entry and documentation
• Ensure all patient details are correct and current
• Establish clear communication channels among all stakeholders involved in the revenue cycle to streamline processes
• Conduct routine internal audits to identify areas for improvement

Leverage Office Ally Solutions to Improve RCM

Office Ally offers comprehensive solutions to enhance both FPY and CCR, helping practices streamline their revenue cycle and reduce costly errors.

Even with a strong FPY and CCR, some claims may still get denied due to incorrect insurance information or missed coverage opportunities. Instead of writing off these claims as lost revenue, staff can run them through Office Ally's Insurance Discovery to identify hidden insurance coverage. Insurance Discovery helps uncover active coverage, allowing you to resubmit claims to the correct payer and recover revenue that might have otherwise gone uncollected.

By leveraging Office Ally's comprehensive RCM solutions, healthcare providers can take control of their billing process. Partner with Office Ally today to improve your claim success rates and RCM efficiency.

Learn more about Office Ally’s Insurance Discovery here.