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5 Performance Metrics Every Payer Should Be Monitoring

How Tracking the Right Data Can Improve Efficiency, Reduce Costs, and Enhance Member Satisfaction

In the fast-changing world of healthcare, payers—whether insurance companies, health plans, or managed care organizations—are under constant pressure to improve efficiency, reduce costs, and enhance member satisfaction. But how do you know if you’re succeeding? Tracking the right performance metrics can provide valuable insights into your organization’s effectiveness and highlight areas for improvement.

Here are five key performance metrics that every payer should be monitoring.

1. Claims Processing Time

Nobody likes waiting, especially when it comes to healthcare claims. The faster and more accurately claims are processed, the better the experience for both providers and members. Long delays can lead to frustration, increased administrative costs, and even regulatory penalties.

Why it matters: A streamlined claims process reduces backlogs, improves provider relationships, and ensures members get the care they need without unnecessary delays.

What to track:

  • Average time to process claims
  • Percentage of claims processed within a set timeframe (e.g., 30 days)
  • Rate of claims requiring manual review

2. First Pass Resolution Rate (FPRR)

Denied or delayed claims don’t just slow down operations—they cost time and money for both payers and providers. The First Pass Resolution Rate measures the percentage of claims that are processed and paid correctly the first time, without needing adjustments or resubmissions.

Why it matters: A high FPRR means fewer errors, reduced administrative costs, and faster reimbursements. A low rate could indicate issues with provider documentation, coding errors, or outdated claims processing systems.

What to track:

  • Percentage of claims approved and paid without resubmission
  • Most common reasons for claim denials
  • Trends in denials by provider type or service

3. Member Satisfaction and Complaint Rates

At the end of the day, payers exist to serve their members. Tracking satisfaction levels and monitoring complaints can help identify areas where service is falling short—whether it’s slow claims processing, poor communication, or difficulties in accessing care.

Why it matters: Happy members are more likely to stay with their health plan, reducing churn and increasing overall engagement. High complaint rates can signal systemic issues that need to be addressed.

What to track:

  • Net Promoter Score (NPS) to measure member satisfaction
  • Complaint volume and types
  • Average response and resolution time for complaints

4. Cost per Member per Month (PMPM)

Understanding the average cost of care per member is critical for financial sustainability. The PMPM metric calculates the total healthcare costs (claims, administrative expenses, etc.) divided by the number of enrolled members per month.

Why it matters: A high PMPM could indicate inefficiencies, rising treatment costs, or increased utilization of high-cost services. A lower PMPM suggests better cost management but should be balanced with ensuring members still receive adequate care.

What to track:

  • Trends in PMPM costs over time
  • Breakdown of spending by service type (e.g., inpatient, outpatient, pharmacy)
  • Cost variations by demographic or risk level

5. Provider Network Adequacy and Utilization

A strong provider network is essential for giving members access to the care they need. This metric assesses whether there are enough providers in a plan’s network to meet demand and whether members are utilizing in-network services effectively.

Why it matters: A lack of available providers can lead to long wait times, member dissatisfaction, and increased out-of-network costs. Tracking provider availability helps ensure access to quality care while keeping costs in check.

What to track:

  • Ratio of members to in-network primary care providers and specialists
  • Average wait times for appointments
  • Percentage of claims from in-network vs. out-of-network providers

Staying Ahead with Data-Driven Insights

By closely monitoring these five key performance metrics, payers can make more informed decisions, improve operational efficiency, and enhance the overall healthcare experience for both providers and members. Data-driven insights don’t just help organizations stay compliant—they also drive better outcomes, reduce costs, and improve patient care.

Want to stay ahead of industry trends? Start tracking these metrics today and take proactive steps to optimize your payer operations.