Uncovering the top KPIs for Revenue Cycle Management
The healthcare industry is undergoing fast transformation, and healthcare organizations are under constant pressure to function at their highest possible efficiency while preserving the integrity of their revenue cycle. Therefore, it is essential to understand industry norms and compare your RCM performance to them. It is vital because it improves revenue cycle efficiency, identifies industry trends, and reveals how to adjust course if things go awry. The HFMA explains 29 MAP Keys or KPIs, which are industry-standard measurements. The three categories of key performance indicators are precision, productivity, and reconciliation. KPIs can assist reduce compliance risk and assure billing accuracy. Here are our top 10 KPIs, although these will change based on the objectives and requirements of each facility. Cash Collections from Point-of-Sale Services (POS) Rate of Clean Claim Days Completely Discharged Never Billed Bad Debt Accounts Receivable Days Late Fee as a Share of All Costs Collection Cost Rate of Resolve Cash Receipts as a Share of Gross Patient Service Revenue Collections Net Percentage OUR TOP 10 KPIS ARE EXPLAINED AS FOLLOWS: 1). CASH COLLECTIONS This KPI can help you determine how effective your POS systems are. It also tracks POS collection and refers to payments received before services are performed and up to seven days following. Divide the POS payments by the collected self-pay cash to get the KPI’s value. This KPI is also crucial because it can assist in identifying issues with POS operations that affect RCM. For example, a Near-term specialist claims that “Increased collections and revenue loss may result from inefficient up-front payments. Organizations that require long-term payment alternatives (more than seven days on average) may not profit as much from this metric.” 2). Claim submission This KPI demonstrates inefficiencies and issues with claim submission and processing. Rejected claims take a long time to remedy and may result in charges. The longer it takes to determine eligibility and receive payments, the longer it takes to submit claims and resolve disputes. Though other KPIs are related to claims processing efficiency, the clean claim rate displays the average number of perfect daily claims that pass rather than the total number of claims approved. 3. Delayed claims The DNFB KPI measures revenue cycle performance by focusing on the claims-generation process. This statistic will highlight the impact of claims inputting on cash flow, including concerns linked to delayed claims. To calculate the measure, divide the total amount in DNFB by the average daily gross patient service revenue. Again, the income statement and unbilled accounts receivable can help you figure it out. 4). BAD DEBT Collecting patient payments on time is a complex problem in RCM medical billing, and provider offices frequently fail to do so, resulting in bad debts. Unfortunately, in every healthcare business, bad debts are reasonably joint. To calculate how much you lose, divide the allowable charges by the bad debt write-offs. An increasing bad debt percentage will indicate whether you need to change your communication methods with patients or provide them with better financial assistance options. 5). ACCOUNTS RECEIVABLE DAYS (A/R) The number of days spent in A/R reveals the average time it takes to get compensated for services. This rating measures how effective the practice is at receiving money for services and how well it manages Account Receivables. To calculate this KPI, take the balance sheet and income statement data and divide total A/R by average daily net patient service revenue. Then, divide total annual revenues by 365 to get the average daily net patient service revenue. 6). Late Fee as a Share of All Costs Late charges are a percentage of total charges used to assess revenue collection efficiency and identify revenue capture possibilities. You must eliminate wasteful costs, increase compliance, and accelerate cash flow to find revenue capture possibilities. 7). Collection Cost “Cost to collect is a performance indicator that assesses efficiency and productivity in a trending manner.” Total Revenue Cycle Cost / Total Cash Collected is the HFMA definition of the cost to collect. This definition can include IT costs with or without them. 8). Rate of Resolve This KPI illustrates how effective your RCM process is overall, from eligibility to billing and coding. Divide the total number of claims paid for a specific period by the total number of claims for a specific time to get this KPI. The higher the proportion, the better. If your rate is greater, your staff and process are both adequate. Consider credentialing eligibility verification, authorizations, and codes if your rate is low. A flat charge impacts staffing costs and cash flow because providers invest 10 to 30 minutes and $50 on average for each rework claim. 9). Cash Receipts According to the HFMA, organizations could create the KPI by dividing the total patient service cash collected, which can be found on the balance sheet, by the typical monthly net patient service revenue, which can be found on the income statement. Provider organizations should withhold a portion of the total revenue collected for patient services, including patient-related settlements and payments like Medicare pass-through, Medicaid DSH, Direct Graduate Medical Education, and safety-net payments. 10). Collections Net Percentage By collecting “collectible” money, the net collection percentage gauges success. To ascertain this value: From the total receipts, subtract the refunds. Subtract the contractual modifications from the total fees. After that, divide the first and second values. Orders, payments, and adjustments are the three variables that might cause changes in the net collection %. The net collection percentage will be higher if adjustments rise relative to payments and charges. Therefore, verifying that changes are being posted appropriately by the personnel and that accounts are not being written off rather than collected or appealed is critical. Modern technology, an excellent back-office staff, and strict attention to revenue and reimbursement rates are necessary to operate a profitable hospital or clinic. By working with RCM specialists like DoctorPapers, we can help you enhance your revenue collections by bringing data-driven processes, experienced revenue cycle professionals, and hi-tech. This will put you on the
What Is Revenue Cycle Management in Healthcare?
Healthcare revenue cycle management is taking care of a healthcare organization’s finances. This includes things like billing, coding, and getting paid. If you are new to the revenue cycle or have been doing it for a while but need help with your processes, here is an overview of what it is and how it works. Revenue cycle management (RCM) is a process that directly affects the financial health of the healthcare industry. Revenue cycle management services can help improve billing and coding accuracy while reducing the number of denied claims, appeals, and follow-up work. The phrase “revenue cycle management” refers to precisely what it sounds like: a method that healthcare providers can employ to manage the administrative and clinical operations included in their revenue cycle. The revenue cycle starts as soon as a patient calls a healthcare provider to make an appointment. The revenue cycle is over when all the money for the appointment and treatment has been paid. Revenue cycle management’s goal is to find any problems in the provider’s revenue cycle and fix them. With good revenue cycle management, care providers can get the most money back from their claims and make more money. This helpful guide will discuss the benefits of hiring someone else to handle your medical billing. We’ll also answer some of the most common questions about the process and point people to places where they can learn more. What is healthcare revenue cycle management? For a healthcare organization to be successful, it must process claims quickly and make sure that patients know what they owe and when they need to pay for services. The goal of RCM is to get more money from patients, reduce bad debt, and make patients happier by cutting down on wait times and making it easier for them to get care. It manages an organization’s whole revenue cycle to ensure that claims are processed quickly and correctly. RCM can be used at every level of an organization, from hospitals and clinics to doctors’ offices and individual providers. The most crucial part of revenue cycle management is getting paid back. About half of a hospital’s operating income must come from it. Reimbursement is how a hospital or other healthcare provider gets paid for their patients’ services. It’s also known as “claims processing,” and it involves sending claims to insurance companies so they can pay you back. Reimbursement is how a hospital or other healthcare provider gets paid for their patients’ services. It’s also known as “claims processing,” and it involves sending claims to insurance companies so they can pay you back. What is reimbursement in Revenue Cycle Management? Reimbursement is how a hospital, practice, or clinic gets paid by a third-party payer for their patient services. In the U.S., insurance companies and government agencies work together to pay back patients through a complicated system. To put it simply, it means getting paid for health care services. For example, when you’re sick and see a doctor, you have to pay for your visit (or, more likely, your insurance pays). The doctor will then send a bill to your insurance company. The payer, a private insurance company or a government program like Medicare or Medicaid, pays the doctor for their services based on a negotiated rate or markup on top of what they charge each patient. Our procedures for denials, appeals, and appeals follow-up Management of denials and appeals procedures are critical components of revenue cycle management in healthcare. Denials occur when your patient is not eligible for the service or benefit that you have requested. This can happen for several reasons. The patient might, for instance, be ineligible for coverage because of a pre-existing condition. Alternatively, your patient may have yet to reach their deductible or out-of-pocket maximum—more information regarding what causes denials can be found here. When a provider disagrees with an insurance company’s decision to withhold payment and requires extra information or explanation from their payer before accepting the claim as final, the appeals workflow is used. This stage is also known as “following up on refused claims.” Here are some of the tasks and workflows that come with managing procedures for denials, appeals, and appeals follow-up: Managing refused claims: When a payer denies a claim, providers must understand why the claim was denied and any additional information that may be used to support the claim. If relevant, you may be entitled to contest or appeal the judgment. Managing appeals: Effective management of your billing or reimbursement process necessitates discipline in both data input and adherence to industry standards in patient care (e.g., ICD-10). Incorrect invoicing may result in payment disputes from payers, affecting cash flow and delaying collections from patients awaiting treatments or services. Our workflows for appeals follow-up: If your organization does not have a defined business procedure for managing payer denials or appeals decisions, no single individual will be accountable for tracking these decisions throughout their entire lifecycle—from the first Denial to ultimate resolution: Due to the lack of a formalized process, your organization may miss out on critical opportunities, such as discovering and appealing denials. Furthermore, it may result in a delayed resolution and other undesirable repercussions (e.g., increased costs and fewer payments). Healthcare businesses can benefit from healthcare revenue cycle management because it helps them manage their finances better and reduce risk. This can be accomplished by utilizing the appropriate procedures, techniques, and experts in the RCM industry. To help its clients run their businesses more efficiently and cut expenses while growing revenue through better cash flow management, Medusind offers end-to-end RCM services. Importance of Revenue Cycle Management in Healthcare By using RCM services, healthcare organizations can save millions of dollars while improving patient care and satisfaction. Because reimbursement rates are frequently lower than the cost of treatment, hospitals must find ways to fill the gap. Hospitals can accomplish this by contracting out their medical billing work. What is the process of healthcare revenue cycle management? The process of revenue cycle management directly impacts healthcare organizations’ financial
