Key Performance Indicators of Effective Revenue Cycle Management
Key Performance Indicators Of Effective Revenue Cycle Management
At QueueLogix, we are passionate about helping hospitals and health centers improve revenue cycles through cloud-based software and intelligent services. Not only does effective revenue cycle management improve work processes and revenue, but it also enables facilities to boost service capabilities. The end result is that patients enjoy more face time with their doctors.
Introduction and Overview of Revenue Cycle Management KPIs
Revenue cycle management, or RCM, refers to all the processes involved in healthcare claims processing. Starting with the period when a patient calls to schedule an appointment with the practice and ending when a balance is zeroed out is considered a revenue cycle.
While healthcare facilities have various options for managing this process, most providers utilize some form of medical billing or practice management software to track everything from coding claims to patient eligibility to co-pay collection. By employing advanced software with AI components, QueueLogix helps healthcare businesses decrease collection time by facilitating communication with various parties, including coding and billing professionals, physicians and hospitals, compliance and auditing professionals.
Here are some of the key performance indicators of successful revenue cycle management, along with best practice tips for facilities:
Gaps Between Actual Service Dates and the Dates Claims Were Filed
When evaluating revenue cycle management, it’s crucial to consider the gap between date of service and the date billed. In many cases, filing dates are delayed due to coding errors, incorrect insurance information or other mistakes on the part of staff. For example, using an outdated code generally results in a claim being denied automatically. This issue can cost the company money and time in the long run.
Cross-Referencing Charges Billed Against Appointment Schedule
In some cases, patients don’t follow through on scheduled appointments. Many practices find themselves losing money due to cancellations and no-shows. Additionally, a large number of patients neglect to attend follow-up appointments as scheduled. By cross-referencing charges billed against appointment scheduling, practices can assess the effect of these missed revenue opportunities.
Percentage of Clean Claims
A clean claim is one that was processed correctly by a health facility and reimbursed by the payer on the first submission. When assessing the effectiveness of a revenue cycle management system, it’s important to determine the percentage of clean claims while uncovering the causes of those that were unsuccessful. By monitoring trends, you can identify areas of weakness in the current system moving forward.
Reimbursement Turnaround Time
A reimbursement rate refers to the cents on the dollar that a healthcare practice receives on a claim as compared to the amount that was billed for the service. If your facility is filing accurate claims, your turnaround time for reimbursement should be relatively quick. On the other hand, companies that lack effective revenue cycle management may experience significant delays in getting paid.
By tracking this data, hospitals and health facilities can take steps to rectify inefficiencies while improving communication strategies with insurance companies that are typically slow to pay.
Denial Trends by Payer
Claims denials are a fact of life in the healthcare field. However, by adopting efficient revenue cycle management, hospitals and doctors’ offices can take steps to boost profitability. Some of the numbers to consider include:
- Percentage of denied claims (both overall and by payer)
- Percentage of denials by category
- Percentage of no-response claims
The goal is to reduce over time the number of denials that result from practice errors as compared to payer errors. Additionally, health providers can assess process areas that need improvement within the revenue cycle.
Monitoring Insurance AR
One of the benefits of effective revenue cycle management is that it allows health providers to automate notifications, so you’re contacting payers at the right times based on both age of receivable and the payer’s individual schedule. By requesting payments as soon as they’re considered late, you boost your odds of successfully collecting on debts before claims are lost or forgotten.
Monitoring Percentage of Money Collected Against Charges Billed
Health providers often lament the fact that they aren’t collecting larger percentages of their accounts receivable. As a healthcare provider, it’s important to determine how much money you’re collecting compared to the amount billed. Additionally, you can divide total accounts receivable by average daily charges to determine the days in AR. Generally, an accounts receivable of 120 days or more is indicative of problems with your RCM.
Quality Assurance Reviews
Regular quality assurance reviews of your revenue cycle management are the best way to determine efficacy while providing confidence to both internal management and external parties, like patients and regulatory bodies. At QueueLogix, we are proud to say that our clients have enjoyed 50 percent or greater increases in productivity related to medical coding and billing, along with 75 percent reductions in processing times.
Call today or contact us online to learn more about key performance indicators and how QueueLogix can help you institute a more efficient revenue cycle.