The efficiency of the billing and coding process can not be stressed enough with the value-based care now in action. The shift to patient financial responsibility is further pressuring the healthcare practices to work on improving their billing processes. Similar to any industry in the market, healthcare too needs to set up and work over their key performance indicators to identify the lagging areas and accordingly strategize for improvement.
IMPORTANCE OF KPI
KPI, Key Performance Indicators are a standard in every organization, irrespective of the industry. The aim of defining and accordingly working on the KPI is:
- Strengthen and strategize towards accomplishing the objectives and goals of the organization;
- Ensuring proper performance management;
- Motivating the staff to work better;
- Bringing the mistakes and the lagging areas on the surface to ensure maximum transparency and enhanced efficiency;
FOUR REVENUE CYCLE MANAGEMENT KEY PERFORMANCE INDICATOR:
Several elements play a pivotal role in ensuring the healthcare RCM runs smoothly and delivers well on time. Adding to the complexity is the increasing cost of medical treatment, drugs, insurance premiums, deductibles, etc. And while the KPIs are dependent on the entire structure of the organization, there is a specific set that is considered the standards for healthcare RCM.
Denials are all that decides the probability of reimbursement from the insurance company and while you might have rendered excellent services, but any error on your part can lead to the claim getting denied, forcing the team to go through all the hassle again. You should determine and establish the denial resolve rate. It can be found by dividing the total number of claims that are paid for a particular period by the total number of claims that were made at the same time. It is an integral element, necessary to measure the efficacy of the revenue cycle across eligibility in coding and billing, authorization, credentialing, etc. Calculated monthly, quarterly or yearly, the denial resolution rate is critical to ensure the financial health of the medical practice. The denial resolve rate should be high, as this will indicate that the processing is streamlined and the number of clean claims is good, while a lower percentage will put your team’s proficiency into question.
They help bring to the surface the problems that come with submitting and processing of the claims. You should focus on clean claim rate, as that will help you determine how smooth the claim submission and to process it and how much editing did it require. Clean claim rate is the average of the number of claims that pass without needing editing and the total number of claims that were initially submitted. This will help you determine whether or not the claim processing is being done to meet the facility’s financial requirements. It is essential to make sure that the rejected claims are promptly and adequately corrected, as the longer it will take for you to resolve the claim issue, the further would be a delay in clearing the payments. An ideal clean claim rate would be with 5% denial rate, which might not seem feasible, but the periodic analysis and reporting will help improve the percentage, gradually.
ACCOUNT RECEIVABLE DAYS:
This helps in determining how the AR cycle is being managed, as the number of days in AR cycle corresponds to how long does it take for the services to get paid. Balance sheet and income statement measure on a yearly basis can help determine the Days in AR, as they reflect the information of the net patient service revenue. It shows the total amount of outstanding account receivables. Tracking days in AR is important to make sure that the percentage of 90+ days insurance claim processing is not high and the total AR stays manageable, without disrupting the overall RCM flow, much. It is calculated as the current net receivables balance/Average daily charge amount.
COST TO COLLECT:
How proficient is the billing and coding department in timely collecting the adequate payment is decided by the cost to collect. Your entire collection management system can be adversely affected by a higher cost to collect. Calculated by dividing the total revenue cycle cost with the overall patient service cash received, cost to collect is crucial for maintaining the financial health of the practice. Patient-related payments, statements, and bad recoveries are included in total patient service cash collected while aspects like patient access, benefits, outsourcing, patient accounting, etc. add up to make the total revenue cost. For the in-house staff to be able to navigate through easily and calculate this seemingly challenging to measure a parameter, proper education and periodic training are essential. The possibility of errors and subsequent delays can be mitigated by implementing automated solutions, which will not only improve the cost to collect but also give the staff time to invest in more productive and meaningful tasks.
There are more such KPIs, which as we mentioned before, depends on how the healthcare practice’s functions. But if you have not defined any yet, you can start by tracking these to accelerate your payment, minimize the cost to collect and escalate your revenue.
Healthcare RCM is as intricate as it is critical. A minor processing mistake and your reimbursement can be delayed, denied, or rejected, which will obstruct the flow in your practice. Moreover, tracking, and managing KPI inhouse will lead to significant investment of time and money, which will go to drain with a minor mistake. This is why an increasing number of healthcare professionals and facility operators are going for outsourcing the revenue cycle management to a dedicated agency like Medphine.
A comprehensive solution provider of receivable management service and revenue cycle processing, Medphine’s approach to RCM management, taking care right from patient’s first encounter at the front desk through consultation, treatment and payments, ensure significant increase in efficiency, eliminate the probability of denials, rejection and enhance the quality of cash flow to the practice. Medphine RCM professionals come with extensive knowledge and experience to track, identify, and manage the claims and finances for maximum benefit.
With Medphine’s RCM experts by your side, no longer will your staff be burdened with the paperwork, and they will be able to dispense quality treatment and care to the patients in need. You will no longer have to worry about compliance issue or investing the copious amount in periodic training sessions. Medphine’s dedicated practice manager will guarantee 70% reduction in the operating cost, without compromising on the smooth processing and quality of the claim.
Get quicker reimbursement, maximum return on investment, and a higher return on investment with Medphine.
Reach out to Medphine’s representative today!