Revenue cycle management bridges the gaps between the clinical and business sides of the healthcare industry. It refers to the entire chain of processes from scheduling a patient appointment to getting reimbursement from the insurance companies. Partnering with revenue cycle management companies is pivotal, as they help drive data-driven decision-making and create business transformation projects. RCM KPIs enable benchmarking of the revenue cycle's performance with industry peers on the responsiveness of the patient access team, quality of the clinical documentation, the effectiveness of your cash flow cycle, and compliance with guidelines.

While healthcare revenue cycle management runs 100s of available industry-standard metrics, the HFMA defines 29 standard metrics. But, in this blog, we'll highlight the top six key indicators. Whether running a physician practice or a healthcare organization, adhering to the mentioned KPIs keep your revenue cycle in control.

POS cash collections

HFMA defines POS cash collections as all cash collected from the patient before or at the time of service or up to several days post-discharge. POS collections come with self-pays and co-pays. In order to reach this point, you can divide the POS payments by the collected self-pay cash.

Measuring this KPI enables you to track the efficiency of the POS systems or the staff accounting for the POS. In addition, it may help identify and troubleshoot core POS problems affecting the RCM process.

Clean claim rate

It is the percentage of insurance claims submitted and successfully reimbursed the first time upon submission. A high clean claim rate implies that the time spent in AR and the time taken for the provider to get compensated is reduced. Conversely, if claims are not resolved on the initial submission, it creates significant rework and cost for the provider and payer.

Measuring the clean claim rate enables healthcare organizations to track the efficiency of the claim submission process while calculating the average duration and cost it takes for a claim to be reprocessed.

Discharges not fully billed (DNFB)

It's a metric that is used to compare multiple healthcare firms. Here, DNFB can be calculated by dividing the unbilled amount for charges to discharged patients by the average daily revenue. Here, healthcare revenue cycle management companies focus on DNFB to apply on any condition where the patient has been discharged. The claim gets submitted without billing for all medical services provided.

It's equally critical to maintain the DNFB within industry standards and ensure that the service rendered gets converted to cash. DNFB is a critical cause of revenue leakage, especially in fast-paced Emergency Department settings.

Days in AR

Generally, firms run a benchmark of fewer days for days in AR. This KPI helps you identify the average time it takes for the team or the system to collect payment for the services offered. Here, healthcare collection services do calculate AR as in

Calculate the average daily charges: Add the daily charges for the past several months and divide the sum amount by the total number of days in the chosen period.

Divide the total AR by the computed daily average charges.

Claim denial rate

To calculate the claim denial rate, you need to divide the total dollar amount of claims denied by payers by the total amount submitted within the given period. A denial rate can be accepted from 5% to 10%, but what we consider the healthy one is a denial rate below 5% of the revenue cycle management process and financial flow. If you claim the denial rate is above 10%, analyze the eligibility verification, coding, and credentialing functions.

Revenue per encounter

Revenue per encounter can be defined and computed when dividing net collections by the number of patient visits in a month. This metric can provide a quick view of healthcare revenue cycle management. However, running a financially successful hospital or practice requires a fantastic back office team, state-of-the-art technology, and a diligent focus on revenue and reimbursement rates. Partnering with RCM experts puts you on the path to financial success. Healthcare debt collection agencies will initiate data-driven processes, seasoned revenue cycle professionals, and top-notch technology to improve your revenue collections.

Focus on revenue cycle enhancements

Automation technology is something that makes the process smooth. However, most healthcare debt collection agencies are now utilizing this sector. Revenue cycle management companies run resource-intensive portfolios and may need to be more readily scalable for large organizations. Rather than throwing more bodies or hours at the problem- often at the expense of the patient experience, providers can go for more innovative and cost-effective solutions.

Innovation and disruption

The very nature of RCM makes it a good fit for automation technologies. You have access to

Resource-intensive: Meaning automation offers significant savings potential

Transaction heavy: Unlike retail, healthcare revenue cycle management involves multiple customer transactions to receive payment, from initial scheduling to submitting a clean claim

When handling tasks, automation is the best option. There are codified rules and processes to follow. A significant amount of the patient revenue cycle involves manual and repeated tasks that could be automated. Besides, healthcare leaders identify coding, billing/accounts receivable, and data sharing as the main challenges to address with technology.

With an increased focus on patient experience, customer service is one of the top factors that drive RCM disruption. However, to create a patient-centric approach, staff must focus on patients. In addition, automation helps reduce repetitive manual work and redirect valuable workers to higher-value tasks.

The new normal

Digital patient access

The complete shift towards digital communication and the rise in telehealth will affect more than clinicians and office staff. As a result, revenue cycle departments must reassess their more traditional patient experience models and decide where the investment goes.

Patients who face the streamlined ease of virtual check-in and time-saving online forms are unlikely to want to go back to sitting in a waiting room or filling out pages of paperwork on a clipboard. In addition, the advancement in remote eligibility checks and digital capture of patient medical history/billing information allows for a smoother, more productive visit for patients and reduced chance of claim errors for providers.

Price transparency and payment

Americans lost their health insurance more than any other year in the nation's history, which only increased the already significant demand for healthcare price transparency. As a result, patient consumerism is rapidly increasing, and cost-conscious behavior will continue to grow.

They are the new payor, and as such, they are demanding to know how much they can expect to pay out of pocket before committing to a procedure or, at times, even selecting the right revenue cycle management companies. Price transparency must include,

• Cost of care conversations
• Accurate out-of-pocket estimates
• Cost distress and propensity to pay for screening
• Patient financing and financial aid programs

Emphasis on efficiency

A significant portion of preventative care was brought to a screeching halt due to the pandemic. The fallout was due to the financial crisis for many healthcare providers. As they continue to seek solutions to deal with the shortfall, there has been a greater emphasis on avoiding waste and trying new methods to make the entire revenue cycle more efficient.

Some of these include,

• Automated workflows to save time and reduce errors
• Revenue cycle outsourcing
• Payment portals
• Automated communication

These solutions come with ideas worth consideration, and many providers found it highly motivated to implement them during the year's financial struggles. Moreover, these cost-saving measures will continue optimizing healthcare revenue cycles for decades.

Empathy-driven customer service

Human connection, compassion, understanding, and empathy are essential. No matter how advanced automation becomes, there's still no substitute for human interaction in healthcare. However, there will be interactions that can have a lasting impact and involve large amounts of emotional energy, including resolving issues or making a life-impacting care decision.

Consumers feel that connecting with a live customer representative is still the best way to resolve such critical issues. Patients may prefer self-service methods, including chatbots, IVR, and automated text messages for basic tasks; when the chips are down, they want a real person to help.

Final Wrap

A comprehensive revenue cycle process is the new normal. It's more about combining efficient technology and personal human connection. At Vital Solutions, our healthcare debt collection agency believes that the revenue cycle can only be optimized if you treat it as a tool for patient retention and that every patient touch point is an opportunity to build loyalty.