Top KPIs to understand revenue cycle management success

The healthcare sector is developing at a rapid speed. Healthcare firms understand constant pressure to operate at maximum efficiency while maintaining revenue cycle integrity. Therefore, understanding industry standards and comparing the RCM performance to those industry standards is crucial.

The aim here is to enhance the revenue cycle efficiency, identify trends and see how to shift in the right direction if things go wrong. Revenue cycle management companies focus on crucial dynamics, i.e., accuracy, productivity, and reconciliation. These are essential KPIs that lower compliance risk and ensure the accuracy of charges.

While these systems vary depending on a specific facility's goals and needs, there are vital areas our healthcare debt recovery services focus on as a part of the RCM's success.

Point of service cash collection

POS cash collection helps determine the effectiveness of the POS system. Also, it helps your organization track POS collection and relates to payment received before services are rendered. We divide the POS payments by the total self-pay cash collected to find the KPI's value.

Another significant reason this KPI is essential is that it helps identify issues that affect the operating procedure. For example, decreased efficiency in up-front payment leads to enhanced collections and revenue loss. However, those service providers that look for long-term payment options may not benefit from these metrics.

Bad debt

The effectiveness of your revenue cycle management companies can be understood through the bad debt value. You can also determine the effectiveness of pre-service financial counseling or similar programs. However, this must not include lost debts.

Inefficiency in revenue cycle areas is evident in a higher bad debt value. You can simply find the value by dividing the income statement's bad debt by the gross patient service revenue over a set time.

Days in AR

The days spent in AR reveal the average time you get paid for services. The value determines the effectiveness of obtaining payment for services. It is more about deciding effectiveness in receiving compensation for services and how well the practice manages Account Receivables.

To find the KPI, you need to pull information from the balance sheet and income statement and divide total AR by the average daily net patient service revenue.

Resolve rate

The resolve rate primarily focuses on the overall effectiveness of the RCM process. To understand this KPI, you need to divide the total number of claims paid for a specific period by the total number paid for a particular time.

If the rates are higher, the staff and the processes are both sufficient. It's best to focus on credentialing eligibility verification, authorizations, and coding if the rates are low.

Net collection percentage

The net collection percentage helps measure the success by simply collecting "amounts collectible." Here's how you can find the value.

• Subtract the refunds
• Remove the contractual adjustments
• Divide the first value by the second value

If you see that the adjustment has increased due to payments and charges, the net collection percentage improves. Also, it's essential to confirm that the staff accurately posts adjustments. The revenue cycle management companies ensure that the accounts are not written off rather than collected or appealed.

Conclusion

RCM system will ultimately help in transitioning the industry. The analytics here allows payers and providers to get a more detailed insight into their patient population. Healthcare debt collection services can visualize where their revenue cycle has room for improvement by sorting billing data and producing corresponding reports.

Revenue cycle management companies help ensure the correct medical codes are assigned to the right patient, helping speed up the process.