Each health care organization should maximize revenue amid rising operating costs. Revenue cycle management can help identify profitability and other financial issues that threaten a practice’s economic health. What is the best way to evaluate revenue cycle management providers? Learn about the most important metrics you should be keeping an eye on.
1. Point-of-Service Collection Rate
Point-of-service collections determine how effectively the team collects patient payments. Total cash can help health care entities understand how much the practice is earning and whether it meets expected revenue targets for a given period. Rates that fall below expectations may signal the need for workflow changes.
2. Days in Accounts Receivable
Days in accounts receivable (AR) usually indicate how long it took you to receive payment after the service. Certain providers or payment options can cause the pay to take a while to be reflected, disrupting real-time cash flow. Specific changes, like automation tools, can reduce the average time.
3. Net Collection Rate
The net collection rate is the percentage of allowable revenue collected. The benchmark should be over 95%, with lower numbers suggesting failure in AR management. You can patch it up by following up with the affected accounts.
4. Charge Capture
Charge capture documents patient visits, services provided, and the associated fees charged to that person. It’s a critical metric in revenue cycle management that indicates how quickly you can code a specific service delivery entry. Recurring delays in charge capture require a shift in documentation to avoid information gaps.
5. Clean Claim Rate
If a claim was made and released, the clean claim rate assesses whether it was correct and complete upon first submission. Health care facilities can use this to assess different cases and identify which claims are most likely to result in errors or denials.
6. Claim Denial Rate
In contrast to a clean claim rate, the claim denial rate records what percentage of claims have been denied. It should be rare for claims to be denied if you have an automated workflow and accurate documentation. It’s crucial to minimize the volume of such costs.
7. Cost to Collect
Revenue cycle management comes at a cost, and it’s important to track that total expense. Higher costs typically require greater operational efficiency, which can be achieved by outsourcing services and improving information accuracy.
8. Bad Debt Rate
Bad debt rate quantifies the AR that is deemed uncollectible, potentially due to the patient’s inability to pay or frequent insurance claim denials. Some people write off these AR and any other doubtful accounts through a bad-debt allowance.
Working With Health Care Administrative Partners for Professional Component Billing
Healthcare Administrative Partners (HAP) is a team of professionals that is well-versed in practice management, medical billing systems, and medical office operations. It has been delivering revenue cycle management services since 1995.
It covers a variety of settings and medical specialties, excelling in coding for radiology and other specialist niches. Outsourcing HAP’s services can be a beneficial way to access methodologies and tools that will maximize revenue and reduce costs with minimal changes.
While regulations continue to evolve, HAP aims to help organizations transition from error-prone manual data entry to more efficient and current coding systems. It can identify gaps that could lead to reimbursement issues. HAP also promotes compliance by auditing medical records and adhering to privacy laws. Partner with it to address concerns about health care reform changes and maintain billing transparency while your physicians focus on what they went to medical school for.
What Is the Best Way to Evaluate Revenue Cycle Management Providers?
Revenue cycle management metrics are a key baseline to understand how efficient and accurate your cash flow documentation is. Partnering with HAP can reduce errors and free up resources for you to focus on patient care.
Frequently Asked Questions
Here are frequently asked questions regarding revenue cycle management.
Why Is Revenue Cycle Management Important?
Revenue cycle management is a key process that enables health care entities to review their cash flow and maximize revenue capture, confirming their financial stability and enabling continued operations. It also documents patient interactions and payments to improve the experience.
What Are the Steps for Revenue Cycle Management?
Revenue cycle management is a long process that begins with patient scheduling and preregistration, followed by verification and actual patient registration. Services should be documented and coded medically for future claims. Different metrics from each phase should be reviewed to confirm that the process is working well.
Can Errors Occur When Reviewing Revenue?
Billing and coding errors can occur from time to time. For example, while the ICD-10 coding system expands classification options compared to ICD-9, there are errors like non-specific diagnosis codes. It’s important to rely on specialists like HAP, which expertly handles coding to ensure each diagnosis is correctly coded.
