Revenue Cycle Management (RCM) has historically not been a focus area for optimization within healthcare organizations. With the onset of the pandemic, Healthcare providers have taken a serious hit financially due topreventive medicine visits and elective procedures declining. This decline has accelerated the need to streamline operations due to having to lower staffing and decreases in cash flows.
Revenue Cycle Management (RCM) is the set of operations used by health organizations ensure financial closure on accounts and staffing to support these processes has become increasingly important for Healthcare organizations to achieve their optimal financial yield. To improve efficiencies, Healthcare organizations will need to look beyond the normal KPIs and identify opportunities for improvement in their processes. These process improvement opportunities and automation of manual tasks will increase efficiencies and improve financial parameters.
We will now look at various phases within the RCM workflow in a healthcare organization and review key KPIs being measured and the typical IT interventions that can be done to address them.
Scheduling and Pre-registration Process:
Patient Access/Registration: There are multiple steps involved in the patient check in and documentation collection:
Charge and Diagnosis Capture: Within practice management organizations, charge and diagnosis capture occur during the clinical documentation phase of the revenue cycle.
Billing: This is where claim filing and reimbursement are critical to financial performance. The largest area for automation opportunities lies within the billing component of revenue cycle management.
Accounts Receivable (A/R) Management. This is the final process in the RCM life cycle before the process loop begins again.
A/R days is the typical KPI utilized to measure this resolution. However, one can also look at aged A/R as a percentage of the total billed. This metric is a good indicator of the healthcare organization’s effectiveness at liquidating A/R. Drilling down by Payer will allow the practice to compare payment resolution for each Payer within each aging bucket. By analyzing trends, practices can identify Payer categories where account liquidation is the slowest and put processes in place to reduce >30-day aging buckets for that Payer.
Net collection rate and write-off rate are two KPIs that can help measure the collection of patient responsibility fees. By reviewing the net collection rate, practices can measure how effective upfront collection processes are working and identify better methods for collecting patient responsibility fees up front. Finally, write off rate can help practices review by Payer how much patient responsibility the practice is writing off to bad debt. Examining this rate by Payer can assist the practice in contract negotiations. Automating notifications when any of these KPIs are trending negative would be extremely beneficial to Accounts Receivable staff. This would free up their time from manually reviewing reports and dashboards to proactively start collecting outstanding balances from patients and ensuring prompt reimbursement from insurance payers.
There are many options available for monitoring revenue cycle performance. While we have reviewed a few additional KPIs to expand monitoring, the future is firmly centered around providing predictive and prescriptive analytics. These analytics will allow practices to see where the business is headed financially and come up with remedial measures, as needed, thus increasing the overall revenue cycle financial yield.
About Virginia Williams
Virginia Williams is Director – Healthcare at Accolite Digital, a leading provider of cloud and digital product engineering services across the banking and financial services, technology, healthcare, communications and media, and logistics industries. Headquartered in Addison, Texas, Accolite helps its customers successfully navigate their digital transformation journeys by providing digital product engineering, cloud services, data engineering, DevOps, customer experience, and design services.