Mastering Revenue Cycle Best Practice Metrics
Revenue cycle management is critical to the financial success of healthcare institutions. In the ongoing effort to master your revenue cycle performance, it helps to know the key performance indicators to track. Below, the professionals at Vyne Medical describe four essential metrics to use in identifying your organization’s RCM strengths and weaknesses:
- Rate of Claim Denials
- Point-of-Service (POS) Cash Collections
- Amount of Bad Debt
- The Length of Time an Account Remains in Receivable Status
Rate of Claim Denials
According to PNC Financial Services Group, 91 percent of hospital executives surveyed say they must resubmit claims one or more times before they are paid, and one out of five said they must resubmit claims over six times. What’s more, PNC’s survey found that up to 5 percent of all hospital claims are never paid at all. Insurance claim denials cost providers millions of dollars each year, not only in claims denied but also in resources dedicated to managing them. The rate of claim denials is a great metric for measuring revenue cycle management success.
You should also consider monitoring sub-metrics associated with claim denials, including denial write-offs as a percentage of gross revenue. Identifying the key areas from which denials originate is also incredibly helpful. The root cause of denials can occur at any point in the revenue cycle, though organizations are more likely to see an issue at the front end, such as at the registration and eligibility stage.
Research shows that while only around two-thirds of denials are recoverable, 90% are preventable in the first place. Preventing denials from occurring is an effective way to keep the costs associated with denials low—much more effective, in fact, than focusing exclusively on overturning denials once they’ve been received. That’s why a robust denial management program is an excellent way to efficiently reduce the costs associated with denials and bolster your bottom line overall.
Healthcare administrators can stop denials in their tracks with the Trace® solution for denials management from Vyne Medical. Trace digitally captures and centralizes communication around the patient for easy access across your organization, reducing back and forth between teams as they collaborate to win the denials battle. The results include fewer denials, shorter appeals, and better outcomes for revenue cycle management.
Point of Service Cash Collections
Point of service collections makes a great metric for measuring the effectiveness of revenue cycle management. The fewer issues that arise with your point-of-service system, the more payments your institution will be able to collect, and the more easily you’ll be able to avoid expensive write-offs.
This metric is particularly important as high-deductible plans, which put the onus of payment on patients, rise in popularity. These plans mean an increase in the percentage of payments being made before the point of service, and more out-of-pocket expenses for patients.
To meet new trends and their challenges head-on, healthcare institutions need a way to increase point of service collections. Access to up-to-date financial data gives teams the ability to provide self-pay estimates and payment options to every patient. Your institution can leverage this data to assist patients in making informed care decisions and foster improved communications surrounding upfront costs of care.
Trace voice solutions can be used to record phone and in-person conversations with patients during pre-registration, at the point of service, and post-discharge. Listening to recordings gives supervisors valuable insight into successful strategies for upfront collections. Conversations are available in Trace if needed for later reference in financial counseling, billing or collections.
Amount of Bad Debt
Bad debt is an indicator of the success of an organization’s collection efforts, making it a helpful revenue cycle metric. High bad debt ratios can be indicative of the effectiveness of the financial conversations that are taking place between staff members and self-pay patients, including walk-in or emergency room patients.
Training staff on how to have conversations with patients about their financial responsibility is key to keeping bad debt ratios down. With Trace, healthcare professionals can easily search audio encounters by keyword and view screen recordings to review team members’ navigation during a phone or face-to-face interaction with a patient.
Trace’s robust Quality Assurance program can help in several ways. With Trace, you’ll have access to scorecards to measure employee performance and digital dashboards to help track these scores over time. Scorecards allow administrators to customize questions, responses, and keywords – and even weigh different criteria. The result? More predictable performance, improved patient experience, and greater compliance with your institution’s set of policies and procedures. Even after you’ve seen an initial uptick in productivity and best practices adherence, you’ll continue to benefit from the data collected. You’ll have the ability to aggregate reports by individual, manager, team, or department, and leverage reports to aid in performance management going forward.
The Length of Time an Account Remains in Receivable Status
The number of days an account spends in receivable status is an indicator of the lag time an organization is experiencing regarding payment for services. Perhaps more importantly, it’s also a strong representation of how likely an organization is to ever see payment on account, particularly for self-pay patients.
According to the following articles published by Dun & Bradstreet, once an account has remained in receivable status for several months, the likelihood of full reimbursement drops significantly. Many organizations have found great success lowering their average accounts receivable days by using the Trace platform, including Lowell General Hospital of Massachusetts. Lowell General’s AR-day metric fell 16 percent from 42 days to 35 days after switching from a predominately manual, paper-based process for revenue cycle management to the Trace system.
Taking the Next Step toward Effective Revenue Cycle Management
Could your organization use a revenue cycle management revamp? Vyne Medical offers Trace software to meet the specific workflow needs of each and every hospital and the Refyne™ platform to automate denial workflows, simplify audit processes and drive more connected care – all from a unified platform.
With Vyne Medical’s software offerings, your institution can utilize all four key revenue cycle management metrics and more. Ready to learn more? Connect with the professionals at Vyne Medical today online, by phone at (800) 864-2378, or by email at [email protected].
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