Today companies ignore the distractions and loopholes in their revenue cycle. Identifying and realizing that your revenue cycle needs help and modifications is essential. A poorly performing revenue cycle always gives many indications. Healthcare providers need to just understand and realize the indication. Ignoring early signs of a poorly performing revenue cycle can be risky and can shake a company from the core.
Relying on others can be very challenging for practitioners and healthcare providers to know whether they are using accurate practices for revenue cycle management. A good idea for managing the revenue cycle accurately is to hire an outside consultant for independent review and audit. These audits should be performed annually or sometimes more frequently to put everything on track. A consultant can be a helping hand during this time. They can not only assure the identification of loopholes and gaps in your revenue cycle but can also train or suggest ways to mug up.
It is a mandatory practice to constantly monitor the key performance indicators in the practice, below are some important suggestions about how to initiate the practice. Instead of running fast, start with small steps. Start with small KPI sampling until you are familiar with how to use data and how it can be managed. Here are some of the key performance indicators that you should consider:
A/R days are the foundation of your revenue cycle. A/R days help identify how long your practice takes to collect outstanding bills from customers. The objective of this KPI for cash collection as a percentage of net patient services revenue is to assess an organization’s endeavor to transfer net patient services revenue to cash.
Keep a track of your denial rate and compare it with past years. Analyze what you find. Is it going down or taking new heights of growth? The growth report is an indicator that you may have a large trouble. This should be tracked monthly and by provider or provider types to find out any opportunities and to lower the risk. Estimate the number of denied claims and brainstorm to find out the reason for the high rate of denials.
Net collection ratio
This is the ratio of total reimbursement collected out of the total allowed amount. This value represents the efficiency of the revenue cycle. It is the creative indicator of collections' success. Net collections represent what your practice logically can expect to receive in reimbursement. It encircles, denial rates, unreimbursed claims, and other factors affecting the overall revenue.
This is the percentage of uncollected patient accounts to the total AR. This shows the organization how well they are performing at collecting patient balances and copays.