Healthcare revenue cycle consists of various important steps that are designed to help the healthcare provider receive payments from their patients. An efficient revenue cycle management will help the medical service providers secure the payment dues faster. There are certain key performance indicators that can be used to measure the efficiency of the healthcare revenue cycle. These KPIs are as follows:
- Net Amount of Account Receivable Days
The patient payments which are overdue end up in the A/R. The efficiency of the entire healthcare revenue cycle process can be known by measuring the net number of days the patient accounts stay in the A/R. The lower the net amount of account receivable days, the higher the efficiency of the RCM cycle. This is because, if a patient account stays longer in the A/R, it is a sign that they are taking longer to pay off their dues. This would increase the risks of these accounts getting lost or forgotten. By keeping track of these A/R accounts and reminding the patients of their payment dues, the chances of such risks can be prevented.
- Rate of Clean Claims
This is a KPI that indicates the quality of the revenue cycle management. Claims are denied due to manual inaccuracies such as coding errors, typos, outdated insurance policy etc. If the primary reason for these denied claims are not discovered, it can lead to a pile up of denied claims resulting in revenue losses for the healthcare provider. A higher rate of clean claims is a sign of high accuracy of the providers RCM process. When causes of all recurring errors are weeded out it is possible to improv the health of healthcare revenue cycle.
- Turnaround Time
The time taken for the entire payment to be received from the patient’s side is called turnaround time. The shorter the turnaround time, the healthier the financial stability of the healthcare provider. For most providers, the turnaround time can take a hit when there are errors in submission. Quicker turnaround time is a sign of accurate healthcare revenue cycle which results in timely revenue collections.
- Gaps Between the Date of Medical Service and Date of Filing
When claims are filed, some of them are denied due to manual errors such as inaccurate information, missing data, outdated information and such. Sometimes, the insurance company may also be at fault which would result in denied claims. By the time the fault is identified and resolved, it can be too long, causing a delay in reimbursement. Shorter gap or few claim denials would be a positive key performance indicator of the healthcare revenue cycle.
In addition to the above KPIs, conducting regular quality checks also enhances the efficiency of the RCM cycle. Therefore, ensuring an effective healthcare revenue cycle will help medical service providers to maximize their revenues.
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