Measure your Revenue Cycle

Best Practices require Monitoring your revenue cycle, which allows you
to compare key billing indicators (KBI) from month to month and year to year. This allows you to gain insight by measuring and comparing your practice against industry and specialty standards.

Analysis of key performance indicators will help you find opportunities to improve
business efficiency, improve processes and uncover problems with payers.

Metrics should be reviewed on a consistent basis, at minimum, every 30 days. By analyzing these metrics you’ll see a clearer picture of how fast you are getting paid, who’s not paying, and why. With that knowledge, you can improve processes to ensure a healthy A/R.

Key RCM Indicators

  • Monthly charges, payments, and adjustments compared to averages and historical data
  • Estimated contractual reimbursement compared to actual payment
  • Charge-entry lag times
  • Denial percentage
  • Clean-claim-rate percentage
  • A/R aging by date of service
  • Gross-collection percentage
  • Net-collection percentage
  • Days in A/R

Are you tracking these Important A/R formulas? :
Collected insurance payment/Estimated contractual reimbursement
Net A/R = ending A/R – bad debt A/R – unapplied
Charges per day = charges/days in month
Payments per day = payments/days in month
Gross-collection % = (payments/charges) *-1
Adjusted-collection % = payments/(charges + adjustments) *-1

The number of days a balance sits in AR is
an important benchmark. This metric helps
you understand practice cash flow and
identify problem accounts. It’s not difficult to
calculate A/R days. Simply calculate the
total current receivables after credits, divided
by average daily charge amount.

What are your charge-lag and
processing times?
Lag time refers to the period between the
date of service and claim submission.
Since a large part of RCM is related to days
in A/R, a significant lag time can negatively
impact the A/R-days metric.

Processing time is the period
between the date of service and the date
the payer pays the claim. Payer processing
time is the period from patient payment
receipt to provider payment.