Revenue Cycle Metrics That Your Practice Must Track

If you want to generate high revenue cycle management (RCM), it is significant to track revenue cycle metrics in your medical practice. If you cannot use all the industry standards, try some of the metrics in your practice and then follow them to see improvements in your practice. 

Most medical billing companies determine their financial health conditions with cash flow analysis, which also signifies a revenue cycle perspective. RCM is an economic process that starts from patient registration, claims submission and account receivables, deductibles, collection of data. It ends on the final payment of the financial data. It permits practices to follow all the money focuses and guarantees a consistent progression of income streams. When medical procedures neglect to track revenue cycle metrics, sometimes you can lose your money without being familiar with it. Clinical Practices should follow key income cycle measurements, better controls, and devise an interaction with these markers. 

Medical billing key performance indicators (KPIs) keep track and monitor their financial health. Specific terms need to be understood for financial performance, such as Account receivables (A/R), net collection ratio, and clean claims ratio (CCR). There are more indicators for key- performance as follows:

1)  Days in receivables outstanding (DRO).

By Dividing the figure by your average daily cost, you can also measure your average daily amount by taking the previous three months’ payments and dividing them by 90.

You need this number as low as could be expected. 

The business standard DRO is 40-45 days. Moreover,  it is logical that this may not happen every time. By estimating this standard regularly, you can figure out what outside factors might add to your DRO, and you want to change your methodology based on metrics.

If your present techniques don’t empower or boost payments, you might need to incorporate more conformity and prizes on time. Assuming you’re not stressing the significance of convenient payments, then, at that point, those making the payments (customers and insurance agencies) won’t focus on paying you. 

2) Percentage of Receivables Over 120 Days Past Due

No medical practice wants to see overdue receivables. However, in nature, if our receivables are outstanding, the past 120 days are expected. For the calculation purpose, You just have to divide your total receivables by the total receivable amount of 120 days. 

The percentage of receivables over 120 days is 12 to 14% or less will be ideally suitable. If it is higher than the expected values, it should quickly address the past due gap for better results. 

By looking at current practices for gathering payments and sending past due charges, you can recognize where follow-ups and expanded communications can lower the cases of having receivables more than 120 days past due.

3) Net Collection Rate

Dividing payments determine the net collection ratio from insurance plans and patients by payments settled upon with safety insurance providers and patients. A net collection ratio of 100% is the best, but the standard is between 96-98%. To show up at rate esteem, it’s then essential to multiply that figure by 100. Use outsourcing medical billing for a better net collection rate with perfect medical coding services

4) Collections on Day of Service Rate

One of the main KPIs to determine the percent of collections finished on the day of service is preferably around 90%.

The collection of amounts, co-payments, deductibles, receivables, claims submission, and service fees help to minimize past unpaid charges. If you are unable to reach the achievable goals then, 

Organizing a firm financial strategy and communicating every determined monetary commitment before the visit can help your practice expand the percentage of collections finished upon the beginning of the service. 

5) Cash Collection Rate

There is no specific standard in cash collection, but it should be tracked and measured regularly. The amount in this period can compare to credit, debit, and compared with the old payments. The cash collection rate can be inconsistent so, it is better to be conscious of the patterns and inconsistencies. 

6) Clean claims ratio (CCR)

The first-pass ratio or clean claims ratio (CCR) is the percent of clean claims or claims paid at first accommodation. A clean claim has never been dismissed, doesn’t have a preventable denial, has not been recorded at least a time or two, and contains no mistakes. 

Since clean claims mean you’re getting compensated quicker, you will need to recognize your CCR, check time spent modifying denied claims, and pinpoint explanations behind the denied claims. Most practices’ CCR goes from 70% to 85%. Having a CCR above 90% or 95% mirrors a fruitful RCM methodology.

7)  Denial rate

Denied claims give the percentage of the medical claims which are prohibited. 

The claims denial rate gives practices a picture of how many of their claims are denied. The lean claim rate (CCR ) technique is used to decrease the denial rate. Outsourcing medical billing can reduce it. The coding and medical billing services should take care of it. 

By dividing the number of claims denied by the billing claims, you can check the calculations through these metrics if outsourcing medical billing services will reduce the denial rate.

What are the tips to boost Revenue Cycle Management (RCM)?

While following KPIs can provide you with a depiction of your financial practice. You will need to apply RCM best practices to work on medical coding and medical billing services. 

The following are a couple of tips to boost (RCM) to develop your clinical practice successfully:

Understand the requirements and needs of the payer.

In addition, to understanding the requirements of the payers,  medical practices are there to reduce denials by considering the following factors: 

  • Benefits and Eligibility criteria: Before the visit, you need to record eligibility and benefits, such as confirmation of primary, secondary, and tertiary insurance. On every visit, get a photocopy of your insurance cards from both sides for verification purposes. Moreover, obtain authorization if needed. 
  • Procedural codes: Procedure codes and modifiers are used for the services which are provided. Furthermore, make sure you have an authentic National Coverage Determination (NCD) description or code.
  •  Diagnosis codes: Diagnosis codes are dynamic, and they can change or delete. Stay updated with the new diagnosis codes, which can reduce errors and claim denials. It is beneficial for Revenue cycle management (RCM) as well.
  1. Avoid the claim denials.
  2. Reworking claims should be a preference.
  3. Take advantage of value-based reimbursement.
  4. Consider supervision, coordination, and management of patient care.

Get expert medical billing and medical coding services to benefit your revenue cycle management (RCM) and lead to success.

There can be a lot of consequences in in-house medical billing. Suppose, if your In-house medical billing team is trained and you are investing a hefty amount in the In-house medical billing services, you cannot earn much profit in your medical business. If any member leaves your company, your business will be at higher risk. Moreover, your company may lack the resources to maintain the higher results of the medical billing process. 

Cooperating with a specialist RCM management can assist with specific medical billing responsibilities and lift your revenue. A proficient medical biller and the staff members can contribute their experience in adjusting claims and insight into expense plans and administrative changes.

Outsourcing medical billing service in managing the accounts

Outsourcing Medical Practices with an experienced billing and coding staff should find fewer obstructions to meet the benchmarks. Moreover, clean claims will be sent on time with fewer errors and no more payment delays. UControl Billing is the best for outsourcing medical billing services. It is a customer-oriented medical company that will boost your revenue cycle management (RCM) as well. Contact them today for more information.