The Top Revenue Cycle KPIs You Should Be Tracking
Is your medical facility hitting its key metrics? Without an idea of what’s going on with your office regarding billing and revenue, achieving your financial goals may be a struggle. If your current financial strategy isn’t up to par, consider readjusting your focus to tracking key performance indicators for medical billing.
Why Tracking Your Medical Billing KPIs Is Important
Medical billing and revenue cycle management (RCM) are essential to any healthcare facility’s operations. Without an established process to accurately track patient billing, collect payments, and ensure compliance with coding and other regulatory requirements, the facility will struggle to perform at its fullest potential. To maintain financial success, healthcare facilities must understand the essential KPIs they should track to optimize their business operations.
KPIs provide a way to measure the performance of the RCM and medical billing processes, giving medical centers a better understanding of their performance. By tracking KPIs, facilities can identify areas with room for improvement and adjust their strategies. Additionally, tracking KPIs allows facilities to compare their performance against industry standards so that they can benchmark themselves against other similar organizations.
10 Revenue Cycle KPIs To Help You Reach Your Medical Billing Metrics
1. Bad Debt Rate
This KPI measures the rate of accounts receivable (AR) that is uncollectible. Tracking this KPI can help identify potential accounts receivable issues, which can lead to an increase in bad debt and a decrease in revenue as claims are not paid.
Areas that may contribute to an increase in bad debt include collection issues, changes in customer relationship management (CRM) changes, or claims denial. Tracking this KPI every month will allow you to identify any changes that may be occurring within your business.
2. Resolve Rate
This metric shows how quickly you are resolving claims and getting paid. By monitoring this KPI, you identify any areas where there may be delays in payment or potential problems with the billing process. It’s also important to watch this metric over time so that you can spot any trends that might indicate a need for improvement.
3. Denial Rate
Denials measure the number of claims that have been denied by third-party payers. If a high percentage of claims are being denied, it could indicate that the facility needs to review its coding and billing processes to reduce the number of denials.
4. Days in Accounts Receivable
This KPI measures the average number of days it takes for a facility to collect payments from its patients and third-party payers. Keeping track of this KPI is important because it can provide insight into the efficiency of the facility’s billing and collection processes. If the number of days in accounts receivable is high, reviews should be made to improve the facility’s cash flow.
5. Gross & Net Collection Rate
Gross collection and net collection rates are great examples of a KPI for your billing department to keep track of. Gross collection rates are calculated by dividing money from payments by the billed charges, which is helpful in determining future collections and drawing comparisons to your organization’s cash flow. This rate is often affected by fluctuating fees, patient population, and insurance providers.
On the other hand, the net collection rate is essential for determining how much revenue you’re collecting on bills you are eligible to be paid for. This is calculated by dividing payments by all allowed charges.
A denied claim shouldn’t disrupt your operations. Meet insurance carrier requirements with medical billing follow-ups.
6. Time to Claim Submission
This KPI measures the time it takes for a claim to be submitted after it is created. Tracking this KPI can help identify any areas where there may be delays in submitting claims, which could lead to a decrease in revenue as claims are not paid on time or at all if they are not submitted.
7. Payment Accuracy
This KPI measures the accuracy of payments received from payers. Tracking this KPI can help identify areas where there may be errors in payments received, whether through one-on-one sessions with payers or by analyzing error codes provided. Such errors could lead to a loss of revenue and other fraud if not identified early on.
8. Operating Margin
If you make a habit out of tracking your key performance indicators, you set your facility up for immense success. Systemically tracking the inflow and outflow of money and where specific trends develop is critical to obtaining tangible and relevant statistics.
9. Average and Median Price Per Accession
The average price per accession is a KPI metric that healthcare facilities can use to measure how much they charge for each test or procedure. This metric helps facilities understand their services’ overall profitability and identify areas where prices may be too high or too low. Price per accession is perfect for predicting future costs, commissions, and profits for running your medical practice. Plus, it helps identify any billing inaccuracies, which could lead to a decrease in revenue as claims are denied or unpaid.
10. Month-Over-Month Revenue
This KPI is essential for tracking the facility’s revenue growth over time. It can help identify any potential problems with the billing and collections process and can be used to set goals for future revenue.
Medical billing KPIs are an essential part of tracking and managing the profitability of medical practices. By monitoring these metrics, healthcare facilities can more accurately predict future costs, commissions, and profits related to running their business. Plus, it helps identify any inaccuracies in billing that could lead to a decrease in revenue as claims are denied or unpaid.
Let Horizon Healthcare RCM Transform Your Billing and Coding System
For healthcare facilities looking to track their KPIs and optimize their medical billing operations, outsourcing RCM services can be an effective solution. Horizon Healthcare RCM helps medical billing departments manage their revenue cycle activities and track key performance metrics. Our team of experienced professionals is well-versed in the complexities of medical billing and can help you monitor your KPIs to ensure that your billing operations are running smoothly.
Simplify your medical revenue cycle management process and contact us today.