When you enter a clinic or hospital, the foremost thing on your mind is probably getting treated, right? But in the background, there is an entire ecosystem that keeps the clinic or hospital functioning, and that is the revenue cycle. healthcare institutes have to accomplish what is referred to as revenue cycle KPIs in order make certain that all actions are performed in order to optimize the efficiency of the entire system.
What Are Revenue Cycle KPIs?
KPIs or Key Performance Indicators are operational checks, if we can call them, for the business side of the revenues in healthcare services. They tell the clinics, hospitals, and even some billing companies whether services rendered are being paid for, and if those payments are being received within an appropriate period.
These KPIs are related to healthcare revenue cycle KPIs, which demonstrate the services most critical to the collection of payments from insurance companies, patients, and other defined sources.
The following is a list of metrics that are most frequently cited:
- Days in Accounts Receivable (AR): How long does it take for the payment to process?
- Claims have to be adjusted too often: What percentage of claims need to be adjusted after being submitted?
- Denial Rate: Percentage of claims to which the insurance company responds with a denial.
- Collection Rate: What portion of the expected revenue comes in?
Such numbers may seem shocking but in reality, they are useful. They allow caregivers to concentrate on patient care while others ensure that hospital operations, including payment processing, are done correctly, and $100’s worth of errors in paperwork don’t happen.
Why Do Revenue Cycle KPIs Matter?
You devote yourself to taking care of patients only to have to deal with payments that are not being processed or, even worse, receiving denied payments months later. It’s not just annoying, but it can put the hospital’s ability to actually function in serious jeopardy.
That is precisely the reason why the revenue cycle management KPIs need to be monitored closely. These points show whether overarching challenges which need to be fixed still exist and, in fact, where processes have begun to go wrong. Here is an example: a particular clinic has a problem with a runaway high denial rate for insurance claims. Such a clinic has a chance to assess the pre-claim denial workflows and resolve them very rapidly.
The Role of Outsourced Medical Billing
Most clinics and hospitals are not able to manage their medical billing departments. It takes time, expertise, and sophisticated systems to administer the revenue cycle. This is where outsourced medical billing is useful.
Think of it like hiring an expert accountant to manage your taxation. An outsourced billing company takes care of everything from procedure coding, claims submission to insurance companies, payment tracking, and even follow-up on aged receivables.
How to Use KPIs to Make Better Decisions
We all know numbers have significant value. But only as long as they are handy. Monitoring healthcare revenue cycle KPIs offers strategic value and more timely decisions.
For example,
- “In AR” days should be fewer; if not, then billing acceleration efforts should be taken.
- “We Clean Claim Rate” is low; employee training or better software needs to be provided.
- Claim denial rates are increasing, claims submission protocols need fresh eyes.
Clinics can shift strategies to be proactive with this information instead of waiting till problems escalate. That is similar to treating a sneeze before it escalates into a flu.
Final Thoughts
Healthcare isn’t just about medicine, it’s about how the system is organized to support all the people that it is supposed to help. Revenue cycle KPIs give us a snapshot of the system. They help healthcare providers stay organized, so they can stay open and focus on what they do best, taking care of people.
By being intentional in their implementation of revenue cycle management KPIs or by partnering with an outsourced medical billing team, financial oversight in the healthcare industry can positively impact the health of all our futures.
So, the next time you see a doctor and everything seems to go smoothly, remember all the hard work (and KPIs) that go into making that happen.