The world of physician reimbursement is getting more complicated every year.
Increasing administrative costs, regulatory constraints, aging patient population requiring more advanced services, and rising frequency and intensity of claim audits by payers significantly complicate the providers’ ability to collect due reimbursement for the services rendered.
It is no surprise that the studies show that as much as 15 cents of every healthcare dollar is spent on inefficiencies in revenue cycle management.
While most practices understand that tracking patient care episodes and associated claims, communicating with insurance companies, and monitoring cash flow are essential to ensuring profitability, it is still surprising to see that many practices do not review their key financial indicators regularly.
The following seven revenue cycle management reporting metrics will help you assess whether your operations are running efficiently and whether your practice is receiving the highest reimbursement possible.
#1. Rolling Accounts Receivable (A/R) By Aging Bucket
Get in the habit of knowing your outstanding A/R on a daily basis. Regularly reviewing A/R at 0-30, 30-60, 60-90, 90-120 days will help you identify problems that negatively affect your cash flow and devise a course of action to address them.
A goal is keep your A/R in the 0-30 day range as much as possible to minimize the possibility of losing appeals rights and missing timely filing deadlines.
There are a number of reasons to have outstanding AR beyond 30-60 day. Insurance denials are probably among the most prevalent ones.
They may include the following:
#2. Rolling A/R By Payer/Provider
In addition to running the daily AR reports, you should also monitor AR by payers, as well as by providers. If you practice in multiple facilities, you should review each of them separately as well.
Monitoring this data on a granular level allows you to determine if payments to specific providers, by specific payers, and/or in specific facilities have stopped. Finding this information timely will help you correct the problem and prevent it from reoccurring. Most facilities have teams of analysts in place to ensure that there aren’t any shortfalls in this area. This is how to track monies due from secondary and tertiary commercial payers as well as the patient responsibility portion of your claims.
#3. Daily Medicare Payments
In the event Medicare stops paying, you must determine the exact date it occurred. This will help you identify and address the issue, as well as estimate your back pay and ensure that it is received timely.
#4. Billed Claims
This is another report that should be run daily to verify that your systems are running properly. Many groups have sophisticated software that handles claim submission; however it is advisable to audit your software performance regularly to make sure daily claim submission metrics are within the expected range.
#5. Days Sales Outstanding (DSO) & Days In AR
Calculated by average daily payments divided into your AR total. This is the metric that determines your cash flow if you stopped billing today. The goal is to have this measure as small as possible. This number will also be affected by your payer mix. Because Medicaid and Medicare pay claims relatively quickly, the more claims to those payers, the lower your Days in AR should be.
Recommended as a monthly report, days sales outstanding will help you understand how many days it takes you to get paid. As a measure of accounts receivable compared to sales, it is also a strong performance measurement of your entire RCM process.
DSO depends on several factors including revenue cycle process, lack of technical coding or emergency medicine billing, and payer mix. While a monthly review of your DSO will not provide you with a complete view of your business, it is a simple report to run and allows you to get a good overview of where your receivables are and the health of your RCM processes.
#6. Total A/R Review By Quarter
Looking at metrics on a daily or even monthly basis may not provide an adequate dataset for sound financial decision-making. This is why it is recommended to run A/R reports quarterly as well.
Quarterly AR monitoring will allow you to analyze your collection patterns, evaluate how your staff or billing department is addressing them, and determine whether you are leaving money on the table.
#7. Year-End Review Of All Above-Mentioned Reports
Year-end reviews often serve as performance evaluations. By basing these reviews on the aforementioned reports and your goals, you will be able to determine if you have succeeded in making beneficial changes or if your practice is still not running as efficiently as it should.
Reporting Metrics And Your Bottom Line
The financial goals of every healthcare business are similar: get paid faster; generate more revenue; and mitigate compliance risk.
Running these seven reports are just a few ways you can delve into metrics that define the health of your practice. Of course, the more sophisticated you get with your reporting, the more detailed analyses you’ll be able to perform. The decision-making based on solid empirical data, combined with good clinical practice, will lead your group to desired RCM outcomes.
However, more sophisticated reporting also requires a more sophisticated staff, which is why outsourcing revenue cycle management to the right partner is an excellent option. The experts at DuvaSawko specialize in billing and coding exclusively for Emergency Medicine groups. Ourdedicated account management team provides not only these seven reports, but also a multitude of other monthly in-depth reports to our clients, along with the most up to date insight into ever-changing industry trends. If your EM group is looking for a billing and coding team that cares about your growth as much as you do, learn more about DuvaSawko’s medical coding and billing methodology with its tailored approach to RCM designed to meet your specific revenue goals.
Contact us today to learn more.
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