With slim margins and high levels of competition, a healthy revenue cycle is essential to ASC success. What revenue cycle metrics and data points do ASC leaders need to track on a regular basis to maintain effective RCM processes?
Michael Orseno, director of Regent Revenue Cycle Management, and Ed Tschan, director of business development for Regent Revenue Cycle Management, identify RCM points to track on a daily, weekly, monthly and quarterly basis.
Daily
• Claim edits."Claim edits are different from denials," says Mr. Orseno. "Edits are set up with your clearinghouse, which will kick back claims before they go the payer. This prevents an incorrect claim from being sent to the payer and then being denied 30 to 45 days later."
• Patient charges. Review your center's schedule on a daily basis and ensure there are charges associated with each patient.
• Balancing. "Make sure you are balancing the daily bank deposits with what is posted in the system," says Mr. Orseno.
Weekly
• Month to date collections. Set monthly collection goals and monitor progress toward that goal each week. "If you have a $500,000 monthly collection goal and are not half way there at the midpoint of the month, start to investigate why you are behind," says Mr. Orseno. “This prevents a scramble for cash at month-end.”
• Unbilled cases. Monitor the number of unbilled cases and identify underlying issues if this number becomes too high.
Monthly
• Percent of accounts receivable days over 90 days
• Collections
• Denial percentage. Know your denial percentage. How many zero payments does the center experience?
• Charge lag. "This is defined as the number of days from date-of-service to claim submission," says Mr. Orseno.
• Statement lag. "Statement lag is defined as the date a balance becomes patient-responsibility to the date the statement is sent out," says Mr. Orseno.
• Unbilled cases
• Underpayments
• Bad debt write-offs
• Credit balances
• Clean claim percentage. Monitor the number of claims that are submitted without a claim audit as a percentage of total claims submitted.
Quarterly
• Gross collection rate. Gross collection rate is total reimbursement divided by total charges.
• Net collection rate. "How much of what you were supposed to collect did you collect?" says Mr. Orseno.
• Case costing.
• Net revenue per case.
Traditionally, ASC leaders will run reports to track each of these key performance indicators. Through third party reporting software, ASC leaders can monitor these metrics on a real-time dashboard. "You can set up these dashboards with your top KPIs, both financial and clinical," says Mr. Tschan. "Picture that dashboard as a central console. You can customize the parameters that make up these KPIs." ASC leaders are able to set revenue cycle performance standards and then watch over time if these standards are being met, exceeded or if the center falls short.
Defining the parameters of the revenue cycle KPIs should take several factors into consideration including industry trends and averages, payer mix and case mix. Consider using a free business office audit service that is offered by many companies in the industry. "Aside from identifying potential RCM deficiencies, these audits may also compare your facility to national averages and gold standards," says Mr. Orseno. "Many centers don't realize this option is available to them free of charge."
While industry benchmarks are essential to establishing meaningful KPIs, do not disregard internal resources. "It is important all key stakeholders at the center are involved," says Mr. Tschan. "These stakeholders will be leveraging this dashboard daily to make key decisions. There needs to be buy-in; it has a direct impact on the center's culture."