Revenue cycle management or RCM, may superficially be regarded simply as a way to keep track of payments, claims, reimbursements and other financial transactions that are normal for any clinic or hospital. But while good RCM practices do serve this function, it’s possible for improved, more attentive RCM systems to actually increase operational efficiency. This is something that is always a concern as the requirements of MACRA practices move into the industry, and organizations wrestle with maintaining HIPAA compliance in an increasingly complex business.
But RCM improvements can also affect your bottom line in a good way. Through the proper analysis of your RCM data, you can improve your profitability, and it’s not as difficult as you might imagine.
Your Operational Data Is Business Data
As with a typical business, your hospital operations, including financial data, can be an important KPI, or key performance indicator. This is the first step in boosting your profitability. You and your staff need to narrow down which data are actually KPIs for your organization that you can measure, track over a historical period, and ultimately use as a basis for improving operations.
With proper attention to longstanding trends that are visible in the data, you may find areas, where you didn’t realize financial inefficiencies were impacting your revenue. It’s usually the same old case of “little things add up in the long run,” but in the case of medical care, these numbers can grow to significant figures over a long enough timeline. There are three areas that hospitals should be looking at as KPIs that can be boosted.
A/R is a fairly large KPI to look at, which is why this area can be divided into smaller sections with their own indicators. However, on the whole, A/R is always an important area to start analyzing for improvements and optimization.
A/R outsourced to third party companies that aren’t necessarily considered bad debt is one way to monitor KPIs. Associations with patient-specific third party settlements are another. Critical access settlements and payments are another area to assign and monitor KPIs within your A/R.
Bad debt may be an unpleasant prospect to think about for profitability, but ignoring it can only lead to more losses. Making bad debt a KPI is as much about monitoring losses and inefficiencies in an effort to better understand the causes, minimize them, and keep bad debt under control or, if possible start wiping it out.
The timing of bad debt can also be an important KPI. By understanding just how much bad debt may occur on a regular basis during a particular period, this allows for better planning with reimbursements on lower income and uninsured patients. Handling the timing of these transactions can help mitigate bad debt.
How claims are handled and how quickly they are processed is another important KPI. Close analysis of claims processing can often yield many areas where you may have strengths you didn’t realize, or even see opportunities to streamline the claims process and make it more efficient.
By keeping account of these various metrics, you give yourself more information on which to base your financial decisions. The better and more comprehensive the information, the more accurate and effective your decisions will be.
Want to know how Rev-Ignition can help in improving your financial processes? Don’t let paperwork and payment be a bottleneck in your operation. Let us integrate a tailored RCM solution for your problems today, contact us at firstname.lastname@example.org or (844) 297-9944