What is Hospital Revenue Cycle Management and Its Common Metrics?

– Healthcare Revenue Cycle Management Software

How Can Revenue Cycle Efficiency Be Optimized Using Healthcare Revenue Cycle Management Software

What is Hospital Revenue Cycle Management and Its Common Metrics?

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A hospital´s revenue cycle management (RCM) is able to monitor the efficiency and financial stability of a healthcare facility ranging from the time billing occurs to the point of workflows in the clinical setting.

Because of the RCM program, it has an ability to affect all aspects of a hospital setting, the healthcare providers can observe metrics that have a financial impact on a facility.

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Regardless of that, in order to measure the revenue cycle management within a hospital depends on the key performance indicators that the hospital implements. With a KPI, it is a measurement used to assess the performance of goals set by the business.

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Comparing is a key KPI feature. Instead of having data collected and disclosed, a KPI opens a point of performance where the hospital then collects the necessary data from within to have the performance compared side by side with the KPI.

RCM KPIs and Critical Data Points

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A KPI in RCM is helpful with gaps being identified as well as decreasing the risk of compliance issues and to make sure that all charges are correct. However, the KPIs for revenue cycle will change and are determined by the necessity and objectives of the hospital. Below we have 5 KPIs that are able to accomplish a good measurement of revenue cycle management.

Collecting POS Transactions

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By collecting POS transactions, you are able to decide if your POS is effective. The POS KPI is also able to monitor collections and the receipt of payments prior to any services being offered for a maximum of seven days following care. In order to determine the KPIs worth, the amount of the POS is divided by the amount of collected cash.

The Rate of Clean Claim

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The rate of clean claim is designed to discover any issues with efficiency relating to any submissions for claim and their processing. For claims that are rejected, the time it takes to make corrections may take some time and may include additional fees. When time is being spent resolving a claim, the amount of time to receive payment will also take longer.

Incurring Bad Debt

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Having an amount of Bad Debt is reflective of collection attempts. It may additionally show how effective counseling can be during pre-service. It needs to be understood that any lost debt is not considered. Having a high amount of Bad Debt can be seen as being inefficient in any revenue area, such as with financial counseling or a POS collection.

Time Spent within Account Receivables

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The amount of time spent within account receivables will show the amount of time it takes for all services to become paid in full. This will help when obtaining successful service payments, and the amount of good management of account receivables.

The Net Collection Rate

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Known as either the adjusted collection rate or the net collection rate, it measures how effective collection can be for reimbursements. It is considered a percentage of what becomes reimbursed and established upon the obligations of the practice.

How Does RCM Software Optimize Each Stage of the Revenue Cycle?

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It may seem straightforward, however many measures exist, which need to be considered so that payments can be received. Because if an error occurs or a duplicate in information or data happens, then the amount of revenue may be decreased and thus causing financial problems for the healthcare facility.

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Performing effective RCM needs to play a crucial part in the successfulness of a healthcare setting. Here are 5 benefits of having effective RCM:

1. Flow of Cash is Maximized and Workflow is Optimized 2. Patient Interactions Are Enhanced by Experiences 3. Improved Claim Submissions

Flow of Cash is Maximized and Workflow is Optimized

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As a process is automated, efficiency can be achieved, which can make payments made without delay. This can also decrease the amount of errors so that the flow of cash can continue. For example, if a system for electronic health records or medical billing software is utilized, you are able to make the workflow easier. When systems for processing payments, billing, coding, and scheduling are improved, your facility will obtain an improved system that is both efficient and effective and will save time for other tasks that are equally important.

Patient Interactions Are Enhanced by Experiences

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Having an RCM that is managed by skilled individuals and advanced technology can add to a great system that can decrease errors seen among coding and billing. This will be achieved by having patient experiences enhanced by the interactions. Overall, the patient will experience less anxiety and thus more satisfied patients.

Improved Claim Submissions

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When claims are submitted efficiently, the chance for denial will be decreased. Having RCM healthcare services that is optimized will allow the system of a facility to become accurate. Being more accurate will lead to mistakes being eliminated. When the coding is done right, the chance for denial will also become eliminated and the facility will obtain a faster payment.

Conclusion

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When it boils down to it, having an RCM for healthcare makes the entire revenue cycle more efficient and optimized for a healthcare facility. It can improve cash flow, improve patient interactions, and make the claim process more efficient.

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