In this post, Marie Debs and Luanne Yeley, consulting executives with Halley Consulting Group, offer insight on effective approaches to optimize revenue cycle management for physician networks.
Do your revenue cycle performance metrics fall outside of best practice?
Are you reviewing these performance measures from your physician practices on a monthly basis?
As medical networks face greater cost-containment pressures, along with the risk of denials in the face of the migration to ICD-10, physician networks must adopt more effective approaches to optimizing revenue cycle management across the enterprise.
One approach, which we strongly recommend, is to check your financial temperature at least annually—if not quarterly—by contracting with an outside resource to perform a mini audit of your receivables. When performing a mini audit, analysts begin by calculating metrics and key indicators such as:
- Days in accounts receivable
- Percentage of A/R more than 90 days
- Gross collection percentage
- Adjusted fee-for-service collection percentage
- Claims denial rate
- Percentage of credit balances more than 90 days
- Point-of-service copay collection rate
- Charge entry lag
- Bad debt percentage
After the initial calculations, the analysts review critical areas of process and compare them to best-practice targets and workflows. Some also provide a detailed evaluation with recommendations and strategies for addressing issues brought to light during the data review.
The mini audit is a fast and easy way to use metrics to track performance, highlight areas of concern and identify opportunities for improvement. Although the metrics are linked to revenue cycle components, the results can be very telling regarding the health of your practice in many areas. For instance, if your charge entry lag is five days, you need to identify why it’s taking so long. Is it a billing office backlog? Or is it a governance issue (e.g., physicians aren’t completing their charting in a timely manner)? Making these connections will help your team focus on the root of the issue to maximize the value of your receivables.
When you want real answers about financial performance, don’t keep sticking your toe in the water to check the temperature. Jump in! Your greatest opportunity for performance progress may be submerged in your data.
If you would like Halley Consulting Group's assistance in conducting a mini audit, please contact us at 614-899-7325. You can also find more information about our Revenue Cycle Evaluations here.