What are the key performance indicators for measuring RCM policy outcomes?

DAR is the average number of days it takes for your practice to receive payment for a claim. High days in A/R indicate that you experience delays in getting payment for the services you have rendered, which will negatively impact your cash flow. How to Calculate Days in A/R To calculate your days in A/R, take the total A/R and divide it by the average charges per day over the selected period (usually average last 3 months daily charge average is considered)

The comment by the other contributor is inaccurate. This is a problem we have in revenue cycle. Those who’ve never worked on the front lines and have never been mentored by an experienced leader speaking on things they don’t understand. Your A/R days have more to do with your EHR setup, how soon claims get to the payer, and how clean those claims are when they hit the payer system.

Actually I disagree with this calculation as a means to determine DAR (Days in Accounts Receivable). Firstly, nowhere do I see the number of days being counted! To get an accurate count to use as a KRI the receivables database should be calculating the number of days from when a claim, patient bill, or client statement is generated to when that receivable is paid/processed/closed.

A feedback loop should be implemented in the SOP so that as denials are are worked and corrected successfully, a feedback note should be placed into the up front process so that the same denials do not continue to occur.

I agree that an effective feedback loop on the types of denials is imperative to minimize denial rates. Depending on the rate of the denial, if it’s for something that can be caught further upstream or a requirement in the workflow those are easy fixes compared to the time and resources it will take to research and manual correct after the claim has been submitted.

To be very clear, the average daily charges is a reflection of the days. For example, 3 months charges divided by days in that time period = average daily revenue. Then your total outstanding AR divided by the average daily revenue= the number of days outstanding. HFMA should be your reference benchmark to the calculation formula. There are small nuances between organizations- most use 90 day time periods, a few will use a year, fewer will use 60 days…but the method should always be outstanding accounts receivable divided by average daily charges.

Several strategies to reduce denial rates and enhance revenue cycle performance are by performing RCA, Enhanced Documentation, Claim Scrubbing, Payer Communication, Monitoring Denial Management workflow, Technology integration, Providing Education and Support. By implementing these strategies and fostering a proactive approach to denial management, healthcare organizations can effectively reduce denial rates, improve revenue cycle performance, and achieve sustainable financial success.

The Clean Claim Rate (CCR) in Revenue Cycle Management (RCM) refers to the percentage of claims that are processed and paid by insurance payers without requiring additional documentation, corrections, or follow-up. Calculating the Clean Claim Rate involves dividing the number of clean claims processed by the total number of claims submitted.

Some organizations often work in a "fixing mode" instead of a "proactive approach". What I mean is that we should look for the root cause of the "issue" and correct it in the front end. Challenges are different in each organization, work one by one.

The most accurate calculation would be payments matched back to their original charges in a type of waterfall report. Sometimes referred to as a “net matched collection rate”. That being said, very stable organizations that have minimal seasonality can usually get by on “unmatched” numbers: payments received in January compared to charges created in January, for example.

The Net Collection Rate measures the percentage of revenue collected from services rendered after accounting for adjustments, contractual allowances, and write-offs. It gives a clear picture of how effectively the organization is converting its billed charges into actual revenue. A high Net Collection Rate indicates strong revenue performance and efficient collection processes.

A Step-by-Step approach to Measure RCM Policy Outcomes as followed by our Medical billing team Claims Submission Efficiency: Ensure claims are submitted accurately & promptly. Implement automated systems to reduce errors and accelerate the reimbursement process. Denial Rate Analysis: Investigate, address the root causes of claim denials. Establish a systematic approach to minimize denials & enhance revenue flow. Cash Collection Metrics: Monitor cash flow & collection rates. Set realistic targets for timely payments and implement strategies to expedite patient payments. Patient Satisfaction Scores: Integrate patient feedback into your metrics. Happy patients are more likely to settle bills promptly, positively impacting revenue.