In our recent webinar, “The Revenue Engine: How Investing in The Right Revenue Cycle Talent Fuels Top-Line Growth,” we discussed how revenue cycle management teams can help healthcare organizations maintain profitability. There was one specific part of the presentation that we wanted to recap: the key metrics to gauge the success of your team.
Joe Abreu, VP and Head of Revenue Cycle at Proud Moments ABA, shared both industry-standard metrics and metrics that he personally uses to measure the health of a revenue cycle management team.
Industry Standards for Measuring the Success of a Revenue Cycle Management Team
- Total Revenue from Claims – This is metric number one. Continuously tracking it through the year helps your team project whether you will meet annual revenue goals. Knowing exactly where you reside at all times can help you pivot and re-strategize if you appear to be falling behind.
- Net Collection Rate – Defined as the percentage of payments received out of the total amount contractually owed by insurers, net collection rate can be analyzed daily, weekly, or monthly. Regardless, you should always know your current rate and make sure you are tracking at or above the industry benchmark, which, according to MGMA, is 95%.
- Days in Accounts Receivable – Anything over 90 days is alarming and should be thoroughly reviewed. Are you receiving payment well before 90 days from all insurers—in and out of network—and in every location? If not, are prepayment reviews holding up the process? Accounts receivable over 90 days should never exceed 10% of total claims.
Abreu’s Additional Standards for Measuring the Success of a Revenue Cycle Management Team
- Percentage of Denials – In other words, percentage of claim rejections. What is the current percentage? How is it trending month-over-month? Improving this metric depends largely on figuring out the causes of the denials and simply working the claims. Proud Moments ABA’s revenue cycle employees work claims at least once every 30 days.
- Total Cost to Collect – Knowing the amount of claims revenue to collect keeps your entire team focused on the end goal: maximizing revenue. The total cost can create a sense of urgency and, along with your net collection rate, help you predict how much revenue you should be producing 30, 60, and 90 days out.
- Net Profit of Revenue Cycle Management Team – Your team has a budget and revenue goals, which hopefully translates to profit. Abreu mentioned that the least expensive approach isn’t always the safest approach. Oftentimes, an investment in staffing and technology can help you find the right talent and tools to reduce risks, maximize revenue, and yield a healthy net profit.
As a revenue cycle management leader, are you using these metrics to measure your team’s health? Is your team maximizing total revenue from claims? It’s important to not only measure performance but to find the experienced, flexible talent you need to respond to demand and help your organization maintain profitability.
To learn more about gauging the health of your team and fueling top-line growth, watch our webinar on-demand.
