Revenue Cycle News_KPIs

Breaking Down the Top 5 Healthcare Revenue Cycle KPIs

Excerpted from a story by Jacqueline LaPointe in RevCycle Intelligence, Sept. 2018

To effectively track healthcare revenue cycle performance, provider organizations should develop key performance indicators (KPIs), advised Sandra Wolfskill, Director of Healthcare Finance Policy and Revenue Cycle MAP at the Healthcare Financial Management Association (HFMA).

“The value that key performance indicators bring to the table is the definition of standard and what you want from it is to be something that allows it to be comparable,” she said.

“When I worked in a hospital, I would look at my financial statements every month and I would look at my days in A/R,” she continued. “I would look at my cash on hand and a bunch of indicators compared to where I was last month, last quarter, or last year. That tells me what I am doing.”

While understanding healthcare revenue cycle performance is key to improving, industry-standard KPIs, such as HFMA’s Measure, Apply, Perform (MAP) Keys, also allow hospital and practice leaders to compare their performance against their peers.

“Metrics are more month to month to month and key performance indicators, or MAP keys, are strategic and allow me that ability to compare and find out, for example, that the high-performing organizations in today’s world have net days in A/R between about 28 and 36, whereas net days in A/R of 50 used to be considered a great number.”

By developing KPIs and comparing performance, hospital and practice leaders can better allocate resources and improve revenue cycle efficiency, Wolfskill stated.

Provider organizations should look to the MAP Keys to start tracking five main KPIs, she suggested. The KPIs are net days in accounts receivable (A/R), cash collection as a percentage of net patient services revenue, claim denial rate, final denial write-off as a percentage of net patient service revenue, and cost to collect.

From hospitals to physicians and ambulatory surgical centers, the five KPIs apply to a wide range of provider organizations, she noted. By starting with basic healthcare revenue cycle performance KPIs can jump start an organization’s journey to financial success, Wolfskill explained.

Read the rest of this story at RevCycle Intelligence.

 

 

“By developing KPIs and comparing performance, hospital and practice leaders can better allocate resources and improve revenue cycle efficiency.”