Delivering high-quality care while maintaining profitability is the overarching objective of any outpatient facility. We’ve been talking a lot about using KPIs (key performance indicators) to determine the health of your revenue cycle – things like the age of accounts receivable and the number of days to bill. It’s one thing to know where your business stands in terms of profitability, but actually taking steps to optimize your revenue cycle management can take your facility’s financial goals to another level.
To help you get there, we’ve come up with another way to think about the KPI acronym for turning your metrics into action: Know, Plan, Implement. Let’s use one specific performance indicator – denials – to show how these three steps can drive financial change.
Know
So you’ve decided the key performance indicators you’re going to measure, you’ve figured out how to track them effectively, you’ve collected the data, and you’ve analyzed it. Good job! That was a lot of work, but you’re not quite done yet. The goal is to collect 100 percent of net revenue, but after analyzing the data, let’s say you learn that you’re only at 94 percent. Dig deep and you may find, for example, that a majority of that missing 6 percent is stuck in denials due to coding errors. It may seem like a small percentage, but it can represent tens of thousands of dollars in lost revenue over time. Bad news: You’re losing money. Good news: now you know what money you’re missing and why you’re missing it, which is the first step in taking action.
Plan
Once you know where your missing revenue is, you can develop a plan to get to the root of the problem and figure out how to fix it. With regard to coding, we know there are a few issues that can cause errors:
- Insufficient documentation
- Changes to insurer submission rules
- Incorrect charge capture
- Human error
What’s next? Knowing the possibilities, you’ll need to pull together your revenue cycle team to discuss what is going wrong, identify the specific reason behind the errors, ensure each person in the chain understands who is responsible for doing what, determine if the right staff is assigned to the right job, and then develop a method to correct the problem. This will likely involve solid coding and documentation programs, front-end training, and a transition to more advanced technology to aid in the entire claims process. You will also need to set quantifiable goals that may include a desired percentage of denied claims (with the ultimate goal being 100 percent denial prevention) and a timeline to achieve it.
Implement
With a plan and goals in place, it is time to implement the changes that you have determined will help get you to those goals. Since your staff will be the ones facing most of the change, make sure to set a positive tone and help your team understand the value behind them. Frequent communication will help ensure things are continuing as planned as well as address any uncertainty coming from employees. Of course, you should also remain adaptable. During and after implementation, you will need to track results and continue to review data and analytics to make sure the plan is working. And don't forget to celebrate wins – recognize accomplishments to keep your team motivated and on board.
This three-step approach can and should be applied to each key performance indicator you use to track your revenue cycle. It may seem like a daunting task, but it’s essential for ensuring the continued financial health of your facility.
