At healthcare centers like yours, revenue cycle improvement is a key aspect of revenue cycle management (RCM). Refining your RCM leads to greater productivity and profitability, which leads to better patient care for the community.
Smart revenue management is especially important for any federally-qualified healthcare center (FQHC). Under federal rules, you have an obligation to stay within regulatory compliance and use public dollars wisely.
This article helps healthcare organizations understand some of the industry’s best revenue cycle management practices. Below are six effective ways to boost your healthcare center’s financial wellness.
#1 Track Key Performance Indicators (KPIs)
Your key performance indicators (KPIs) are metrics showing the strength of your organization. KPIs are typically measured in days, dollars, resource hours, or similar numerical formats.
A healthcare organization may or may not be leveraging KPIs for optimal performance. Common KPIs in healthcare that you should consider tracking include:
- Third Party Payments
- Patient Payments
- Clean Claim Rate
- Collection Rate
- Payment Velocity
- AR Aging
- AR Days
- AR % over 90 Days
- Denials - Top Reasons
- Rejections - Top Reasons
- Coding Summary
Take a closer look at your KPIs when your healthcare organization needs a firmer grip on its financial status. KPIs aren’t usually front-and-center for healthcare providers until something raises a red flag, like losing numerous staff members or noticing your reimbursement rates have dwindled precariously.
The situation may call for an internal review from an RCM service to assess what’s been successful and what kinds of tweaks you may need for revenue cycle improvement. To learn more about vital healthcare KPIs, please see the related article, 5 Key KPIs Your Revenue Cycle Manager Should Track.
#2 Examine Your EHR Hygiene
A strong healthcare provider needs strong practices regarding electronic health records (EHR). Under the federal rules of the Centers for Medicare and Medicaid Services (CMS), proper EHR management helps reduce medical errors, prevents delays in care, and eliminates inaccuracies in nationwide medical recordkeeping.
Have you ever worked with a revenue cycle healthcare partner to clean up your EHR management? Your partner works as an intermediary between your billing office and the reimbursement sources, like insurance companies and Medicare/Medicaid. Among other things, they handle arduous tasks like scrubbing your data and ensuring its hygiene.
#3 Automate and Pre-Verify Patient Eligibility
Reduce claims rejections and maximize your payments by pre-qualifying patients for coverage eligibility. This no longer has to be handled by hand because digitization and automation have changed the landscape of patient claims processing.
Use automation to interact with payment sources and streamline the submission and claims process. As a result, your clinic or hospital revenue cycle benefits from the increase in first-time paid claims, and your staff is relieved to be freed from the burdens of detailed paperwork.
#4 Improve Handling of Medicare Advantage
Healthcare trends change over time, and Medicare Advantage is increasingly the choice of a new generation of Medicare beneficiaries. The latest research from the federal government shows 45 percent of patients chose Medicare Advantage in 2022 and more than 50 percent are expected to choose it by 2025.
Many FQHCs are still missing out on the additional revenue they’re owed for these Medicare Advantage patients. Double-check that your healthcare center is handling these claims appropriately and securing the highest possible payment rates.
#5 Clarify Gross vs. Net Margin
Make sure to measure what matters when it comes to your margins. Some healthcare centers make the mistake of celebrating the gross margin while ignoring the net margin.
You might be surprised to learn that your gross margin isn’t as important as your net margin. As Altruis CEO Chris Caspar explains, “Here’s a secret: The gross collection rate isn’t really that important. It simply reflects the ratio between what you charge and what the payer allows.”
If the payer’s rate is $1,000 and you charge $1,000 for your services, your gross collection rate is 100 percent. While that seems perfect, it doesn’t tell you much about how you’re executing your RCM plan.
By contrast, the net margin reveals the total payments for a given period, divided by the total charges after any write-offs or adjustments. Your net collection rate is a much more accurate reflection of your financial performance.
If your net collection rate is under 90 percent, your RCM needs work. Your goal should be to rise above 90 percent and move closer to 100% net collection.
#6 Optimize, Maximize, and Speed Up Your Revenue Cycle
Work with an RCM expert to look for savvy ways to optimize your internal processes and strive for maximum revenue. Large pools of uncompensated claims could be languishing in your billing office due to a clunky RCM process and a staff that’s already overwhelmed by the daily demands of providing great healthcare.
How can healthcare organizations improve revenue cycle management? With help from Altruis. We implement the latest revenue cycle management techniques to put the focus on profitability. We find new efficiencies that maximize revenue while minimizing the hassles of healthcare.
Schedule a call with us to learn how we use the world’s best practices in healthcare revenue cycle management to help the nation’s healthcare centers optimize revenue cycle management for outstanding results.