Key Performance Indicators (KPIs) within the healthcare revenue cycle play a vital role in monitoring financial well-being and optimizing revenue capture for physician practices, clinics, hospitals, integrated health systems and other entities when the goal is to provide financially sustainable, high-quality, cost-effective care—especially in rural America. 

The most valuable insight provided when monitoring your revenue cycle KPIs frequently is to find opportunities for improvement, whether it is investing in education for your team, or — if KPIs are severely underperforming — identify that you urgently need professional revenue cycle management services. 

In our day to day, we use industry-standard metrics from the Healthcare Financial Management Association’s (HFMA’s) MAP Keys, which serve as benchmarks for excellence in the healthcare industry’s revenue cycle. Here are the top 5 KPIs that help us identify bottlenecks, make informed decisions, and implement effective strategies for continuous improvement in each one of our clients: 

Duration of Net Accounts Receivable 

The KPI focusing on net days in accounts receivable (A/R), stands as a barometer of efficiency within the revenue cycle. According to HFMA, providers calculate this KPI by dividing the net A/R by the average daily net patient service revenue.  

Determining the average daily net patient service revenue involves examining the most recent three-month daily average from the organization’s income statement.  

The higher the net days in A/R, the more unstable the revenue cycle. Industry leaders suggest keeping days in A/R below 50 days at a minimum, with 30 to 40 days being a more favorable range.

Expense of Collection

Another crucial metric in financial management is the cost-to-collect ratio. Which results from dividing the total revenue cycle cost, reflected in the income statement, by the total cash collected from patient services on the balance sheet and the results show the efficiency and effectiveness of revenue-related operations. 

The total patient service cash collected should comprise all payments posted to patient accounts for services rendered, including undistributed payments, bad debt recoveries, Medicare and Medicare payments. However, it excludes patient-related payments and settlements like capitation, DGME, Medicaid DSH, along with specific reporting requirements for net days in A/R. 

Industry benchmarks suggest that the standard cost-to-collect ratio typically ranges between 2 to 4% of net patient revenue. 

Clean Claim Rate

The clean claim rate represents the percentage of claims that successfully pass without requiring manual intervention, including all claims accepted into your claims processing tool for billing, with primary, secondary, and tertiary claims or all relevant 837 types.  

A high clean claim rate is vital for reducing claim denials and identifying areas for enhancement in claims management. It serves as an indicator of potential issues in patient data collection, timely claim submission, and coding accuracy within the revenue cycle. 

Healthcare organizations are encouraged to target a clean claim rate of 90% or higher, with some industry sources advocating for a standard of 95%. Achieving and maintaining such rates is fundamental for an efficient revenue cycle management and minimizing financial losses associated with claim denials.

Unrecoverable Debt

Healthcare organizations encounter bad debt when they are unable to secure payment for the care they provide. This is an affliction we see increasing, as higher levels of debt continue to rise with shifts in insurance dynamics and out-of-pocket expenses for medical services in underserved areas with low-income population. 

By dividing the bad debt by the gross patient service revenue, providers can gain insights into their ability to collect accounts and pinpoint payer sources contributing to revenue loss. Acceptable levels of bad debt vary based on the type of organization, with hospitals typically reporting higher levels compared to physician practices.

Percentage of Net Patient Service Revenue Collected in Cash

This KPI evaluates cash collection as a percentage of net patient services revenue measuring your organization’s financial well-being by assessing its revenue cycle’s efficiency in converting revenue to cash. 

This financial management KPI involves dividing the total cash collected from patient services by the average monthly net patient service revenue statement, offering valuable insights into an organization’s fiscal robustness. 

Ideally, if this metric reaches 100%, shows strong financial health and integrity in your organization. However, values falling within the range of 90 to 95% might indicate potential revenue leakage, requiring a further assessment.

AMS: Your Revenue Cycle Manager 

When your Revenue is on the line, AMS Solutions  can help. With over 30 years of experience, we are your full-service healthcare revenue cycle management partner. Schedule a Free Consultation with our team now! 

We’re in the middle of deductible season: The time of year when most insurance plans reset deductibles back to $0 and in the meantime, patients are responsible for the full contracted rate of their sessions until they have finally met their set amounts. So, what exactly does this mean to your practice?

Deductible season lasts typically the first three to five months of the year, depending on your location, medical specialty and the patient volume you support. This can be really tough on medical providers for a couple of reasons: First, without insurance payments coming in, your practice’s income can take a hit at the beginning of the year. Second, patients will be receiving higher bills than usual and not all of them will feel prepared to pay these amounts, which can become a financial burden for your business if they go overdue on their balances.

Every healthcare provider can implement targeted strategies to navigate their unique challenges and the financial landscape of the season effectively, especially when you partner with a team that knows the ins and outs of Revenue cycle management to keep your practice in good financial health through these months. 

How to avoid delayed income during this time?

Up-to-date Documentation

As a medical provider, you must ensure that all chart notes and other paperwork requested are completed and sent to insurance companies on time, typically before the end of the previous year. This proactive approach ensures steady payments at the beginning of the deductible season and help your medical billing team keep a steady revenue flow more effectively.

Eligibility Check

Always check insurance eligibility for every patient, and this includes Medicare! Look for the following items when checking eligibility and verifying benefits:

1. Does the patient have an active policy? What is the effective date of that policy?
2. Does the patient have a co-pay, deductible, coinsurance, or an out-of-pocket maximum?
3. Does the service you provide require a prior authorization or a referral?
4. Does the patient have any secondary insurance?

Payment Collection

The easiest and most effective way to minimize the impact of deductible season, is to collect payments as accurately as possible at the time of service. Unless an insurer bars you from billing a patient (such as Medicaid).

Chances of collecting payments for deductible and co-insurance that apply to your service or co-pay balances drops 62% as soon as the patient walks out the front door according to the National Association of Healthcare Access.

Remember to always remind patients (verbally, in writing, or online) of their financial responsibility. Whether it is keeping insurance updated, patient contact information updated, and a friendly reminder that most insurers require the patient to pay the provider some portion of their bill – even Medicare.

Accessible Patient Support

One efficient solution is to offer patients the option to pay balances and submit billing questions online in real time, on their terms and not be limited by business hours or staff availability. This action not only modernizes and improves the patient’s experience but increases patient collection speeds, reduces paper statements and staffing costs while improving operational efficiency.

These strategies will help your medical practice keep a better cash flow during this deductible season. If you find yourself seeking a reliable partner to navigate these challenging times, contact us today for all-inclusive medical billing solutions tailored to your practice.

An efficient revenue cycle process is the financial lifeline of any healthcare practice. It encompasses everything from patient registration to the final payment of a balance. In today’s rapidly evolving healthcare landscape, it’s crucial for medical practices to periodically review and refine this process. 

An effective review can identify inefficiencies, streamline operations, and ultimately lead to enhanced financial performance. Understanding and continuously improving the revenue cycle process is key to the success of healthcare providers. Let’s take a closer look at the revenue cycle process, and how it can be improved for your practice.

Understanding the Importance of the Revenue Cycle Process

At its core, the revenue cycle process in healthcare is a comprehensive approach to managing patient billing and payments. It begins when a patient first schedules an appointment and continues through to the collection of payments. This cycle includes patient registration, insurance verification, charge capture, claim submission, payment posting, and follow-up for denied claims or unpaid balances.

While it’s typically seen as back-office administrative work, and it is in many ways, it’s nonetheless one of the most critical components contributing to the overall health of any healthcare provider. A well-managed revenue cycle ensures that providers are reimbursed for their services in a timely and accurate manner. It also helps in maintaining a positive patient experience, as billing and payment processes are integral to patient satisfaction. With the increasing complexity of healthcare regulations and insurance policies, the efficiency of the revenue cycle process has become more important than ever.

Steps to Effectively Review Your Revenue Cycle Process

Reviewing your revenue cycle process effectively involves several key steps. Here are the most crucial ones:

1. Conduct a Thorough Audit: Begin with a comprehensive audit of the entire revenue cycle. This should include assessing patient registration accuracy, billing processes, coding accuracy, and the efficiency of payment collections.
2. Analyze Denials and Rejections: Understanding the reasons behind claim denials and rejections can provide valuable insights. Identifying common patterns can help in rectifying systemic issues.
3. Evaluate Patient Payment Processes: Assess the methods and ease of patient payments. This includes examining billing clarity and the convenience of payment options offered to patients.
4. Benchmark and Set Goals: Compare your processes with industry benchmarks. Set realistic improvement goals based on this analysis.
5. Implement Process Improvements: Based on your findings, implement changes aimed at improving efficiency and accuracy. This might include staff training, software upgrades, or changes in workflow.

The Central Role of Medical Billings in the Revenue Cycle Process

Medical billing plays a key role in the revenue cycle process. It involves preparing and submitting claims to insurance companies and then following up on those claims to ensure payment is received. This stage is critical and directly impacts the revenue flow of a healthcare provider. Here are some factors that contribute to a lean cycle:

• Accuracy in Coding: Accurate medical coding is vital to ensure claims are processed smoothly by insurance companies. Any errors can lead to claim rejections or denials, delaying revenue.
• Timely Submission: Timely submission of claims is essential. Delays in submission can lead to delayed payments and affect the overall financial health of the practice.
• Effective Follow-Up: Regular follow-up on submitted claims is necessary to address any issues promptly and ensure timely payment.

Trust AMS Solutions to Refine and Improve Your Revenue Cycle

Effectively reviewing and managing the revenue cycle process is essential for the financial health of any healthcare practice. Remember, an optimized revenue cycle process not only benefits the financial bottom line but also enhances patient satisfaction and trust in your healthcare services. Take the next step in your practice’s financial well-being, and contact AMS Solutions today.

The world of healthcare is incomprehensibly complex, and the core need of medical coding is a critical component. Medical coding is often seen as the backbone of revenue cycle management, and this process of translating complex medical procedures, diagnoses, and equipment into universal codes is more than just administrative work, it’s one of the most important places to enforce financial health and compliance. 

Medical coding and billing experts specialize in navigating this complex terrain while offering top-tier medical billing and collections services. We’re going to take a close look at the overall impact of medical coding on the revenue cycle, and what can be done to improve and streamline the process. 

The Role of Medical Coding in Revenue Cycle Management

Medical coding stands at the heart of the revenue cycle in healthcare, serving as a critical bridge between patient care and billing. It involves the meticulous conversion of healthcare diagnoses, treatments, procedures, medical services, and even equipment into universal medical alphanumeric codes. These codes are pivotal in determining how much healthcare providers are paid, making them a cornerstone in the financial viability of medical practices.

The impact of medical coding on the revenue cycle cannot be understated. Accurate and efficient coding is essential for timely and correct billing, which in turn ensures a steady cash flow for healthcare providers. When coding is precise, claims are processed more smoothly, reducing the likelihood of denials or delays that can significantly disrupt the revenue cycle. Conversely, inaccurate coding can lead to claim rejections, underpayments, or even compliance issues, all of which can have detrimental effects on a practice’s revenue.

Primary Benefits of Accurate Medical Coding

Accurate medical coding extends several benefits to healthcare providers, crucial for maintaining a robust and efficient revenue cycle. The right coding and billing team will ensure that your coding is accurate, compliant, and geared toward maximizing your revenue cycle’s effectiveness.

First and foremost, it significantly reduces the chances of claim denials. When medical services are coded correctly, claims are more likely to be approved the first time around, which speeds up the reimbursement process and ensures a steady cash flow. Another key benefit is enhanced patient satisfaction. Accurate coding leads to transparent billing, where patients receive clear and correct statements for the services they’ve received. This transparency fosters trust and reduces confusion or disputes over billing, contributing to a positive patient experience.

Additionally, efficient medical coding practices streamline the entire billing process. By minimizing coding errors, the need for re-submissions and follow-ups is reduced, freeing up valuable time and resources. This efficiency not only boosts the financial health of healthcare providers but also allows them to focus more on patient care.

Overcoming Challenges in Medical Coding

One of the most common issues is coding errors, which can stem from various factors like outdated code sets, complex case scenarios, or simple human error. These mistakes can lead to claim denials, delays, and even compliance risks, all of which negatively impact the revenue cycle.

Compliance issues are another significant challenge in medical coding. With constantly evolving healthcare regulations and coding standards, staying compliant requires continuous education and vigilance. Non-compliance not only risks financial penalties but can also damage the reputation of a healthcare provider.

Trust AMS Solutions to be Your Partner in Enhancing Your Revenue Cycle

Our team ensures accuracy, compliance, and efficiency, turning complex coding challenges into streamlined processes. We’re committed to enhancing your revenue cycle, reducing claim denials, and improving patient satisfaction. Trust us to be your reliable partner in navigating the complexities of medical billing and collections, ultimately boosting your financial performance and allowing you to focus on providing exceptional patient care. Choose AMS Solutions for unmatched expertise in medical coding and revenue cycle management; reach out today to get started.

Prior authorization, or PA, is a requirement for certain medications and treatments. Before you can receive the care you need, your insurance company may need to grant approval first. Sometimes the process is handled before you get to the pharmacy, while other times you may be told you have to wait for your insurance provider to allow you to get the prescription through them. Let’s take a closer look at everything you need to know about prior authorization for medications.

What is Prior Authorization for Medication?

So, what is a prior authorization? Before a physician is able to administer certain medical procedures, devices, or specific medications, they may need to follow the process to get approval from your insurance company. Prior authorization has to be requested before the request for your insurance to cover all or a portion of your treatment. Your physician’s request may even be denied.

Why a Prior Authorization is Required by Insurance

According to health insurance companies, prior authorization is required for some treatments, medications, procedures, and medical devices to keep the cost of healthcare lower.

Medications That Need PA

Prior authorization is a requirement for several different medications. The request may be necessary for a number of reasons, including:

• The medication is expensive (such as rheumatoid arthritis and psoriasis medications)
• There is a cheaper generic version available and the physician is requesting the brand name
• Used to treat conditions that are non-life threatening
• Used at doses higher than normally recommended
• Cosmetic use (such as wrinkle treatments and hair growth)
• Your physician deemed it medically necessary (if this is the case, they need to inform the insurance company that other medications that are covered will not be effective forms of treatment for you)

How to Tell if You Need Prior Authorization

Finding out if your insurance company requires prior authorization is easy. Calling your insurance company and asking them directly is a good way to go. Otherwise, your pharmacy will inform you if prior authorization has been requested by your doctor when you go to fill or pick up the prescription. If it has not been approved, they will charge you the full amount.

How Prior Authorization Works

When your doctor requests a prescription for you, they should contact your insurance for prior authorization. If they did not, however, your pharmacy will contact the doctor to let them know the authorization is required. Once they are aware that approval needs to be requested, your doctor or a member of their staff will reach out to your insurance to get the forms filled out and submitted. This can take a while, depending on your insurance company.

In addition to the paperwork your doctors’ office submits on your behalf, your insurance provider may also require you to fill out some forms as well. You should call them to see if there is anything you need to do on your end before they review and approve your request. Once the insurance company has made its decision, it will contact you, your doctor, or your pharmacy about whether the request was approved or denied.

How Long Does it Take?

In most situations, prior authorization takes a few days to process. The specific time frame depends on what type of medication or procedure your physician has requested, along with the insurance company you have. If you haven’t heard anything by a week after your initial discussion with your doctor, you can contact the pharmacy to see if the request was approved. If your submission was not approved, the next step is to contact your insurance company directly to find out why the request was denied or delayed.

A doctor’s office is best when everyone knows what they’re doing. If the environment of the office is chaotic, it will clearly show in all aspects. This is where having a medical practice management system becomes useful. 

Without a way to handle the countless tasks that make up an average day at the office, you can expect chaos on a day-to-day basis. 

Take note of how long it takes for a current patient to get checked in. If it’s taking longer than 10 minutes to check in an old patient, your health practice could be in desperate need of medical practice management. 

Anywhere your practice could be doing something more quickly, is where you need to be proactive. Life is easier when you decide to add a medical practice management group to your office. 

What is the Basic Definition of Medical Practice Management?

Medical practice management is defined as healthcare software used for completing financial and administrative tasks daily. 

Running a doctor’s office efficiently means having the right resources in place, such as a medical practice management system. Patients can tell when an office is clearly disorganized and that’s the last thing you want as a doctor. 

Hiring a professional medical billing company can help with improving the overall flow of how your office runs on a day-to-day basis. Medical practice management systems are a huge reason for more healthcare providers deciding to ditch a paper filing system. 

What Can A Medical Practice Management System Do?

The facts are this, having a medical practice management system makes running your healthcare practice a breeze. Instead of having to lug around multiple, bulky files, it’s simple to find everything you need for an appointment at your fingertips. 

Patients can easily:

• schedule appointments.
• send a message to their healthcare provider.
• request prescription refills.
• Make payments. 

Healthcare providers can:

• view/share lab results.
• respond to any patient messages.
• view all patient health records. 

Front desk employees will find it simple to:

• access/edit basic patient information.
• schedule any appointments made via phone calls quickly.
• update patient insurance info

Skip having to manually input everything with pen and paper. This kind of medical software makes completing daily tasks easy for everyone.

What Are The Benefits of Medical Practice Management?

There’s an unlimited amount of benefits for using medical practice management. If you’re thinking that there has to be an easier way to do admin tasks, you’re right. There’s no reason to suffer from constantly losing and replacing important paper files.

The benefits you will reap from adding a medical practice management program are:

• Enhanced Communication 

• Instead of having to make a phone call for a simple question, patients can send a quick message to the front desk secretary, or their preferred healthcare provider. No more unnecessary games of phone tag when the patient is trying to get their lab results. 

• Ease of Access to Patient Records

• In older offices, you’ll notice everything is done on paper. However, with medical practice systems, all work and tasks can be completed on a tablet, laptop, and desktop computers. 

• Automated Services

• Front desk employees will appreciate that patients can schedule their own appointments using an online calendar, plus it only takes a couple of clicks to request a refill. 

The old days of paper filing are over, and the new days of electronic takeover in health practices have begun. You know how the saying goes: you either get with the times or get left behind. 

Patients will ultimately begin flocking to the healthcare offices that have the latest in healthcare technology. A healthcare office that’s lacking in updated technology will not only have trouble keeping patients but also have a good amount of trouble keeping up the daily workload. 

How To Incorporate Medical Practice Management Systems

The most crucial part of every doctor’s office is the software they are using to successfully run their business. When everyone can do their job the most efficiently, clients will be happy. Happy clients mean they will be back for more health-related services. 

So you want to implement a medical practice management system, but don’t know where to start? Well, it’s a simple process, contact a professional medical billing company.

Call today to get a free audit of your healthcare practice’s financial account.