Revenue Cycle Management Key Performance Indicators (KPIs)

Health care facilities today face significant challenges, from rising treatment costs to increased billing and claims complexity. Improving revenue cycle management is a logical step to reduce denials and streamline patient experiences, balancing the two critical elements of any health care facility — profitability and patient care.

The global revenue cycle management market is valued at $135.92 billion and is expected to reach $282.12 billion by 2030. As more health care organizations realize the impact of managing the revenue cycle, KPIs and metrics take on new meaning, helping organizations track and measure the performance and efficacy of their financial processes.

Why Are Revenue Cycle Management (RCM) Metrics Important?

Revenue cycle metrics help you assess the financial performance of your health care institution from the beginning to the end of the revenue cycle. Effective revenue cycle management is the cornerstone of any health care organization. Measuring the efficiency of the revenue cycle helps identify improvement opportunities and inform strategies to streamline your processes, improve cash flow and reduce patient debt.

RCM KPIs take an overarching strategic goal, like improving your financial performance, and break it down into actionable improvement areas. For example, if your no-show rate is high, you are losing revenue. You can adjust your patient communication strategy to minimize missed appointments. KPIs will measure how well that adjustment achieves your objectives. RCM KPIs can increase your revenue stream and boost operational efficiency, elevating patient care from start to finish.

Revenue Cycle Management KPIs to Improve Financial Performance

Many revenue cycle management metrics exist to measure the effectiveness of different strategies throughout the revenue cycle. Your choice of KPIs depends on your specific objectives and pain points, but some of the most practical KPIs include:

Front Office RCM KPIs

Your front office is the hub of patient relationships. Missed management opportunities could create friction in your revenue cycle. Some metrics to measure front office impact include:

• Appointment wait time: This metric refers to the time between patient appointment requests and confirmation. The shorter the wait time, the better quality patient experience you provide. Long wait times can impact profitability as patients look elsewhere for a better experience.
• No-show rate: The metric provides information on the percentage of patients who miss their appointments, leading to lost revenue. Redressing the balance of a high no-show rate could be as simple as sending automated reminders or confirming appointments by phone.
• Appointment lead time: Measuring the time between appointment requests and patients receiving appointment times is invaluable in retaining current patients and attracting new ones.
• Provider productivity: This metric details the number of appointments at your facility over a specific period. A high productivity rate — more appointments per day or week can increase revenue. You can improve low productivity rates with efficient scheduling and training, ensuring patients move through your facility without compromising care.
• Schedule utilization rate: Measuring the percentage of your time used for appointments and patient encounters shows where your practice uses its time efficiently and identifies inefficient areas so that you can make improvements.
• Patient registration or insurance verification accuracy: Accurately capturing patient insurance and billing details reduces claim denials and eliminates preventable errors, improving overall revenue cycle management.

Back Office RCM KPIs

Efficient back-office operations are essential to bridge the gap between administration and patient care. Patients may not encounter this side of revenue cycle management, but back office efficiency directly impacts their experience and your profitability. Efficient billing and collections processes allow your team to focus on their core competencies — achieving better patient outcomes. Some typical metrics in this area include:

• Net collection rate (NCR): This metric measures how well your organization collects the money for billed services. You can establish your NCR by dividing payments received by the total amount billed.
• Days in accounts receivable (DAR): The total number of days it takes for your facility to receive a payment after a claim is submitted can indicate the efficiency of your back-end cycle. The lower the days in accounts receivable, the more efficient the cycle.
• Charge lag: This metric refers to the delay between your facility providing a service and entering a charge. A good benchmark is to enter your charges within 24 hours of providing the service.
• Clean claims rate (CCR): Measuring the percentage of claims submitted without changes indicates the efficiency of your claims cycle. The higher your CCR, the more time and money you are saving.
• Denial rate: This metric shows the percentage of claims payers deny. Denials can damage your profitability as you lose income on services you provide. Low denial rates mean your RCM process is effective and reliable.
• Point-of-service collection rate: This RCM metric measures the percentage of payments your facility collects upfront instead of billing out later.
• Patient satisfaction rate: Patient feedback is a powerful tool for improving patient experiences. You can ask patients to rate their experience with your facility on a scale and convert that into a percentage of satisfied patients. An improved patient experience is essential to your long-term revenue and can inform your communication strategy.

How to Leverage Revenue Cycle Analytics for Improved Performance

The above metrics provide information to support revenue cycle management analytics — using data to track, analyze and optimize your health care revenue cycle. Collecting KPI data is only helpful if you can leverage it to make proactive improvements. As many as 38.33% of medical facilities agree they have “a lot to do” in analytics, and these changes start with KPIs.

Leverage your RCM analytics with the following best practices:

1. Set Clear Objectives

A clear finish line from the outset ensures you can align your program with your goals. Choosing the right metrics quantifies your improvement efforts and supports future strategic objectives.

2. Automate

Automating specific processes streamlines your operational processes and reduces the human resources you need for activities such as claims and billing.

3. Monitor

KPIs can make your facility more agile. You can leverage your results and use analytics to identify patterns and opportunities in real time, making changes as patient demands and market trends evolve.

4. Develop New Strategies

Data analytics can provide numerous insights into your RCM program. Using data can identify patterns invisible to the human eye. This data can inform your dynamic RCM performance strategies, keeping your facility agile in a fast-paced environment. With your finger on the pulse of patient needs, you can stand out from the crowd and continue evolving your offerings in line with patient requirements.

5. Outsource

Many improvement areas revolve around front and back office efficiency. Business process outsourcing (BPO) is a robust strategy for boosting your productivity and performance while delivering an exceptional patient experience. With a dedicated team to handle crucial elements of your revenue cycle, you can improve your baseline KPIs and gain meaningful insights to elevate your operations.

Streamline Your Revenue Cycle Management With DME Service Solutions

Balancing collections management and patient care can be challenging for health care organizations. Partnering with a team of experts can relieve you of the administrative burden so you can focus on caring for your patients. DME Service Solutions can elevate your revenue cycle management with BPO services specific to the health care industry.

We are a HIPAA-compliant company with dedicated and professional teams available to handle the critical parts of your revenue cycle. With an expert team to manage your collections, you can confidently focus on health care with meaningful process improvement insights, denial management and timely collections. Contact us to learn more about how we can deliver meaningful experiences to your organization today.