Monday, December 1, 2014

The Most Important RCM Metrics You Must Measure

Revenue cycle management (RCM) is tough enough work as it is. Still, most of the burden can be eased by keeping close watch of five major metrics, namely:
FPRR – AKA the first-pass resolution rate, the FPRR points to the share of a practice’s claims which get paid upon only the first submission. Keeping track of this metric ensures a bird’s-eye-view of a practice’s RCM processes, from verifying insurance eligibility to coding and billing.

Days in Accounts Receivable (A/R) – This metric represents the average timeframe it takes for a practice to get paid. A smaller number means that a practice is obtaining payment faster. Monitoring this metric allows for identification of factors hurting finances; i.e. issues involved with assessing the cause of an increase.
% of Accounts Receivable > 120 days – A/R is grouped into aging buckets based on 30-day long elapsed times (i.e. 30, 60, 90, etc). A practice’s efficiency at securing reimbursements is measured by this metric. Ideally, only less than 25% of A/Rs should be greater than 120 days—bigger numbers point to an RCM red flag.
Net collection rates – This is the percentage of total prospective reimbursement gathered out of the total allowed amount. Also referred to as the adjusted collection rate, this metric helps assess a practice’s effectiveness after all completed transactions.

Average reimbursement/encounter – This metric refers to the average amount collected per encounter. Measuring this allows a practice to sense whether it’s performing well enough, or is still due for improvement. 

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