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.