Leveraging Revenue Cycle Performance Tools To Affect Positive Change For Your Practice

Doing things the way they’ve always been done is an easy pitfall for many provider practices. There’s so little time to complete each day’s tasks that it leaves even less time to think about process improvements or practice analytics. Where would one even begin? And is it really worth the effort? The answer is a resounding “yes!” But getting started requires data, and gathering that data requires the right revenue cycle performance tools. And therein lies the challenge. 

Our industry is data-challenged. That’s not to say we don’t have data. But the data we do have is often not pulled together in a meaningful way to make it actionable. Having the data isn’t the end-goal; it has to reveal constructive insights. And that’s where we run into problems. Is your data able to tell you how the increase in patient pay has impacted your organization? Can it show you how much risk you can afford to take in your payer contracts? This is what we mean by making data actionable. 

Clearinghouse Insights

Your clearinghouse can provide valuable information on processes occurring prior to service up through claims submission. This includes patient access, coding, preparing and reviewing claims, and claims submission. One of the most valuable measurements is your “clean claims ratio.” According to Medical Group Management Association (MGMA), a clean claim is a claim that will be paid the first time it’s submitted, which means the claim¹:

• Was never rejected
• Did not have a preventable denial
• Was not filed more than once
• Had no errors

You know the saying “garbage in, garbage out.” Never has this phrase had more meaning than when applied to the claims submission process.  Unclean claims causes extra work for staff and can impede cash flow, lengthen days in AR, and slow your entire revenue cycle.

There are several valuable clearinghouse-related measurements you should be tracking month by month. First and foremost, strive to resolve at least 85% of your claims in 30 days.² Other measurements you should be tracking are below, along with a typical goal you should strive for.³  

• First-pass clean claim rate >98%
• Accepted claim rate >95%
• Duplicate claim rate <10%
• Rejected claim rate <5%
• Time from service date to payer <7 days
• Time from rejected to corrected <3 days

In addition to measuring your month-over-month performance, it can be helpful to compare these trends to those of your peers or to industry benchmarks. This is also information that should be available from your clearinghouse. If you’re showing steady improvements but are still lagging behind where your peers are performing, there may be other problems you’re overlooking. 

Payer Insights

Payer-related insights can highlight “upstream” problems such as coding errors or missing eligibility information, which can be indicative of the need for additional staff training or problems in the patient intake process. These trends cover all eligibility and claim-related activity pertinent to payer submission. This includes rejections, claim edits, claim scrubbing, claim submission, and acknowledgement by the payer.

The best measurements to track include month-over-month claim data for:

• Time from payer acknowledgement to payment
• Payer payment rates
• Reimbursement ratios
• EFT versus non-EFT payers
• Denial rates by reason code and by payers

Patient payment measurements that should be tracked include month-over-month collections data for:

• Days in collection, 31 – 60 days, 61 – 90 days, 91 – 120 days, beyond 121 days
• Dollar amount for each “days in collection” bucket 
• Write-off amounts

Tracking this data can help you better understand your organization’s effectiveness at getting paid.

Finding the Right Tools and the Right Data

It may seem daunting to think about pulling and managing so much data every month, but it may actually be easier than you imagine if you leverage the right revenue cycle performance tools. Resources such as MGMA and HFMA regularly publish articles about how to think about, study and analyze your revenue cycle. In addition, many practices already have reporting capabilities that they aren’t using to the fullest. To start, it can be helpful to ask these questions: 

• Which data analytics do you need most?
• What data can you access now?
• Does your patient accounting system have additional reporting capabilities you’re not using?
• Do your practice management, EMR, EHR, or HIT vendors have data solutions you can add on to your existing systems?
• Does your clearinghouse or RCM vendor have additional modules you can subscribe to?

The road to effective revenue cycle management is a marathon, not a sprint. Taking inventory of the information you already have, or can easily get, can help make the journey less overwhelming and get you off on the right foot. In the end, it’s about more than just bringing data to your leadership. It’s about providing actionable insights and recommendations, which can pave the way toward positive change and a more profitable future. 

Revenue Performance Advisor from Change Healthcare applies advanced analytics to the entire revenue cycle—from patient access to payment posting—giving providers actionable insight into opportunities for improvement. Our solution gives providers the tools they need to help streamline workflows and improve processes—all in a single, easy-to-use revenue cycle software solution. Providers can also benefit from increased efficiencies, faster reimbursement / enhanced cash flow, and fewer write-offs.

^{1 Graham, Tina, “You might be losing thousands of dollars per month in ‘unclean’ claims,"" MGMA
2 Zindl, Lori, “Keeping Score: Utilizing Key Performance Indicators to Transform Your Revenue Cycle,” MGMA18 Financial Conference [Presentation],
3 ibid.}