We in home care will continue to be faced with challenges—capacity issues, mandated costs which need to be managed, EVV compliance, value-based care and payments, consumer-directed care, provider consolidation by design, increased payer diversity, and the advent of claims and EVV aggregators, to name a few. However, if you look at these challenges from a different perspective, they are also all significant opportunities. Having readiness plans in place that focus on these challenges/opportunities, and executing on them timely and completely, is more critical than ever.
With the increasing revenue challenges, thin margins, and higher costs in our business, revenue and cash flow management are especially critical. The following are a few key questions to consider:
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- Is your revenue cycle performing at its optimum?
- Are you billing for all services?
- Are you receiving payment on time and completely?
- How much of your agency leadership time is spent managing the revenue cycle functions?
The answers to these questions can help drive focus on the areas of your revenue cycle which could be improved in order to maximize collections performance. This process takes time and needs to be a core component of your readiness plan.
In order to help jumpstart this planning process and determine if your agency is optimized for growth, it is important to review key indicators of performance and progress. Having the right indicators enables you to leverage your time to further optimize where you spend your efforts in your agency’s readiness process.
The following five metrics are the foundation, and simple to compile with a good, full-functioned agency management system:
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- Revenue vs cash receipts vs cash applied by month for the past 12 months
- Comparative aging trend by bucket for the past six months
- Days Sales Outstanding by Payer
- Unbilled (held) claims
- Unverified/unconfirmed hours (if using electronic visit verification)
These indicators will help identify both trends of stability and any outliers that need to be further investigated to determine if they are an exception, or a pattern that requires further investigation and improvement within the revenue cycle. It is important to make changes incrementally and baseline performance before, during and after the change to ensure that your organization stays on track. While these five indicators are the staple of managing revenue cycle, it is important to ensure that you use those that are also relevant to your agency, line of business, and operational goals.
To learn more about how Sandata can assist with your organization goals and how to improve agency growth and performance, schedule a call with us today.
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