Many of us step back at this time of year to reflect on how our organization performed, and to think about our goals for next year. Hopefully, we have at this point at least made a pass at next year’s budget. That exercise often uses the current year as a baseline, and then we jump off from there. The question in our minds is naturally, did we do as well as we could? How can we do better?
With the thin margins and ever-increasing costs of doing business, revenue and cash flow are especially critical. Is your revenue cycle performing at its optimum? Are you getting paid as quickly and completely as you should?
In home care, speed and completeness of payment depends on how quickly caregivers report their time and then on your speed to get the claims out the door, correctly.
From an executive vantage point, you can’t determine if your processes are working correctly unless they’re being measured. Just like in medical and automotive diagnostics, having key metrics is crucial. There 17 different metrics and studies that would provide the data needed to “swim upstream” through your revenue cycle from cash application and denial resolution, to intake, to identify and address any weak points.
There are two approaches you can take – a) identify an internal or external resource to pull all the data together, creating a really comprehensive look at your entire revenue cycle, or b) concentrate on a few metrics, identify and address anything that needs attention, and expand from there.
If you opt for (b), pull together these six to start:
- Revenue vs cash receipts vs cash applied by month for the past 12 months
- Comparative aging trend by bucket for the past 6 months
- Days Sales Outstanding by Payer
- Dollars billed vs collected 120 days after billing
- Unbilled (held) claims
- Unverified hours (if using electronic visit verification)
Investigating anomalies in these figures will lead you to a myriad of opportunities for improvement in your revenue cycle. Make changes, then run new figures. Ensure that you’re getting updated figures reported to you regularly so your organization stays on track. Then expand to new metrics.