Key Reports to Review for Effective Revenue Cycle Management
Effective revenue cycle management (RCM) is essential for the financial health of any healthcare organization. To ensure smooth operations and timely payments, healthcare administrators and finance teams must regularly review crucial reports. Here are four key reports that healthcare professionals should review to optimize their RCM process:
1. Clean Claim Rate
A “clean claim” refers to a claim submitted to an insurance payer that contains all the necessary information, follows proper coding guidelines, and meets the insurer’s requirements. A high clean claim rate indicates an efficient billing process with minimal errors.
Why Review Clean Claim Rate?
● Billing Efficiency: A high clean claim rate indicates that your billing department is submitting accurate claims the first time, reducing the need for costly and time-consuming claim resubmissions.
● Faster Reimbursement: Clean claims are processed quickly by payers, leading to faster reimbursement and improved cash flow for your organization.
● Reduced Denials: A high clean claim rate helps minimize claim denials, saving time and resources that would otherwise be spent on appeals and resubmissions.
2. Percent of Accounts Receivable Paid within 60 and 120 Days
Accounts receivable (AR) aging reports provide insights into the age of outstanding invoices. Monitoring the percentage of AR paid within specific timeframes, such as 60 and 120 days, helps identify potential collection issues.
Why Review AR Aging Reports?
● Cash Flow Management: Tracking payments within specific timeframes allows you to manage your organization’s cash flow effectively.
● Identifying Delays: A high percentage of AR paid within 60 days indicates prompt payment, while an increasing percentage after 60 days may signal collection issues that need attention.
● Proactive Actions: Early identification of collection challenges allows you to take proactive measures, such as following up with payers or patients, to expedite payments.
3. Accounts Receivable Unpaid Over 120 Days
Accounts receivable that remains unpaid for an extended period can negatively impact your organization’s financial health. Monitoring the percentage of AR unpaid for over 120 days is crucial to prevent prolonged revenue loss.
Why Review Over 120 Days AR?
● Identifying Collection Challenges: High percentages of AR unpaid for over 120 days may indicate issues with collection processes, payer disputes, or outstanding patient balances.
● Prioritizing Collections: Identifying older unpaid accounts helps you prioritize collections efforts, ensuring that you recover as much revenue as possible.
● Reducing Bad Debt: Addressing unpaid AR promptly reduces the risk of accounts becoming uncollectible bad debt.
4. Ratio of Closed Claims to Overall Claims
The ratio of closed claims to overall claims measures the efficiency of your claims processing and resolution. It helps determine how quickly your organization resolves claims and receives payments.
Why Review Closed Claims Ratio?
● Efficiency Assessment: A high ratio indicates efficient claims processing, with a higher percentage of claims being successfully closed.
● Timely Revenue: Efficient claims resolution leads to quicker reimbursement, improving your organization’s revenue stream.
● Resource Allocation: Monitoring this ratio helps allocate resources effectively, ensuring that claims are processed promptly.
Healthcare organizations must regularly review these key reports as part of their RCM strategy. By monitoring clean claim rates, accounts receivable aging, unpaid AR over 120 days, and the ratio of closed claims to overall claims, healthcare professionals can streamline their revenue cycle management, improve cash flow, and maintain financial stability. Effective RCM not only benefits the organization but also ensures that patients receive the quality care they deserve.
