- August 25, 2023
- Posted by: Steve Smith
- Category: Cardiology Billing
Get Your Revenue Cycle Functions Out of the Wrong Place at the Right Time – Track important KPIs of non-clinical admin functions including cardiology coding, medical billing, and A/R management to identify operational gaps, drive efficiencies and take informed decisions
Most independent, private and hospital/health system-affiliated cardiology centers and departments across America have been reporting a steady increase in patient volumes over the years, primarily due to poor food and lifestyle habits among American adults.
In 2020, the Centers for Disease Control and Prevention (CDC) had reported that “about 121.5 million Americans suffer from some form of cardiovascular disorders (CVD) every year, with the number increasing from 33% of the adults in 1980 to 48% in 2020”.
Interestingly, despite growing patient volumes, healthcare organizations have not been able to fully tap into this growth opportunity and increase their revenues at the same rate. Apart from inflationary and economic challenges that obstructed the 15% increase in patient volume to translate into growth in profits, other major causes for the slow revenue growth are healthcare organizations’ inability to weed out revenue leakages arising from inefficient administrative processes, rising labor and operational costs, and high staff turnover.
Although there’s significant room to grow revenues, the lack of expertise in non-core clinical functions (not entirely unjustified), is a major obstacle on the path to improved profitability. Therefore, for the purposes of this article, we shall discuss the top six KPIs to gauge the performance of administrative functions, so that decision-makers at healthcare organizations can take informed decisions when optimizing processes.
Tracking Cardiology Departments’ Operational Performance
Numerous performance indicators like Patient Volume, Profit Margin, and Claim Acceptance Rate can help track the performance of cardiology departments, but to keep this guide simple, we will discuss only the top 6 KPIs to track and monitor operational performance.
♦ Revenue per Full-Time Equivalent (FTE)
As the name suggests, this metric is used to measure the average revenue generated by cardiology departments’ non-clinical FTEs. It helps in evaluating the productivity and efficiency of the center’s workforce in generating and optimizing revenue.
♦ Average Revenue per Visit
Average revenue per visit helps in evaluating the effectiveness of the center in generating revenue from each patient interaction. A higher value suggests that the center is able to generate more revenue per visit, indicating successful pricing strategies, effective utilization of resources, or the provision of value-added services, while a lower value could signal potential areas for improvement to increase revenue per patient visit.
♦ Denial Rate
Denial Rate helps assess the effectiveness of cardiology centers’ billing and claims management operations. A higher value suggests potential problems in the coding, documentation, or claim submission processes. High denial rates can negatively impact the center’s revenue, cash flow, and operational efficiency and so it is vital to monitor denial rate at regular intervals and make changes as required.
♦ Average Reimbursement Rate
This indicator measures the average rate at which cardiology practices are reimbursed by insurers. The average reimbursement rate can be influenced by factors like payer mix, reimbursement methodologies, and changes in healthcare policies and so independent practices and hospitals should regularly monitor and analyze this KPI to stay informed about their financial performance and implement changes as required.
♦ Days in Accounts Receivable
Days in accounts receivable (also known as A/R days) measures the average number of days it takes for cardiology practices to collect payments from insurance companies. It provides insights into the efficiency of healthcare organizations’ revenue cycle management practices and the speed at which outstanding dues are converted into cash. A/R days help assess financial health, cash flow management, and efficiency in collecting payments.
♦ Return on Investment (ROI)
ROI measures the efficiency and profitability of investments made by private, independent and hospital/health system-affiliated cardiology departments. It quantifies the return or financial gain achieved, relative to the cost of investment. It can also guide decision-making regarding future investments, capital allocation, and resource allocation.
Although this is a generalized list of top KPIs to monitor efficiency of operational functions, it is worth noting that other KPIs may be equally important depending on the requirements of each cardiology practice.
To get more relevant information or consultation on important KPIs to monitor performance of your cardiology practice, it is advisable to seek expert opinion from a reputed healthcare revenue cycle management company with rich industry experience.