Healthcare Accounts Receivable Services: Top 3 KPIs to Follow

You need to know how your finances are going if you want to keep offering great care that doesn’t cost too much. This matters because better care and smarter spending are what today’s healthcare is all about. It is really important for you as a healthcare provider, to clearly understand the key performance indicators (KPIs) as they enable you to figure out how well your healthcare accounts receivable services are performing and overall financial performance. You can also identify the areas of improvement by leveraging the healthcare accounts receivable KPIs efficiently.

You might have already realized the fact that the recent political changes in the US have made healthcare rules more stringent, causing a direct impact on your bottom line. Costs for staff are climbing, finding worker is harder, and fewer patients are coming in. It’s making your profits super tight. Hospitals are also dealing with more unpaid bills and giving out more free care than before. Prior authorization (PA) isn’t any easier either – it’s just another part of the stricter system you’re trying to manage.

You want to make things better, right?

You must know your numbers if you want to stay on top of your revenue cycle. The Healthcare Financial Management Association (HFMA) has these cool MAP Keys that set the gold standard for doing it right. So, what are the big KPIs everyone tracks? Let’s break it down step by step!

The top KPIs in your healthcare accounts receivable services:

Net days in healthcare accounts receivable:

You need to keep an eye on your net days in healthcare accounts receivable services if you want to see how smooth your revenue cycle is running. To figure it out, you divide your net A/R by your average daily patient service revenue. HFMA says this is super important, and it’s one of the best numbers to check how your finances are doing.

You can find the data you need for this KPI right on your balance sheet. HFMA makes it easy to know what to look for. It is really important for you to maintain numbers like your credit balance, delinquent accounts, discounts for your charity care, allowances for your third-party payers, etc. The important data that you should always need are-

• The AR that you have outsourced to a third-party healthcare accounts receivable services but you have not classified them as bad debt
• Medicare Disproportionate Share Healthcare (DSH) payments
• Payments that you consider as Medicare Disproportionate Share healthcare

You get Medicare Indirect Medical Education (IME) payments based on MS-DRG accounts. It’s just a fancy way of saying Medicare pays you extra to help cover the costs of teaching healthcare practices while handling patient cases.

You deal with accounts receivable from patient-specific third-party settlements all the time. That just means you’re getting a payment from an insurer or payer that’s tied to one specific patient’s account. It’s like matching the payment to the right person’s bill!

You should leave out a few things when looking at your accounts receivable. Don’t include non-patient accounts receivable, money from the 340B drug program (unless it’s tied to a patient in your system), or capitation and premium revenue from value- or risk-based contracts. Keep it simple and stick to patient-related stuff!

Cost to collect:

Always remember one thing: you need to keep an eye on your cost to collect. This number shows how well your revenue cycle is working. HFMA says it’s a great way to track how efficient and productive you are. If it’s low, you’re doing a good job collecting money!

You can find your cost to collect KPI by dividing your total revenue cycle cost (that’s on the income statement) by the total patient service cash you’ve collected (that’s on the balance sheet). It’s like figuring out how much it costs you to get the money you earn!

You must include the revenue cycle costs mentioned below:

• Expenses associated with patient access
• Patient accounting costs
• Costs for health information management

You need to include certain costs when figuring out your total revenue cycle cost. These costs, says HFMA, include things like salaries, benefits, subscription fees, payments for outsourced help, software maintenance, extra application costs, IT expenses for the revenue cycle, record storage, contingency fees, and transaction fees. Basically, anything that helps run your revenue cycle needs to be counted!

Clean claim rate:

You want to know your clean claim rate, which is how many claims get through without needing any help or corrections. You can find this by looking at the number of claims that go into the billing tool and get accepted. HFMA says this includes primary, secondary, and other claims. But, it doesn’t count claims that have warnings, ones sent directly to third-party payers, or those that get flagged for print and hardcopy submission.

Always remember, that you need to divide the number of claims that get accepted into the billing tool by the total value from the data you just looked at. This includes primary, secondary, and other claims, plus claims that need help other than just printing. But it doesn’t count claims sent straight to third-party payers or ones flagged for print and hardcopy submission.

You know handling healthcare accounts receivable services can be really tough if you don’t have enough help. That’s where Sun Knowledge Inc. comes in! You can let us take care of your accounts receivable services, so you’re not stressed out. We cater to various specialties starting from but not limited to :

• O&P
• Cardiology
• Gastroenterology
• Sleep Studies + CPAP
• Physical Therapy
• Specialty Pharmacy
• Radiology + Imaging Centers
• Neurology + Brain Clinics
• Fertility and more

You don’t have to worry about getting paid on time anymore! Our awesome team is here to help you collect both be it aging accounts receivable or new payments for your healthcare organization. We guarantee a reduction in your accounts receivable bucket by 30% in just one month! Plus, we’ll save you money on labor and admin costs.

Schedule a call today with one of our healthcare accounts receivable services experts to know more about comprehensive accounts receivable services!