Can you believe that we’re already starting month five of the New Year? The year will be half over before we know it! Time does fly. By now most organizations have been executing on the strategies to make their budget numbers, and beginning to see if they’re on track to make them, but even the best strategies are supported by the basics.
With the thin margins and ever-increasing costs in our business, revenue and cash flow are especially critical. So let me ask you, is your revenue cycle performing at its optimum? Are you billing for all services that you provide? Are you getting paid as quickly and completely as you should? Significant leakage of revenue and cash flow will diminish the impact of even the most aggressive strategies.
In home care, speed and completeness of payment depends on capturing the billing for all services and then getting 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. When I think it through, I come up with 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), I would 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.
If you’re an operationally focused person like I am, you have fun “pulling levers” and watching the results. This is another opportunity to do that in an area of your organization that is as important as clinical quality and compliance.
If you have any questions, please feel free to reach out to me. I’d also love to hear what you did and how it turned out. Happy hunting!
Revenue Management Solutions provides revenue cycle outsourcing and support services to non-Medicare home health agencies. We provide full service revenue cycle management as well as collection projects and process consulting. Our Checkpoint Engagement service provides a review of an agency’s revenue cycle to identify opportunities for process improvements, the ultimate goal of which is to improve revenue, cash flow, and operational effectiveness. Please contact me for more information on our Checkpoint Engagement and other services.
About the Author: Phil Feldman, Vice President at Revenue Management Solutions, which provides revenue cycle outsourcing and support services to non-Medicare home health agencies. RMS Solutions