Healthcare is changing. From facilities having to transition from paper to EHRs, to the introduction of CMS’ 5-star quality rating system, long term care facilities have been forced to keep up with the times. One of the ways leaders and administrators keep track of the efficiency of their facilities is by looking at their revenue cycle key performance indicators using their long term care software. Revenue cycle key performance indicators can be a great way for one to understand the overall RCM performance of the facility, its strengths, weaknesses, and areas of potential improvement.
Benefits of Revenue Cycle Point Software
Most physicians and nurses enter the healthcare industry with the goal of helping patients and residents. They strive to provide the best care and track their care plans using care plan software. However, healthcare is ultimately a business, and financials need to be tracked. This can be done using revenue cycle point software solutions, which, as Compulink notes, offer a variety of benefits:
- Improved billing and collection cycles: Through the use of this nursing computer software, nursing home administrators can be certain that their billing gets the attention it needs.
- Improved the residents’ experience: Bills can be a source of confusion to resident and their families, especially when they are faced with unexpected service expenses. An efficient revenue cycle point software can help with streamlining the tracking of residents’ funds, making it easier for residents, their families, and staff to better understand the billing of services provided.
- More time: Financial reporting, budgeting, and the generation of projections can be time-consuming. When a billing department is stretched thin, residents and their families spend more time airing their grievances to nurses and physicians. The nurses and physicians are, in turn, forced to spend time alleviating these concerns, which takes them away from caring for residents. An efficient long term care software can save staff time spent on billing, making the accounting process much smoother. This, in turn, frees nurses, as residents and their families are able to get detailed billing reports in a timely manner.
- Better records: A good revenue cycle point software should work seamlessly with other nursing home software, keeping all resident records up to date with real-time updates. When a nursing home uses such a software provider, they can expect all their records to be in one unified system, with easy to generate reports.
- Training resources: Nursing homes tend to have to train their staff on best practices in order to remain compliant with regulations. The best long term are software vendors provide software updates, features, and free training courses that help nursing homes stay compliant with regulations. This saves on time and money that would otherwise be spent on external training.
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7 Steps to Improving Revenue Cycle Management
Revenue cycle key performance indicators are essential for nursing homes and other long term care facilities, as they help administrators determine the financial health of their facility. Greenway Health notes that some of the RCM metrics worth tracking include:
- Days in accounts receivable (A/R): This represents the average length of time it takes for a claim to be paid.
- Clean claims ratio (CCR): This is the percentage of clean claims or claims paid at first submission. A high CCR means a facility gets paid faster. NCG Medical recommends the following best practices for boosting clean claims:
- Update resident information often, as inaccurate resident data leads to denials
- Focus on timelines to ensure claims are submitted within the payor’s expected filing window
- Make quality checks and corrections to resident data
- Re-check modifiers when it comes to medical coding
- Denial rate: This enables leadership to identify how many of a facility’s claims were denied. To calculate the denial rate of a facility, take the number of claims denied and divide it by the number of billed claims.
- Bad debt rate: To calculate this, divide the monetary amounts written off by the allowed charges.
- Net collections ratio: This is the total reimbursement collected, expressed as a percentage of the total allowed amount.
- Gross collection rate: Though not as useful as the net collections ratio, it can still serve as a useful KPI in the revenue cycle healthcare system. Staff can calculate this by calculating the total reimbursement received from the total amount charged.
Now that we know what the essential revenue cycle key performance indicators are, we can look at some of the steps nursing home administrators can take toward improving revenue cycle management:
- Reviewing payor requirements and closely monitoring payments: One should always carefully read and understand all the payor billing requirements and their fee schedule. This involves understanding the services for which the resident is covered, the necessary codes, and the required documentation. Additionally, one should carefully look for underpayments or similar errors from the payor.
- Preventing claim denials: Preventing claim denials means paying attention to the eligibility and benefits of the resident, having the correct procedure codes, and keeping track of any new, changed, or deleted diagnosis codes.
- Prioritizing the reworking of claims: New claims are important, but old mistakes or denials should never be ignored. Reviewing denied or rejected claims is an opportunity for a facility to make the most of its revenue cycle. Hence one should always prioritize reworking denied claims in a long term care software system that can facilitate this process.
- Collecting what is owed: A nursing home should always verify resident insurance eligibility before admission and follow up on any claims to collect payment.
- Taking advantage of value-based reimbursements: Long term care facilities do not have to break the bank to deliver quality care and quality of life to their residents. Value-based care, according to Foresee Medical, is a healthcare delivery model where healthcare facilities receive payments based on patient or resident outcomes. Value-based programs tend to be some of the highest-paying opportunities for payor reimbursements.
- Getting expert billing help: Nursing homes need to have professional accountants as part of their billing team. Alternatively, a long term care facility can work with an expert RCM service, though this can prove to be costly.
- Using the best nursing home software: The best long term care software will come with financial modules that make revenue cycle management easier. These financial modules will generally include accounts receivable and billing, general ledger, and electronic eligibility checks for residents.
The Significance of Revenue Cycle Key Performance Indicators
Revenue cycle key performance indicators are important metrics used by nursing home administrators. A few small steps in the right direction— preventing claim denials, getting expert billing help, reworking claims—can go a long way in improving revenue cycle KPIs for long term care administrators.
Financial nursing home software can go a long way in improving a long term care facility’s revenue cycle management. The best long term care software can help nursing homes save time, improve their documentation, remain compliant with regulations, and ultimately increase their reimbursements.