Ask a Revenue Cycle Leader is a new series featuring insights from health system and hospital revenue cycle executives nationwide. Becker’s poses questions on the most pressing issues in healthcare finance — from payer relations and automation to workforce and patient experience. We welcome responses from all revenue cycle, finance and reimbursement leaders.
Question: What is your favorite KPI and why?
Editor’s note: Responses were lightly edited for clarity and length.
Dan Angel. Vice President of Revenue Cycle at Baptist Health Care (Pensacola, Fla.): By far throughout my career, the daily cash collection report is my favorite and most important report. In revenue cycle, cash drives every other major KPI (Days in AR, Aging %, write-offs, etc…). A strong organizational balance sheet is imperative, especially with some of the volatility in reimbursement in our industry.
Because of this, at Baptist, we make sure this is the first morning report visible to our team and key leaders in the organization. This helps us drive our priorities around payer strategies, denials prevention and other revenue cycle functions. There is nothing more exciting than seeing a strong cash number to the projected goal first thing in the morning to give us momentum throughout the day.
Jennifer Armendariz. Vice President of Revenue Cycle and Managed Care at Valley Children’s (Madera, Calif.). Currently, my favorite KPI to track is aging greater than 90 days. Given the increasing payment delays and pressures from health plans, this KPI helps us monitor payer behavior and allocate resources to target AR issues more effectively.
Joanna Caballero. Corporate Vice President of Revenue Cycle at Scripps Health (San Diego). I am going out on a limb and will pick two, AR days and final denial rates. Why this pair? Looking at AR days AND final denials reveals effective revenue cycle work (decreasing AR balance driven by successful collections) versus simply removing accounts from the books.
If I had to pick only one, AR days it is. AR days serves as a barometer for the entire revenue cycle; it is a cumulative impact of patient access, coding, charge capture, billing, denial management and payer performance (to name a few!). Usually when AR days improve, it means collaboration across multiple teams is working well.
Blake Evans. System Vice President of Revenue Cycle at Rush University System for Health (Chicago): That’s a difficult question because no single KPI tells the full story of revenue cycle performance. It takes a combination of leading indicators, such as authorization secured rate, clean claim rate, initial denial rate and POS collections, and outcome indicators like AR days, bad debt write-offs and final denial write-offs to gain a complete understanding of operational effectiveness.
If I had to choose one KPI, it would be the net collection ratio (NCR). I consider NCR one of the best measures of overall revenue cycle success because it evaluates how effectively an organization collects the reimbursement it is contractually entitled to receive. A strong NCR reflects the collective performance of patient access, coding, billing, denial management, and collections, making it a comprehensive indicator of the health and effectiveness of the entire revenue cycle.
Scott Smith. AVP of Revenue Cycle Back-End Operations at UT Southwestern Medical Center (Dallas): One of the key performance indicators I consistently highlight is our Insurance net collection ratio. This metric is fundamental to understanding the efficiency of our revenue cycle, as it precisely measures our ability to collect the full expected reimbursement from our payers. We dedicate significant effort to ensuring the accuracy of expected reimbursement figures within our EHR system. This meticulous approach provides us with a high degree of confidence in the reliability and actionable insights derived from this critical metric.
Next question: What does the revenue cycle leader of 2030 need to know that today’s leaders don’t? If you are interested in responding, please send responses to Andrew Cass at acass@beckershealthcare.com.
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