Which tools & metrics really measure RCM performance? 2 hospital execs weigh in

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Health systems need to track their revenue cycle management performance in order to maintain healthy bottom lines, so it's important they determine which metrics work best.

Jake Hess, the director of revenue cycle reporting and analytics and integrations at Grand Rapids, Mich.-based Spectrum Health, said his health system found success by centralizing a reporting team specifically for revenue cycle operations and building a diverse set of reporting tools. 

"Spectrum Health has dashboards for various areas within the revenue cycle, and one of our most utilized is specifically tailored to the patient access space, allowing leadership to drill down specifically to each staff member to verify whether they are hitting their point of service," he said. "We have seen a dramatic increase in our collection rate with the use of this dashboard."

Mr. Hess said another key part of Spectrum's RCM tracking process is Epic’s Financial Pulse tool. He said the health system's RCM leaders meet on a weekly basis to discuss each metric the tool displays. If they need a deeper dive into these metrics, Spectrum has partnered with its Epic reporting team to have customizable dashboards for each area within the revenue cycle.

Spectrum has also started to utilize the Healthcare Financial Management Association's MAP  benchmarking tool, which allows the health system to compare its RCM performance against other hospitals, regardless of the type of EHR they use.

Mike Simms, the vice president of revenue cycle at Greensboro, N.C.-based Cone Health, said the key metric his health system uses is its cash collections goal, which is established based on patient net revenue over the last three months. 

Mr. Simms said his team also looks at the yield to see if the health system is collecting the amount it should based on allowed contractual agreements with payers. If it's not, that could indicate denial write-offs or contractual issues with payers.

Looking at denial write-offs as a percentage of net revenue is another important metric, according to Mr. Simms. He said this should not be more than 1.2 percent of a health system's net revenue.

"If you are over this goal, you have either authorization issues, medical necessity,or patient status issues that you need to research and develop trend analysis to determine internal or payer issues," Mr. Simms said. "Stopgap measures should be implemented including possible deferral of services if authorizations are not obtained within a few days of service."

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