Be aware of the most important metrics in the revenue cycle management
Many business people and professionals worldwide these days think about an array of factors associated with the revenue cycle management. They have decided to enhance every aspect of their routine efforts and achieve their finance goals without any delay. If they understand and make sure about the most efficient management of the revenue cycle on a regular basis, then they can get a notable improvement in the overall success of their business without a doubt. The revenue cycle management process manages the overall claims processing, payment as well as revenue generation and entails the efficient use of advanced technology designed to keep track of the complete claims process at al check points. It is the most suitable time to take note of the Revenue Cycle Management Metrics and start a step to improve the business within a short period.
There are many measurements used to make certain about the peak level of the financial performance. Days in Accounts Receivable are one of the most important Revenue Cycle Management Metrics at this time. The current practices are unclear in terms of the correct calculation and analysis of some significant indicators like days in accounts receivable. If you face this uncertainty related challenging things at this time while examining the overall financial metrics, then you have to decide on how to calculate the days in accounts receivable. You can calculate the days in accounts receivable when you divide your complete current receivables, net of credits by the average daily charge amount of the practice. You have to subtract the current credit balance from the current total receivables to net the credits.
The percentage of accounts receivable greater than 120 days is a leading key metric in the management of the revenue cycle. This measure of ability of the practice is used to get all services paid on time. This figure only represents total amount of receivables greater than 120 days. This figure is expressed as the overall percentage of the total current receivables of the practice. The aged trial balance includes the accounts receivable over 120 days. An easy way to calculate the percentage of accounts receivable greater than 120 days is to take the dollar amount of receivables, net of credits greater than 120 days and divide such number by total receivables and net of credits.
An adjusted collection rate is the first-class and mostly used key metric in the revenue cycle management process. This rate is a measure of effectiveness of the practice to collect all legitimate reimbursements. This measure shows the percentage achieved out of the reimbursement allowed as per the contractual obligations of the practice. This figure is very important to know the total revenue lost because some factors such as untimely filing and uncollectible bad credit. The denial rate is the key metric of the management of the revenue cycle. This figure is the percentage of the claims denied by payers. If this number is low, then the cash flow of the practice is good. Denied claims only require the manual intervention.
