By Mike Orseno, VP of Revenue Cycle
One of the toughest challenges for any surgery center is determining if your revenue cycle is performing well. Why? Until now, there wasn’t a comprehensive list of benchmarks, and how they should work together. Every day we hear stories of centers using hospital or physician metrics to try to gauge success. This doesn’t work because the case-mix is most likely different, as are the contracts. Rather than help, these comparisons cause confusion. For years, the Regent RCM team and I have searched for standardized measurements to judge the work we do. Finally, we realized the best place to look was our own data and our own standards. Each day, each month, and each year we measure our RCM performance based on 9 metrics. We know, from the many centers we service, what the “before” results were and how we have been able to improve and maintain results. We aggregate these numbers to find the best-in-class performers which we call the Regent RCM Gold Standard. Below is a list of the benchmarks we use and a link to a series of videos that go a little deeper into the ways these numbers can be improved, why they might fluctuate, and how they can often lie. The nine benchmarks Regent RCM uses to gauge the health of an ASC’s revenue cycle include:
- Days Outstanding – The Regent RCM gold standard is less than 30 days but can fluctuate depending on outside forces, such as case mix, payer mix and whether or not the center is in-network. This metric does not mean a whole lot on its own, and it can often lie. You strive for this number to be low, but if the net collections rate is also low, there is a problem.
- % A/R over 90 Days – It is important to measure % A/R over 90 because this can highlight issues with patient collections processes and/or insurance denials. The Regent RCM gold standard is 12%.
- Charge & Claims Lag – We group these together because charges should be entered as soon as they are coded and claims should be sent the same day. Charge Lag is defined as DOS to Charge Entry Date, while Claim Lag is DOS to Bill Date. Coding and physician dictation could be contributing to slow turnaround times or the billing department could be holding claims or entering charges but not sending them out. The Regent RCM gold standard for each is less than three days.
- Statements Lag – Simply put: Send patient statements, and send them often. Defined as the date a balance becomes a patient’s responsibility to the time the statement is sent, the Regent RCM gold standard is five days. Although it is recommended that patients be put on a 30-day cycle, statements should be run at least once per week.
- Denials & Clean Claims – While no one can achieve a 100% clean claim rate, proper coding and using a robust clearinghouse to scrub claims prior to submission are paramount for achieving the Regent RCM gold standard – less than 5% denials and 98% clean claim rate.
- Net Collections Rate – The NCR is measured on INN claims only, and is defined as how much you collected (payment) of what you were supposed to collect (contractual amount). If your center’s percentage is low, itmay be a sign that the business office is accepting whatever the third party pays and not fighting for what is rightfully (contractually) yours. This is where you often hear the saying ”solely relying on low hanging fruit.” The Regent RCM NCR gold standard is 97%.
- Staffing FTEs per 1000 cases – More staff doesn’t equal more efficiency – training is the key. The Regent RCM gold standard dropped from 1.85 in 2010 FTEs to 1.5 FTEs in 2014.
Click here to watch the first video in the ASC Benchmark series and learn more about the metrics that gauge the health and success of an ASC’s revenue cycle.