IHP 630 Module 7-1 Analyzing KPI's

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Southern New Hampshire University *

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Feb 20, 2024

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1 Southern New Hampshire University IHP 630 Module Seven Activity Belkisa Alic January 23, 2024

2 Revenue-Cycle Dashboard Let’s begin with understanding what KPI is. “A Key Performance Indicator (KPI) is a measurable target that indicates how individuals or businesses are performing in terms of meeting their goals. Reviewing and evaluating KPIs helps organizations determine whether they are on track for hitting their desired objectives. By looking at several key indicators, which may include categories such as profits, sales numbers, employee turnover and average annual expenses, businesses can identify successes, as well as what is not working. Analyzing KPIs on a regular basis provides a solid overview of how well a business is performing, which allows the folks in charge to decide if current operations should be continued, or if a change of strategy is needed (Hennigan, 202 3).” As previously discussed, we know there are three parts to the revenue cycle; frond-end, middle, and back-end. Each of these areas has its own indicators that is responsible for their areas which affect the KPI. The front-end cycle is responsible for registration, appointments, insurance verification, and copayment collection. “The middle-end is responsible for the transition phase between appointments and claims (LaPointe, 2017).” Now we get to the back- end which is responsible for claims management, submissions, and financial responsibility. (LaPointe, 2017) Each of these revenue cycles has its own KPI’s they need to meet. In the front- end process the staff needs to make sure they are verifying insurances, and col lecting copayments as these are the two important metrics that can be measured not just for the amount of workload but for the purpose of correcting claims when ins urance is incorrect, and making sure the copayments are collected as this affects the revenue for the clinic/hospital. As the middle-end process their role is important tin maintaining documentation of codes an d making sure they get all the necessary documentation needed to submit claims or resubmit. Accuracy is

3 key in making sure the claims get paid. With the middle-end team obtaining clinical documentation and checking for coding errors this ties in with the back-end cycle because they are the ones who submit for the entire claim. If any coding is incorrect, missing documentation, incorrect insurance, or demographics the claim will be rejected. The KPI is affected by both sections of the revenue cycle because of the amount of denied claims which would indicate that the performance of the department is not up to standards. Front-End KPI’s As we look at the overall front-end process scheduling, demographics, insurance verification, and copay collection each of these are very important to in the operational standpoint of any facility. The KPI is measured with each of these aspects to see how the performance of the clinic is currently standing. The KPI is very important as it measures the number of errors made, revenue intake, denied claims, missed appointments, and even the number of possible appointments that could have been made but were not. This process is critical to making sure the facility maintains operation, does not lose revenue, and maintains its KPI. There are facilities and providers within the medical field who have a fee for no-show appointments, or last-minute cancellation. There are also facilities who charge a fee to page an on-call physician after hours. These practices ensure that the patient would keep their appointment, and minimizes revenue loss for the provider, in turn when minimizing the amount of no shows or cancellations this allows an additional area for increase in revenue for the facility. Small changes and steps ensure patient responsibility, provider availability, opportunities to bring in more staff, and making changes to the current front-end cycle that would lessen the workload of the staff for circling back to try and contact patients who have missed their

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4 appointment. Providing a small type of service such as a charge for missed appointments holds responsibility on the patient themselves. Middle KPI’s Cash-flow issues and operational improvements can always strengthen and develop in any of the stages of the revenue cycles. An article written by Advantum Health explains middle revenue cycle as the following: “First, to receive appropriate payment for their services, healthcare providers must have a strategy to capture all relevant clinical information related to their patient’s care. This practice is commonly called Charge Capture. Charge Capture encompasses the physician order process for treatment, tests, and referrals. It relies on accurate physician order entries supported by a comprehensive charge master database, or Charge Description Master (CDM). Next, a person or system assigns codes to each service provided to the patient. These codes must accurately correspond to the patient’s diagnoses and procedures associated with the respective service. This process is commonly called Coding Diagnoses and Procedures. Lastly, the Clinical Documentation phase validates that the provider orders, notes, and all associated documentation supports the services provided. Otherwise, insurance companies can withhold payment.” We know that in the middle revenue cycle the KPI is measured by the number of claims that have not been denied. Being able to demonstrate proper clinical documentation, coding, and registration helps minimize the number of denials. With each of these steps done properly it helps the facilities not lose revenue. When charges are dropped for the services rendered, we must be able to catch the incorrect coding during audits to maintain denial numbers down. Many

5 patients an entities outside the healthcare industry do not understand how important it is to make sure that when we collect documentation, correct coding, and submit claims we must utilize the process of KPI’s as this helps the organization determine how many coding errors have been made, how many denials occurred, how many denials got resubmitted and paid for, and how many claims were correct from the first step. Knowing our metrics helps the organization know where to make corrections and if additional training is needed for staff and providers. Back-End KPI’s “The back office of a healthcare provider manages the accounts receivable, collections, and financial reporting processes for a medical group or practice. Back-office RCM KPIs may include:  Measuring the time taken for collections  The efficiency of accounts receivable (AR) processing  Net collections  Denial rates  Writing-off bad debt These KPIs ultimately lead to increased revenue, reduced costs, and more efficient operations. A 2020 survey conducted by the Healthcare Financial Management Association found that providers who used technology to improve back-office RCM functions had better financial performance and lower denial rates than those who did not. The survey also found that using analytics and automation in RCM processes was associated with higher clean claims rates and faster collections. By having efficient billing and collections processes, healthcare providers

6 can free up time and resources to focus on delivering better healthcare and achieving better patient outcomes (Accesshealthcare, 2021).” An overall review is by utilizing the back-end revenue cycle this helps not only physicians but also hospitals make decisions based on date to improve revenue, profitability, all while maintaining the highest quality patient care. Utilizing RCM and having all the teams/people in place helps the process of all the steps to go smoothly from registration, insurance verification, charge captures, claim submitting and reimbursement . each of these steps is important to be able to run a business while we focus on the care we provide. Metrics Analysis Overall view on metrics analysis is to help any business or organization set goals which they need to achieve or try to get as close as possible to the target. With having metrics, it will help maximize the overall growth of the business. Healthcare organizations utilize metrics to analyze reimbursement, payments, loss (write-off), charge capture, work revenue, denials, new patient referrals, and other areas as well. If the metrics are lower than what the goals that were set then it notifies the appropriate team, and the organization of where they need to improve on and how to fix the area where they may be struggling in. for example, if we have a large number of write-off’s this would affect the organization in a negative impact as they are losing revenue and now they are losing from the profits they have made.

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7 References L aPointe, J. Exploring Key Components of the Healthcare Revenue Cycle retrieved from https://revcycleintelligence.com/news/exploring-key-components-of-the-healthcare- revenue-cycle What is Healthcare Revenue Cycle Management? Retrieved from https://advantumhealth.com/what-is-healthcare-revenue-cycle-management/#:~:text=The %20middle%20revenue%20cycle%20processes,a%20billing%20claim%20is %20generated . Revenue Cycle KPI’s for Physician Practices and Medical Groups retrieved from https://www.accesshealthcare.com/resources/whitepapers/revenue-cycle-kpis-for- physician-practices-and-medical-groups#:~:text=The%20Mid%2Dcycle%20KPIs %20demonstrate,practice%20could%20have%20otherwise%20lost . Tracking for Success: How analyzing marketing metrics can propel growth retrieved from https://concentrek.io/article/how-analyzing-marketing-metrics-can-propel- growth#:~:text=Metrics%20analysis%20starts%20with%20setting,maximize%20your %20overall%20business%20growth . What is A KPI? Definition and Examples retrieved from https://www.forbes.com/advisor/business/what-is-a-kpi-definition- examples/

IHP 630 Module 7-1 Analyzing KPI's

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