How RCM top performers stay ahead of the curve

While healthcare organizations often take similar approaches to revenue cycle management, the financial top performers distinguish themselves in several ways, including their approach to charge capture activities.

During an Oct. 29 webinar sponsored by Ingenious Med and hosted by Becker’s Hospital Review, Bryan Goble, director of product management at Ingenious Med, discussed healthcare organizations’ approaches to revenue cycle management, as well as the ways in which RCM top performers differ from other organizations.

The webinar was largely informed by a July to August survey conducted by Ingenious Med through a third-party agency. The findings shed light on the front-end processes of financial RCM, namely professional fee charge capture. The 40-question survey polled 104 respondents from hospitals, health systems, physician management organizations, and independent physician practices of different sizes and geographical locations across the U.S.

survey poll hospital results

Around 75 percent of respondents worked in a hospital or health system, and around 50 percent were C-suite executives. All respondents had direct or supervisory involvement in the revenue cycle management process. In an effort to make this a true market survey, only five respondents were current Ingenious Med customers.

“Depending on the organization type and revenue cycle strategy, we see a number of different approaches to front-end revenue cycle,” said Goble. “Each of which offers their own set of benefits and drawbacks.”

A snapshot of charge capture activities

The survey found that about 84 percent of healthcare organizations use EMRs to meet at least some of their charge capture needs, about 28 percent primarily use a standalone charge capture solution, and 27 percent still use paper in some capacity.

“It’s rare for any one solution to fit an organization’s total needs,” Goble said. “More frequently than not, there is a mix of technologies and processes in play.”

A majority of respondents said charge capture is essential to their organization’s success. However, there were three takeaways from the survey that seemed to undermine this professed importance:

  1. Organizations do not seem to be talking about charge capture activities very often.
  2. Very few respondents said they would recommend the charge capture solution currently used at their organization.
  3. Organizations using paper or EMRs to meet their charge capture needs generally aren’t looking at — or even aware of — alternative standalone solutions.

Thus, there appears to be a disconnect between how important organizations perceive charge capture to be, and the steps actually being taken to ensure charge capture activities are efficient.

doctor using paper records

What sets top performers apart

The survey illuminated the difference between top performers in front-end RCM processes and the rest. Top performers were survey respondents at organizations that ranked in the top 20 percent for the following revenue cycle benchmarks:

  • Charge lag
  • Bill lag
  • Average time in A/R
  • Denial rate
  • Percent under-coded
  • Percent over-coded

Some key findings include:

  1. Top performers had an average charge lag of 1 to 24 hours and a bill lag of up to 3 days.
  2. A vast majority of respondents said their organization’s average time in A/R falls between 30 to 60 days. However, many top performers reported A/R time of less than 30 days.
  3. Top performers’ average denial rate was less than 3 percent, and their percent under-and over-coded was often less than 1 percent.

Coding activities still trial and error for many organizations

The survey also delved into coding practices at respondent organizations. The number of coders varied among different organizations, with around 48 percent of top performers employing zero to four coders and 30 percent of them employing 20-plus coders. Non-top performing organizations had similarly mixed coder numbers — close to 40 percent employed 20-plus coders, while around 60 percent had between zero and 19 coders.

hospital biller works with doctor

“A majority of organizations struggle to find the right balance between using internal and external resources to quickly and efficiently code, follow-up, document, and bill for services,” Goble said. “Some choose to increase the size of the coding and billing department, others choose to outsource. But using our top performers as a benchmark, we can see that more coders does not necessarily ensure better results.”

The most common revenue cycle KPIs and best practices for success

When asked what the financial key performance indicators at their organizations are, survey respondents reported the following:

  • Net days in A/R: 83.65%
  • Denial rate: 70.19%
  • Denial write-offs: 52.88%
  • Cash on hand: 46.15%
  • Independent physician performance: 41.35%
  • Charge lag: 40.38%
  • Cost to collect: 38.46%
  • Capture charges & bill reconciliation: 32.69%
  • Independent location performance: 27.88%
  • Missed billing opportunities: 21.15%

“Our findings indicate little difference between top performers and the rest on these fronts, because regardless of how successful organizations are, everyone is primarily measured by the same things,” Goble said.

Much like KPIs, organizations are implementing similar best practices. These include patient satisfaction surveys, analyzing physician productivity, coding and/or compliance audits, analyzing site/location performance, and coding training tools.
More specifically, however, top performers are focusing on coding training, regular review of charge capture processes, analyzing physician performance, and physician access to performance insights.

“Since top performers are implementing these best practices more often than the rest, we can infer that these activities are having a greater impact on their revenue cycle performance,” Goble said. “Top performers also are implementing standalone, mobile-enabled charge capture solutions that empower physicians, provide actionable analytics, and automate the charge capture process.”

You can view the full webinar here.

How much revenue might you gain with better charge capture? Request an Ingenious Med demo today.

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