How Physician Practices Can Improve Revenue Cycle Visibility

Many practice owners know how many patients they saw last month but not how much of that work turned into cash, or how long it took. Revenue cycle visibility means being able to answer those questions quickly and reliably.

Why visibility gets lost

• Billing is handled by a billing company or a small in-house team, and reports arrive in different formats each month.
• The practice management system, clearinghouse, and accounting software each show a different number.
• Collections are reported in total, not by payer, provider, or location.

Measures to review every month

• Days in accounts receivable: how long it takes, on average, to collect.
• Aging over 90 days, by payer: where balances are getting stuck.
• Clean claim rate: the share of claims accepted the first time they're submitted.
• Denial rate and top denial reasons: what keeps going wrong.
• Net collection rate: payments received divided by what you were entitled to collect after contractual adjustments.
• Charge lag: days from the patient visit to the charge being entered.
• Time-of-service collections: copays and balances collected at check-in or check-out.

Trends matter more than any single month. Compare each measure with your own history and look for changes.

The front end sets up the back end

Eligibility checks, prior authorizations, accurate patient information, and copay collection at the front desk prevent many of the denials and delays that show up weeks later.

Reconcile from encounter to deposit

1. Encounters to charges: confirm every visit generated a charge.
2. Charges to claims: confirm every charge was billed.
3. Claims to remittances: compare each payment to the expected amount. See how to identify billing and remittance discrepancies.
4. Remittances to deposits to the general ledger: confirm the money arrived and was recorded correctly.

Working with a billing company

If you outsource billing, agree on a standard monthly report package that includes the measures above, by payer and provider. An independent reconciliation of their results against your bank deposits and books gives you confidence in what they report.

Learn more about our physician practice financial management and revenue cycle management services.