Adopting a proactive, results-driven approach to revenue cycle management will improve your ambulatory surgery center’s overall financial health. Regent RCM partners with ASCs to optimize billing and collection systems and implement solutions for ongoing challenges. In a series of blog posts, we are exploring some of the most common problems in revenue cycle management and how to solve them.
Revenue cycle challenge #5 is: benchmarking.
In 2017, Regent Revenue Cycle Management introduced ASC-specific benchmarks to address critical revenue cycle concerns. These benchmarks evaluate performance across all functions of an ASC’s revenue cycle. Establishing these metrics — and the tools and resources to meet our high standards — has led to remarkable financial improvements for the centers we work with.
“I don’t think you can strive for performance improvement until you know where you’re trying to go and until you can accurately measure where you are,” said Erin Petrie, RCM Director of Revenue Cycle Management. “Implementing benchmarks gives you a baseline to understand what process changes you need to make to get to your goal.”
Benchmark 1: A/R over 90
RRCM Gold Standard: 20% or less
Tracking Accounts Receivable (A/R) that are more than 90 days old can reveal problems with an ASC’s patient collections processes and/or insurance denials. Regent RCM originally measured this benchmark combining gross and net A/R, but now we calculate all collectible A/R, taking contractual write-offs at the time of charge entry. This creates a more accurate benchmark.
Benchmark 2: A/R follow-up
RRCM Gold Standard: 95% of claims/ month
A/R follow-up tracks the number of cases with an open balance that a center makes additional inquiries about each month. The goal is to get billers and collectors to follow up with payers for at least 95% of open claims every month, which improves collections and decreases the percentage A/R over 90 days.
Benchmark 3: Claim/Charge lag
RRCM Gold Standard: 48 hours
Claim lag and charge lag metrics are very similar. Since claim lag measures the time between the date of service and the date the claim is billed out, and that is nearly instantaneous with today’s electronic claims processing, Regent RCM merged these two metrics.
Charge lag is the metric ASCs can easily improve; it measures the time between when the center receives coding from the coding company and when those charges are entered. Ideally, charges are entered for billing on the day of service, but our gold standard is within 48 hours to allow for any issues that arise.
Benchmark 4: Statement lag
RRCM Gold Standard: 48 hours
Statement lag measures the time elapsed between when a center receives information from a payer about a patient’s financial responsibility and when a statement is sent to the patient. Because patients often bear more of the financial burden, due to high-deductible plans, generating statements quickly is important for an ASC’s revenue cycle.
Benchmark 5: Clean claims
RRCM Gold Standard: 98%
A high clean claims rate keeps denials low. Regent RCM increased this benchmark from 97% to 98% in 2017, and we use a clearinghouse to provide data about whether claims contain all the correct info before going out to payers.
Benchmark 6: Denials
RRCM Gold Standard: <5%
By tracking and measuring denials over the course of two years, Regent RCM monitored why claims were being denied for different payers and adjusting procedures to minimize future denials. In 2019, we updated our benchmark from less than 10% to less than 5%.
Benchmark 7: Net collections rate
RRCM Gold Standard: >97%
The net collections rate is the percentage of payment (how much a center collected), compared to the contractual amount (how much a center was supposed to collect). Ideally, a center should collect 100% of the contracted amount, but our gold standard is 97%. If a center’s percentage is low, it may mean that the collections department isn’t fighting hard enough for what they are owed.
Learn more about how your ASC’s metrics measure up, and how Regent RCM can improve them.