Benchmarking revenue cycle performance is an important practice. It helps managers keep track of where they stand compared to the rest of the market, and it allows you to see where there are opportunities for improvement. Without benchmarking, practices can fall behind, and in worst case scenarios, close their doors or get bought out by bigger organizations.
Metrics for Benchmarking Revenue Cycle Success
There are several ways to benchmark revenue cycle success and measure performance. These are a few of the ways that we help our clients measure their revenue cycle.
1. Encounters Per Hour
Encounters per hour is the average number of encounters that a coder can process per hour. A higher rate of encounters per hour shows that your revenue cycle staff is working efficiently. Our top performing practices can reach up to 228 encounters per hour with automation.
2. Encounter Change Rate
This is the percentage of encounters that your coders stop to make changes on. If you have a high encounter change rate, that means that your revenue cycle is slower than it should be. Coders should not have to stop and make changes on every single encounter. This may reveal a need to retrain the physicians, or it may reveal a need for more automation in your charge capture process.
- 52% is the average encounter change rate among White Plume clients
3. Encounters Completed Same Day
Measuring the percentage of encounters that are processed the same day shows your success at moving charges quickly through the revenue cycle. Practices should aim for as close to 100% as possible on this metric to improve cash flow for their revenue cycle.
4. A/R Days
Healthcare organizations should aim to keep net A/R days below 50 days, but any value between the 30- to 40-day range also indicates efficiency.
5. Clean Claims Rate
The clean claims rate is the percentage of claims that do not require edits before submission to payers. According to HFMA, healthcare organizations should aim for a 97% clean claims rate.
6. Denied Claims Rate
This is the percentage of claims that get denied. The industry standard for claims denial rates is 4 percent or below. Knowing how often your claims get denied helps identify if you have a problem, but it’s important to have a more thorough follow-up process to identify why those claims are getting denied. That is the only way to make changes to improve your denial rate. Check out our list of denial codes and reasons to identify where your practice needs to make improvements.
These are just some of the ways that your healthcare organization can benchmark success. For deeper insight into the success of your revenue cycle, consider investing in advanced revenue cycle analytics. These analytics will be able to tell you not only your encounters per hour or encounter change rate, but it will tell you exactly which types of encounters you are making the most changes on. It can even tell you which edits your coders are ignoring, or opportunities where you need to include more edits.
To measure how your revenue cycle is performing, try our free revenue cycle calculator.