Top KPIs for Revenue Cycle Management in Behavioral Health
Key performance indicators (KPIs) are an important part of any healthcare provider model, and behavioral health is no exception. These critical measurements give instant insight to business managers and allow them to determine how the facility is performing financially.
To ensure top KPI’s and to give effective customer relationship management, behavioral health providers rely on healthcare claims and collections to ensure continuous operations, knowing when certain aspects of the facility aren’t performing up to par is crucial.
Behavioral health providers can use KPIs to help improve and make strategic adjustments to their business model, leading to improved collections and revenue.
Thus, having techniques in place to assess performance on a regular basis can help facilities ensure business objectives are met. KPIs provide a quantifiable and measurable insight into overall behavioral health goals.
What are some of the top KPIs that behavioral health centers should measure?
A behavioral health center can design a KPI reporting structure that provides regular measurements of financial and operational performance. Statistics can be designed to meet the unique needs of each facility. Some of the more common KPIs used in the behavioral health sector include:
Bill Charge Lag Times
The bill charge lag time KPI is used to measure the amount of time it takes between a healthcare service being provided and when it is entered into the billing system. If there are delays in billing, it will result in slower collections, which can affect the overall revenue cycle management of the behavioral health facility.
To ensure that bill charge lags are kept to a minimum, it’s best to establish a set of procedures to ensure billing occurs as quickly as possible. For example, the medical billing team can immediately enter services provided to the billing system once treatment has occurred. Ideally, this would happen within the same day as the service.
If behavioral health business management teams notice an increase in bill charge lag times, there is likely something wrong in the medical billing process. It’s important to get to the root cause of the issue before it becomes an ongoing problem.
Clean Claim Rates
A clean claim rate is used to determine the quality of the claims being submitted. Clean claims, or those that are error-free and don’t require manual intervention, are desired in the medical billing process.
If a billing team is spending lots of time redoing the claims or gathering additional information before they can be submitted to payers, there is likely a problem in data collection. For example, the appropriate services may not be indicated when sent to the billing team, or there may be missing patient information.
If the billing team is spending a lot of time reviewing data that should have been accurately input during the intake process, it can result in more time spent before claims can be submitted. Lower clean claim rates indicate that there is a problem in data collection that needs to be addressed.
Days Revenue Outstanding (DRO)
The Days Revenue Outstanding KPI is used to measure how long it takes for a behavioral health center to collect payment for services or treatments provided. This figure will be an average number of days. In some cases, insurance providers have set rules for paying healthcare providers. These rules may affect the DRO rate.
To understand the DRO KPI, your organization can look at the statistics in various ways. For example, you may review DRO by the insurance provider or by services performed.
You can also have an overall rate of DRO. If you see that DRO is beginning to track upwards, try to understand why. Establish a benchmark that you want to see for your revenue collections.
Accounts Receivable Aging
The accounts receivable aging KPI provides an indication of how long open accounts have been outstanding. When examined as a measurement, you can place your customer’s accounts into aging buckets, such as current, within 30 days overdue, between 30 and 60 days overdue, or over 60 days overdue.
The buckets that you use should be reflective of your normal policies. For example, if it’s common for your insurance providers to pay within 60 days of treatment, then accounts that are unpaid for less than 60 days would not be indicative of a collections problem. However, those that are overdue for longer than 60 days would be an issue.
Each aging bucket should have its own values associated with current accounts receivable. These values can be presented as a dollar amount or a percentage. Aging for accounts that exceed the normal collection threshold should be pursued, either through the insurance provider or the individual who received treatment.
Denial tracking is used by behavioral health centers to determine the percentage of claims that are denied by insurance providers. A high number of denials indicates problems in the medical billing process or with the provider.
If denials begin to increase, it’s important to understand the reasons for them. There may be incomplete documentation for claims submitted, or a provider may have terms that aren’t being met for claims to be reimbursed.
Behavioral health software can assist in increasing approval rates and monitoring claims denials. For example, you can use certain codes to indicate why a claim was denied. This approach will provide you with much more insight into the claims process and can allow you to make strategic decisions to reduce the number of denials that your facility receives.
Revenue Actualization Percentage
Revenue actualization is used to monitor the overall collection of monies for services performed. It is calculated as a percentage of monies received divided by total billing, and it is normally performed on individual claims and then aggregated into an overall percentage for the facility.
As an example, consider that your firm has billed $1,000 for a service to a patient. You collect $150 from the patient as their deductible, but the insurance provider sends only $800 for the balance. Thus, you will have realized $950 of the initial $1,000 revenue or 95%.
If you see that your facility is not collecting the full amount of its billings, you’ll need to determine the cause. In some cases, there may be certain agreements with insurance companies for certain services to be discounted.
It’s also possible that the deductibles collected from the patient are incorrect. This situation indicates a problem in the intake procedures.
Reimbursement Rates by Treatment Type/Insurance Payer
Another great KPI to track in the behavioral health field is reimbursement rates. You can track these by treatment and by the insurance provider.
Tracking reimbursement rates by treatment type provides greater insight into the medical billing coding function. If you notice a trend that certain services are being regularly denied, their codes may be incorrect or may not align properly with the patient’s diagnosis.
When tracking reimbursements by insurance payers, you can discover which insurance companies lag behind on their payments or are more likely to deny claims altogether. If certain insurance providers have lower reimbursement rates, you can ask your staff to determine why through an analysis of claims and the amounts that have been received.
This lack of payment may also be indicative of a coding problem, or there may be certain restrictions that the insurance company requires its claims to adhere to.
Average Treatment Revenue
The average treatment revenue measures how much a behavioral health facility charges by the patient. This KPI gives your healthcare center insight into the average fees billed to each customer. It can be used for cash flow forecasting or to indicate how many patients need to be treated to generate a range of expected revenues.
Average treatment revenue can also provide better insight into your facility’s financial performance. If the revenue that you charge does not cover average treatment expenses, adjustments may need to be made to the center’s cost structure to ensure profitability.
The readmission rate provides greater insight into patient treatment effectiveness. It indicates how often patients are readmitted to the facility for the same condition. If patients are continuously receiving the same treatments or services after the initial services were performed, there may be a problem with the effectiveness of the services.
Improving the effectiveness of treatments and services can be accomplished through enhancing patient care or trying new pharmaceuticals. In a behavioral health setting, other cognitive-behavioral treatments may want to be considered.
Overall Patient Satisfaction
While financial tools and their metrics are important for ensuring strong revenue cycle management performance, behavioral facilities should also consider the satisfaction of their patients. This analysis can be done by generating surveys or asking for feedback directly from clients.
When the results of your surveys indicate that patient satisfaction is generally high, they can be used as a marketing tool to promote your behavioral health clinic to others who may need the services and in turn build up your brand.
If your center has low patient satisfaction, there may be a problem with the facility or its staff. Low patient satisfaction should be addressed immediately to ensure that current patients are retained, and the practice continues to attract new ones.
Tracking KPIs for Effective Management
Sunwave Health offers all-in-one software designed specifically with behavioral health facilities in mind. The software includes a full set of KPI metrics to give better insight to business managers of health care centers. For more information, schedule a free demo to see how Sunwave Health can benefit your practice.