Revenue Cycle Scorecard

Measurements serve two key purposes in any organization, one to drive performance analysis and improvement, and two to provide measurement for motivational purposes. Precise and actionable measures are therefore a key component for any high performance organization.

In order for revenue cycle scorecards to be truly useful, they must:

• Directly measure the operational performance of the revenue cycle, net of the impact of other organizational units
• Be precise (numerators and denominators of measures should have the same opportunity set)
• Be auditable to the account level (for each data point an audit list containing all accounts making up the data element should be provided)

Most revenue cycle scorecards in use today provide leadership with the standard revenue cycle measures such as days in A/R, total cash received and cash as a percent of net 30 (or 60) days ago. These traditional measures have been in use for a long time, but they leave most revenue cycle leaders with fundamental performance questions.

The issue with these traditional measures is their inherent lack of precision, since many of these revenue cycle measurements do not actually measure revenue cycle performance per se, but rather a combination of revenue cycle performance and the impact of accounting decisions, further compounded by payer mix issues.

The measure of A/R days provides a great example of this confounding of causes; high A/R days could be caused and / or ‘addressed’ via bad debt write offs or by actual revenue cycle performance. This mixture of potential causes located significantly inhibits the usefulness of those traditional metrics. Furthermore, the A/R days metric is an estimate based on imprecise measurements of multiple numbers so there is no ability to drill down and analyze systemic issues. This prevents the organization from developing business literacy and driving continuous improvement.

Another example is the measurement of Time of Service Collections as a Percent of Potential. With patient liabilities rising to as much as 20% of the total liability and patient liability defaults as high at 70% after receipt of services, time of service collections and their associated measurement are instrumental in the management of the revenue cycle. Traditional measurement methods generally utilize estimates of the potential time of service collections while our methodology allows for precise calculation thereof.

Our revenue cycle scorecard utilizes patent pending measures that completely isolate revenue cycle performance from the impact of other organizational units such as accounting. Furthermore these measures are normalized such that true organizational comparisons can be completed. For example, the metrics are determined in such a way that payer mix, nor volume changes do not impact the performance measurement, thus providing a true comparison.

Our revenue cycle scorecard product receives account and transaction level data from your revenue cycle patient accounting system and aggregates the new generation revenue cycle measures for each organizational unit in your revenue cycle. As part of the service package, the director and manager level is trained in the use of the new metrics and is provided a scorecard and the respective audit lists on a monthly basis. Anonymous cohort comparison data is also provided to inform your revenue cycle leadership team of the exact performance in comparison to other revenue cycle scorecard participants.

For more information please contact us.

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