4 Crucial Data Points to Track for Streamlined Medical RCM

The best medical practices balance exceptional care with complicated financial realities. This is why proper revenue cycle management (RCM) is so important, as it encompasses everything before, during, and after a patient’s visit that affects a medical practice’s ability to get paid. Effective RCM improves the patient experience while supporting your practice’s long-term financial stability.

Healthcare practices require clear data to support their RCM activities. With the right data management practices, your team can proactively plug revenue leaks and build a resilient financial foundation.

Improving RCM data tracking efficiency

To effectively track your financial data, your team needs easy access to core metrics. When creating an RCM strategy, prioritize data hygiene so you always have a clear picture of your financial landscape. Additionally, centralize your data in one place to make it easy for your financial team to track and ensure accurate reporting.

You can improve your RCM data tracking efficiency by:

Removing software gaps: Arcadia recommends healthcare practices regularly evaluate whether their current data technology stack creates administrative bottlenecks that hinder efficient reporting. Address blocked workflows to improve reporting speed.
Integrating systems: Consolidate your data systems into a centralized location. This makes it easy for your team to cross-reference information, avoids redundancy errors, and improves efficiency.
Standardizing data entry: When auditing your current tracking capabilities, create a standardized recording practice to synchronize data collection across departments.
Improving daily visibility: Pin essential metrics to your primary dashboard. This ensures your billing staff can easily access the most relevant metrics rather than digging through cumbersome reports.

Clean data allows your staff to spot and correct billing anomalies in real time. This immediate visibility creates a strong foundation for tracking essential financial metrics.

After incorporating these data management practices, establish a strategy to track the following data metrics to improve your RCM practices.

1. Clean claim rate

Clean claim rates (CCR) are the percentage of medical claims successfully processed and paid on the first submission. This metric provides your billing team with a clear overview of how successfully your practice submits its claims.

Calculate your CCR using this formula: Number of claims paid on the first try divided by the total number of claims within a specific reporting period

Medical Billers and Coders recommends that practices aim for a 95% or higher CCR. If your practice needs to improve its CCR, try these methods:

Implement regular audits: Routinely review a random sample of claims to catch common coding errors before large-batch submissions to prevent rejections.
Update your fee schedules: Ensure your system reflects the most current payer fee schedules and coding guidelines to prevent automatic claim rejections.
Train staff on specifics: Provide your billing team with training on the top claim errors that cause rejections in your practice.

A high clean claim rate lets practices speed up the collections process and reduces the manual work of resubmitting claims. Many medical billing software solutions automatically calculate this metric when providing reports. Monitor it to ensure your practice meets insurance compliance standards and improves your revenue collection success.

2. Days in accounts receivable

Knowing the average number of days it takes for a practice to collect payment for services rendered can help your billing team understand your organization’s liquidity and when you will receive funds. To track days in accounts receivable (AR), log the time a medical service is billed to the patient and the time the final balance is resolved, either by the patient or by the insurance provider. The duration the payment is pending is the number of days in AR.

If you notice large gaps between bill requests and payments, try these strategies to create a faster turnaround:

Automate payment reminders: Send automated text or email reminders to patients as soon as a bill is ready for their account.
Offer flexible payment plans: Provide patients with structured payment options, including a variety of payment methods and split payment options, to encourage consistent progress toward larger balances.
Expedite insurance follow-ups: Assign certain staff to follow up on outstanding insurance claims once they cross the 30-day threshold.

To improve your payment reminder system, group accounts by lifecycle stage to identify where payments typically stall. Target your payment follow-up reminders to older, higher-risk balances before they require external intervention.

3. Denial rate by reason code

Rejected claims create administrative bottlenecks and inflate your billing costs. Track your rejected insurance claims over time, by the specific cause of denial, to understand which issues may contribute to rejections. If your billing team has a strong understanding of what typically contributes to your practice’s claim denials, they can adjust your billing processes to reduce future denials.

Here are a few simple actions you can take to fix your claims before they lead to denials:

Standardize patient intake: Require front desk staff to verify insurance eligibility and record updated patient information at every visit.
Create denial cheat sheets: Distribute quick-reference guides to your coding team that highlight the most common claim denial codes and their specific fixes.
Mandate swift appeals: Develop an internal policy dictating a specific deadline for your team to review and appeal all denied claims. For urgent claims, try to appeal within 48 hours.

Having a comprehensive system to track and address systemic billing issues lets staff correct workflows and prevent future denials. Practices struggling to reduce their denial rates may choose to partner with specialized RCM companies, such as PracticeSuite, to manage the complex coding and appeals processes, effectively offloading the administrative burden of claims onto an external team.

4. Cost to collect

Patient intake, payment processing, and insurance follow-up add up to a high cost for practices. It’s important that the price of gathering patient and insurance payments remains below your practice’s profit to maintain financial sustainability.

Your billing team can identify the total cost of collecting payment using this formula: Total revenue costs divided by total amount of revenue collected

Remember that your total revenue cost doesn’t just encompass the cost of filing and addressing insurance claims. It also includes billing staff salaries, software subscriptions, clearinghouse fees, and external collection fees.

If your practice is running over budget, consider these tips to cut down on costs:

Consolidate software subscriptions: Audit your current technology stack and eliminate redundant tools that serve the same purpose.
Transition to digital statements: Shift patients to electronic billing statements to reduce postage, printing, and paper expenses.
Optimize staff allocation: Ensure high-level billing experts focus on complex appeals rather than basic data entry to maximize their labor value.

Your practice’s average cost to collect can quickly reveal if your current billing expenses exceed your profits. Review your cost to collect each quarter to ensure it scales with your practice’s growth. If your bill collection costs regularly exceed your total revenue, it may indicate a need to update your billing workflows.

A comprehensive view of your financial system, from initial billing to cost of collection, supports the long-term financial viability of your medical practice. Your team can use these data metrics to continually improve the efficiency of your billing process and ensure timely payment. If you’re having trouble maintaining comprehensive records of this data, consider investing in RCM software that can automate manual billing processes, enabling your financial team to improve your billing workflows and increase your collection rate.