Tuesday, March 20, 2012

Revenue Cycle Management Has a Brand New Key

Whether you manage your revenue cycle in-house or turn it over to the care of an outside service, staying informed of the condition of your financial health is the key to the success of your practice. Recognizing the importance financial wellbeing in the health care industry, the Healthcare Financial Management Association (HFMA) created a set of MAP Keys as the new standard of measuring revenue cycle performance. By measuring performance, practices can compare it to their financial goals. The MAP keys serve as a useful tool when choosing a revenue cycle management solution. Present your results and see what kind of savings and optimization plan the vendor comes up with for you. 

1. Practice Operating Margin
Measures financial performance of a physician entity based on accrual.

2. Practice Net Days In Accounts Receivable
Averages the number of days payment collection takes on services rendered. It also measures the effectiveness and efficiency of your practice’s revenue cycle.

3. Practice Cash Collection Percentage
Measures the efficiency of the revenue cycle and supports valuation of current accounts receivable. This key also can predict income.

4. Total Physician Compensation as a Percentage of Net Revenue
This key demonstrates the ability to afford compensation for physicians in relation to their revenue.

5. Professional Services Denial Percentage
Tracks the amount of payer denials and its impact on cash flow. It measures payment improvement opportunity.

6. Point-of-Service Collection Rate
Shows practices how they can decrease collection costs and increase cash flow rate.

7. Total Charge Lag Days
Measures charge workflow effectiveness as well as identifying the delays in cash receipt.

8. Percentage of Patient Schedule Occupied
Pinpoints opportunities to make the best use of appointment slots to improve practice workflow.

For more information on HFMA’s MAP Keys, please visit their website.  


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