In today’s value-based healthcare landscape, where hospitals and healthcare institutions are compensated based on the quality of care, even the most minor deviation in documentation can leave gaping holes in the revenue stream. Clinical Documentation Improvement (CDI) becomes even more crucial as Medicare continues to be the biggest payer for U.S. hospitals. With an expected 72 million people falling under its bracket by 2025, the exponential growth in this sector will only place a further burden on patient documentation in the years ahead.
Care providers must continuously realign their healthcare revenue cycle management (RCM) through comprehensive and quantifiable performance metrics or Key Performance Indicators (KPIs) to accurately capture care quality and ensure proper reimbursement. Overlooking even a single criterion could lead hospitals and clinics to suffer significant reimbursement losses. A robust set of KPIs helps hospitals track performance and prevent dire circumstances. It also provides organization-wide visibility of the hospital’s revenue cycle success.
Healthcare organizations struggle to optimize their KPIs despite meticulous adherence to the revenue cycle, especially for outpatient procedures where volumes and scope for errors are high. As a result, they suffer millions of dollars in lost revenue through claim denials and reworks. Research shows hospitals lose about 2% to 5% of their net patient revenue in unpaid claims.
Understanding Healthcare RCM Key Performance Indicators
The ability to effectively use KPIs is the deciding factor in reducing claims denials and maintaining a healthy revenue cycle. When looking at KPIs in a value-based healthcare model, the efficiency of the medical coding and documentation process is most important. Two key factors govern these:
- Coding productivity: The number of hours divided by the number of records. Efficiency depends on the least amount of time for the most coded work. For example, 24 inpatient coding records per eight-hour paid workdays can be an average benchmark for efficient coding productivity. However, this metric will need to be adjusted based on additional coder duties, organizational complexity, case mixing, etc.
- Coding accuracy: Accuracy is determined by comparing the number of errors against the number of codes assigned – the goal being an absence of deviations. Since the organization is assigning coding levels, a guideline document measures the accuracy of coding levels. Online coding tools and official manuals benchmark and improve coding accuracy and efficiency.
While these factors form a solid basis for medical coding and documentation, there are several