Benchmarking the revenue cycle management metrics of a clearinghouse is a very effective tool for evaluating the quality of the RCM service yet a clear understanding of the terms combined with qualifications of success criteria are essential for comparing one RCM company against another and making the best choice.
Clean Claim Rate Can Be Misleading
The term clean claim rate refers to a clearinghouse’s degree of consistent success in getting claims processed but nearly every clearinghouse worth it’s weight has a rate that exceeds 90% and the metric has been relatively outdated by increasingly complex payer rules.
The bottom line is that using clean claim rate as a reliable RCM benchmark for evaluating a revenue cycle service company is a flawed approach primarily because of its marginal impact on cash flow.
First Pass Claim Yield is a Top Metric
This represents the percentage of claims that are paid on their first submission, putting the emphasis on denial prevention by requiring a higher allocation of time and resources to the pre-claim submission process, limiting the number of incorrect claims which is turn reduces time spent working on denials while increasing cash flow.
The bottom line is that focusing on first pass yield creates more work on the front end yet driving measurably higher RCM efficiency.
KPI Evaluation: Net Collection Ratio
The net collection rate is the adjusted rate that measures the effectiveness in collecting reimbursement payouts.
The bottom line is that like first pass yield, the net collection rate is an indicator of the relative success or failure of the revenue cycle service by evaluating what percentage of everything owed is being collected.
Evaluating Your A/R Realization Rate
A high quality accounts receivable process is critical to a providers success and possibly the most critical KPI for evaluating the success of an RCM company. The magnitude of accounts definitely matters but the age of those accounts creates some of the most important RCM metrics for evaluative purposes.
The bottom line is that evaluating the percentages at more than 30, 60, 90, and 120 days gives crucial insight into where in the AR process the majority of claims are being paid and what degree of success is occurring at each stage for the more difficult .