The latest data from Kodiak Solutions shows significant variation among provider organizations in their performance against key performance indicators (KPIs), offering insight into opportunities for improvement.
In its latest quarterly analysis of KPI benchmarking data, Kodiak Solutions found that 2024 performance against eight key performance indicators (KPIs) varied significantly from one provider organization to the next.
Kodiak released data earlier this year that showed three trends working against revenue cycle leaders. However, top performers in the most recent analysis show that there are areas of opportunity for organizations to improve their revenue cycle performance.
True Accounts Receivable Days
The average true accounts receivable (A/R) days for all provider organizations included in the Kodiak analysis was 56.9, compared with 43.6 for the top 10 performers.
Partnering with clinical teams to improve the accurate documentation of services provided can help denials management teams limit the risk of request for information denials and improve performance against this KPI, according to the report.
Additionally, revenue cycle leaders should routinely follow up with payers to resolve denials, to better understand complex denials, and to receive payment.
True accounts receivable days greater than 90 days
At the top 10 performing provider organizations, the average true A/R days greater than 90 days was 22.5%, compared to 35.9% for all provider organizations.
Tweaking preregistration and prior authorization (PA) workflows to limit bottlenecks in the front-end can help to prevent delays in payment, according to the report. Provider organizations should also maintain focus on older accounts to ensure they are resolved.
Credit Days
The average number of credit days was 0.44 for the top 10 performing provider organization,s while the average for all organizations was 1.10.
Credit resolution is an area where automation can improve performance by leveraging past resolutions to identify and replicate effective past actions, according to the report. Of course, it is important to differentiate by types of credit balances. A strategy that works for credits qualifying as exemptions may not be appropriate for credits identified as over-contractualizations.
Days Not Final Billed
The average number of days not final billed was 9.6 at the top10 performing provider organizations, while the average was 8.0 for all organizations.
Days not final billed is another metric where strong alignment between clinical and revenue cycle teams can help to improve performance, according to the report. Quick response times to physician queries are key to limiting delayed billing.
Bad Debt as a Percentage of Gross Patient Service Revenue
Bad debt as a percentage of gross patient services revenue was nearly the same for the average of all provider organizations and the top 10 performing organizations, at 1.4% and 1.3% respectively. However, the overall top performer wrote of just 0.4% of this revenue as bad debts, about two-thirds less than the average organization.
Providers need to improve pre-service or point-of-service collections to prevent bad debt. To do so, organizations should consider expanding options for digital payments and educating patients on their financial responsibility for their healthcare bills.
Point of Service Cash Collections
Point of service cash collections was 18.9% for all provider organizations versus 25.6% for the top 10 performing organizations.
This is another area where organizations can improve performance by tweaking the patient access components of their revenue cycles to improve patient communication and education to ensure payments.
Final Denials as a Percentage of Net Patient Service Revenue
The average final claim denial rate at the top 10 performing provider organizations was 2.2% compared to the average 2.8% rate for all organizations.
Again, alignment between clinical and revenue cycle teams is critical to limiting denials, according to the report. Provider organizations should also consider using advanced analytics to identify and mitigate the root causes of denials and devoting more resources to denial management teams.
Six-Month Lagged Cash to Net Revenue Value
The average percentage of six-month lagged cash to net revenue value was 98.7% at the top 10 performing provider organizations, versus an average of 94.1% at all organizations.
Leveraging analytics and automated tools to limit administrative denials and focusing on high-dollar unbilled accounts are two ways to improve in this area.
The data from Kodiak reveals a clear performance gap among provider organizations when it comes to KPIs. Closing these gaps require revenue cycle leaders to build strong partnerships throughout their organizations, to strategically implement technology, and to improve the patient financial experience.
In its latest quarterly analysis of KPI benchmarking data, Kodiak Solutions found that 2024 performance against eight key performance indicators (KPIs) varied significantly from one provider organization to the next.
Kodiak released data earlier this year that showed three trends working against revenue cycle leaders. However, top performers in the most recent analysis show that there are areas of opportunity for organizations to improve their revenue cycle performance.
True Accounts Receivable Days
The average true accounts receivable (A/R) days for all provider organizations included in the Kodiak analysis was 56.9, compared with 43.6 for the top 10 performers.
Partnering with clinical teams to improve the accurate documentation of services provided can help denials management teams limit the risk of request for information denials and improve performance against this KPI, according to the report.
Additionally, revenue cycle leaders should routinely follow up with payers to resolve denials, to better understand complex denials, and to receive payment.
True accounts receivable days greater than 90 days
At the top 10 performing provider organizations, the average true A/R days greater than 90 days was 22.5%, compared to 35.9% for all provider organizations.
Tweaking preregistration and prior authorization (PA) workflows to limit bottlenecks in the front-end can help to prevent delays in payment, according to the report. Provider organizations should also maintain focus on older accounts to ensure they are resolved.
Credit Days
The average number of credit days was 0.44 for the top 10 performing provider organization,s while the average for all organizations was 1.10.
Credit resolution is an area where automation can improve performance by leveraging past resolutions to identify and replicate effective past actions, according to the report. Of course, it is important to differentiate by types of credit balances. A strategy that works for credits qualifying as exemptions may not be appropriate for credits identified as over-contractualizations.
Days Not Final Billed
The average number of days not final billed was 9.6 at the top10 performing provider organizations, while the average was 8.0 for all organizations.
Days not final billed is another metric where strong alignment between clinical and revenue cycle teams can help to improve performance, according to the report. Quick response times to physician queries are key to limiting delayed billing.
Bad Debt as a Percentage of Gross Patient Service Revenue
Bad debt as a percentage of gross patient services revenue was nearly the same for the average of all provider organizations and the top 10 performing organizations, at 1.4% and 1.3% respectively. However, the overall top performer wrote of just 0.4% of this revenue as bad debts, about two-thirds less than the average organization.
Providers need to improve pre-service or point-of-service collections to prevent bad debt. To do so, organizations should consider expanding options for digital payments and educating patients on their financial responsibility for their healthcare bills.
Point of Service Cash Collections
Point of service cash collections was 18.9% for all provider organizations versus 25.6% for the top 10 performing organizations.
This is another area where organizations can improve performance by tweaking the patient access components of their revenue cycles to improve patient communication and education to ensure payments.
Final Denials as a Percentage of Net Patient Service Revenue
The average final claim denial rate at the top 10 performing provider organizations was 2.2% compared to the average 2.8% rate for all organizations.
Again, alignment between clinical and revenue cycle teams is critical to limiting denials, according to the report. Provider organizations should also consider using advanced analytics to identify and mitigate the root causes of denials and devoting more resources to denial management teams.
Six-Month Lagged Cash to Net Revenue Value
The average percentage of six-month lagged cash to net revenue value was 98.7% at the top 10 performing provider organizations, versus an average of 94.1% at all organizations.
Leveraging analytics and automated tools to limit administrative denials and focusing on high-dollar unbilled accounts are two ways to improve in this area.
The data from Kodiak reveals a clear performance gap among provider organizations when it comes to KPIs. Closing these gaps require revenue cycle leaders to build strong partnerships throughout their organizations, to strategically implement technology, and to improve the patient financial experience.
Luke Gale is the revenue cycle editor for HealthLeaders.
KEY TAKEAWAYS
Strong alignment between clinical and revenue cycle teams ensures thatappropriate documentation limits denials and billing delays.
Improving the patient financial experience and optimizing front-end workflows can prevent bad debt and pre- and point-of-service collections.
Effective use of advanced analytics and automation can help to identify past actions that work and ensure they become the template for the future.