Finance management relies heavily on KPI within a healthcare organization as it provides insight into how well it is performing. As the HIM Manager, the CFO who you report to has asked you to monitor staffing levels for your department. The CFO has asked that you identify the KPI’s you will use to monitor employee productivity and how you will use this information to provide feedback to your department.
Module 04 – Revenue Cycle Management
In the typical for-profit organization, the main resource for generating revenue may be sales. These organizations may earn their income from selling equipment or clothing. Healthcare organizations are considered part of the service industry; therefore, their income is generated from the services they provide for their patients. The revenue generated from patient services may be received in the form of direct payment from the patients. In other cases, the patient may have health insurance that will pay for services provided once a claim is generated. These payers are third party payers who administer a healthcare plan for the patient and will pay the healthcare providers on behalf of the patient. Another revenue source is government funding by way of subsidies or grants distributed based on services offered by particular healthcare organizations.
Within a healthcare organization, Finance management relies heavily on KPI as it provides insight into how well the organization is performing. Also, KPI assists management in determining areas for process improvement and cost saving. When reporting KPI, it is important that what you are reporting is measurable and relevant to the end user. Some examples of KPI are days outstanding in accounts receivable, coding productivity, or average days per inpatient stays. Knowing your audience is very important in determining the type of KPI you are going to track and report.
The system used to track and report KPI must be accurate and reliable. Departments responsible for reporting KPI generally have credible policies and procedures in place to ensure end users that the data presented is a reliable tool for them to use. Reporting KPI also provides external users an overview or snap shot of the financial health of an organization. It is also used as a comparative analysis for where an organization’s employees’ productivity is compared to similar healthcare organizations.
Coding and billing departments play an important role in generating revenue for a healthcare organization. Coders are tasked with reviewing documentation to ensure that what the physician documented supports the code that will be applied to the services provided. These codes are criteria used when a third party payer determines what amount it will reimburse a physician or facility for services rendered. Accurate coding is required in order for a facility to capture not only adequate, but the highest possible reimbursement amount based on procedures performed.
Billing’s role is to ensure timely and accurate claim filing of procedures performed by the physician and/or facility. Most third party payers will reimburse a facility for claims filed in as little as 30-45 days for a clean claim. If Billing does not present the third party payer with a clean claim the first time submitted it can result in a delay and in some cases lack of reimbursement. This will negatively affect the organization’s financial performance.