Stakeholders such as surgery center owners, management companies or hospital representatives play a large role in shaping how a surgical center operates. While their views may not always appear to improve daily operations at the facility, administrators and executives can use key performance indicators (KPIs) to influence ASC stakeholders into considering certain courses of action.
Jho Outlaw, senior vice president of revenue cycle services at SourceMed, shared her thoughts on how to effectively use KPIs to inform and influence stakeholders about their ASC revenue cycle at the Becker's ASC Review 23rd Annual Meeting: The Business and Operations of ASCs on Oct. 27 in Chicago.
Ms. Outlaw drew attention to four specific KPIs to scrutinize when evaluating a surgical center's performance, including: accounts receivable (A/R) over 90 days, the number of days it takes to send out the bill, the number of days of net revenue in credit balances, and the cash collected as a percentage of the center's net revenue.
According to Ms. Outlaw, "what gets measured, gets managed," and KPIs provide the necessary data a surgical center needs in order to proactively identify, diagnose and address potential problems in order to become more profitable.
She honed in further on two of the top KPIs: A/R over 90 days and the number of days of net revenue in credit balances. A center’s goal for accounts receivable, which indicates how quickly a center is receiving payment for services rendered, should aim to have less than 17% of invoices over 90 days. In terms of net revenue days in credit balances, Ms. Outlaw acknowledged the indicator doesn't normally receive the attention it deserves. To maintain a lucrative surgical center, credit balances must be low, two days of net revenue or less.
Ms. Outlaw then walked the audience through two real-world examples of how to calculate and use KPIs to build a data-driven, fact-based proposal for stakeholders. The steps she recommends are:
- Constantly measure and monitor KPIs to identify problem areas
- When you see an outlier, dig in and diagnose the root of the issue
- Assess the facts and determine your proposed course of action
- Determine the anticipated return on investment (ROI)
- Present the data and your recommendations with the ROI
"When managing an ASC revenue cycle, we always have needs ─ more people, more software, more automation, more data analysis ─ and none of those things are free. And in an environment like where we are today, there are always opportunities to find the next bigger, better process, or spend more with our current vendor to get more," Ms. Outlaw says. "The data that we have access to now, when used the right way, can help drive those investment decisions. It's very hard for key stakeholders to say no when we can offer them a return on the investment."
At the end of the day, Ms. Outlaw says the goal is to collect as much revenue as possible. Patient engagement is an increasingly important component and having a robust pre-registration and insurance verification process is essential. She offered several reccomendations to optimize the patient engagement process, including asking for total payment before the patient receives the services and ensuring the patient is, at minimum, aware of the total cost of the procedure. Facilities should also implement technology to allow patients to pay online, via text or over the phone. Ms. Outlaw also suggests ASCs escalate messages on their patient statements, meaning that with every additional statement, centers should notify patients that unpaid bills may go to collections after a certain amount of time has passed to motivate patients to contact providers to negotiate medical bills or to pay bills in full. She notes medical personnel will eventually need to start placing outbound calls to patients with overdue bills.