By Kurt Lovell, Chief Operating Officer
This column originally appeared in HME News, you can read the original here.
Q: What is my collection rate?
A: It’s not as clear as you might think. Like any metric, it’s critical that you understand the key inputs that lead to your collection rate. Furthermore, being well informed about your measurement is the first step toward improving your results.
A collection rate calculation needs to account for more than just total patient payments divided by total patient pay accounts receivable. Fluctuation in the number of patient encounters, age of existing accounts receivable, changes in payer mix, reimbursement rates, collection policy revisions, and a multitude of other factors can vary your collection data significantly, so it is important to analyze data in a way that accounts for these variables.
Consider using a static pool analysis. This type of measurement is designed to help “reduce” the noise and enable you to assess how your collection policies are working.
Static pool analysis is the analysis of a “pool” of self-pay responsibility occurring within a specific period of time. For example, new self-pay in March would form one pool and new self-pay in April would form a second pool. The goal is to isolate a given pool of self-pay from the influence of other older (or newer) self-pay. Over time, the collection performance of any given pool can be compared against other pools, allowing you to draw conclusions about the effectiveness of your revenue cycle decisions.
Also, with static pool analysis, there is a clear start and end. The results of a given pool at day 90, for instance, will not change. As a result, you’ll be able to determine whether events during this period, like an internal policy change or a change in your cycle logic, achieved the desired result on your collections. Having this clarity is a key driver to continued collection success.
Kurt Lovell is currently writing a series of columns for HME News to help healthcare providers improve their patient payment process. You can find his future articles at the HME News Smart Talk page.