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In healthcare financial management, as in most other fields, the only constant is change. Over the years, our changing operational and reimbursement environments have meant that our profession has had to constantly adapt to survive, much less prosper. One constant, however, has been that the most important changes have ultimately had some impact in the revenue cycle arena. Thus, the revenue cycle has required significant attention at all levels of the organization, from CFOs and finance committee members, to the leaders directly charged with delivering revenue cycle results.
The environment of revenue cycle management has, however, changed over the past two years. For one thing, the chief revenue officer (CRO) organizational model has become more prevalent. Thus, leaders are now responsible for functional areas that were not covered by the original group of KPIs, including physician practice management and managed care contracting. Additionally, consumer-directed health care and pay for performance have become part of the landscape, and best-practice KPIs have had to change in response. With the greater financial risk to which these financing arrangements expose providers, hospitals and group practices are "turning their revenue cycles upside down." This means an increased emphasis on upstream and midstream functions of scheduling, patient access (especially preregistration), insurance verification and authorization, financial counseling, point-of-service collections, and health information management. Performance expectations for these functions, in turn, have become tighter and more demanding, in response to the increased financial pressure.

Although they may appear similar, there are considerable differences between the new generation of KPIs and those that appeared in the July 2005 issue of hfm. In particular, three entirely new sections are included here:

* Physician practice management

* Managed care contracting

* Pay for performance: clinical decision support/finance

These sections appear because many CROs have assumed responsibility for these functions, and because without a comprehensive view of all revenue cycle functions, it is difficult to obtain optimal results. Further, many of the suggested practice standards (the numeric indicators) have evolved to reflect changes since 2005, particularly technology's positive impact on worker productivity. The previous article also could not include the suggested practice processes checklist due to space limitations. Used with the numeric standards, the checklist constitutes a powerful and effective assessment tool for hospital and ambulatory care revenue cycle leaders and their CFO colleagues. If financial managers are able to answer yes to most of the questions, and the numeric indicators look good, they can have a high level of assurance that their revenue cycle operations are in good shape.

The data were drawn from a variety of authoritative sources, including:

* HFMA publications, forums, and web site

* American Health Information Management Association publications and web site

* Big-four accounting firms internal standards and client data

* McKesson internal standards and client data

* Hospital Accounts Receivable Analysis report standards

All of these standards are being met or exceeded by best-practice providers nationwide, although of course, not all at the same time.

The concluding paragraph from the July 2005 article is still relevant today: "Certainly, having the numbers alone is not enough. When coupled with a good understanding of industry standards and the process management skills needed to help achieve them, your numbers can tell a story of financial wellness, complete with key indicators trended across time. Remember: How do you know where you're going if you don't know where you've been?"

AT A GLANCE

The revenue cycle management environment is dynamic. Revenue cycle leaders are now responsible for additional functional areas and have to deal with new financing arrangements that expose the organization to greater financial risk. Financial managers can use key performance indicators and the suggested practice processes checklist to determine whether their revenue cycle operations are in good shape or need shaping up.