Practitioners in the behavioral health industry are enthusiastic about data collection; particularly, behavior analysts. One of the most interesting components of behavior modification and data analysis is that ABA practitioners creatively apply these principles to various aspects of life. For example, here’s a high-level overview of skills used in ABA that can be applied universally:

• Evaluation of current levels to assess baseline.
• Implementation of specific strategies outlined to mitigate deficits.
• Analysis of data to find potential trends or patterns.
• Frequent monitoring and reevaluation of data to promote data-informed decision-making.
• Repeat this process until optimal levels are reached.

Similarly, these same foundational steps used to identify & modify ‘target behaviors’ when working with clients, can be applied to establishing key performance indicators, especially in terms of your practice’s financial goals.

Revenue Cycle Management (RCM) – Quick Overview

Revenue cycle management, commonly known as RCM, includes all the processes involved in collecting revenue for your services, from the initial patient intake to the final payment. An efficient RCM process ensures timely payment and minimizes stress for staff.

What are Key Performance Indicators (KPIs)?

“Key performance indicators are financial measurements designed to evaluate the performance of revenue cycle management” (Stall, Therapy Brands, 2021).

To elaborate, you know that RCM refers to how your administrative processes (patient information gathering, claims processing, invoicing, etc.) impact the speed and amount of cash flow your practice sees. However, how do you effectively measure the success and pinpoint areas for improvement? This is where key performance indicators, or KPIs, come into play.

Important RCM KPIs for Behavioral Health Agencies

KPIs are quantifiable measurements that track your progress toward specific financial goals. It’s not realistic to pinpoint just one KPI as the ultimate benchmark for RCM performance. Instead, a combination of RCM KPIs can be impactful when implemented collectively. Some important ABA revenue cycle KPIs include:

Front-End KPIs

• Patient Eligibility & Benefits Verification Rate: Monitor the accuracy and efficiency of verifying client insurance coverage. Since this is one of the first steps in billing a client’s insurance, a hurdle at this stage can disrupt the entire billing cycle.
• Prior Authorization Approval Rate: Measure the success rate of obtaining pre-authorization for services. Many payers require prior authorizations for ABA services, so beginning treatment without one is a risky game, potentially setting you up to complete services without reimbursement.

Billing KPIs

• Clean Claim Rate: Track the percentage of claims submitted without errors on the first attempt. A higher clean claim rate means you’re less likely to receive claim denials, increasing profitability while lessening the workload. Target benchmark: >95%
• Days in Accounts Receivable (AR): Measure the average time it takes to collect payments after services are rendered. A high AR number indicates slow collections and cash flow issues, while a lower AR indicates efficient collections and a healthy financial state. Target benchmark:  30-45 days

Collections KPIs

• Collection Rate: Track the percentage of outstanding receivables collected within a selected timeframe. This can be done on a client level (tracking collections from clients only) or at a net level (tracking all collections, including clients & payers). This metric is important because a low collection rate can lead to financial strain. Whereas a high collection rate can be indicative of an efficient RCM process. Target benchmark: >90%
• Denial Rate: Monitor the percentage of claims denied by insurance companies. Remember, high denial rates reduce revenue and require additional resources for appeals. Target benchmark: <5%

KPIs Maintenance

Just as ABA treatment plans are continuously monitored and adjusted, KPIs should be reviewed regularly. Analyze trends, identify areas for improvement, and set new goals. Utilize these insights to refine your RCM processes and sustain continuous financial maintenance and growth.

Using Behavior Analysis Tools for Denial Data

As mentioned earlier, the same data analysis skills used to decode client behavior can be applied to different aspects of RCM such as understanding denial patterns.  By analyzing denial codes and reasons, you can identify recurring issues and develop targeted strategies to address them.  This proactive approach is known as denial avoidance and can significantly reduce denial rates and improve cash flow.

Denial Avoidance vs. Denial Management

Denial management is the process of finding, reviewing, and resolving claim denials from insurance companies. Effective claims denial management includes:

1. Establish a Denial Management Process: Create a clear workflow for handling denied claims. This might involve assigning dedicated staff or outsourcing the process to a denial management service.
2. Identify the Reason for Denial: Understand why the claim was denied by carefully reviewing the explanation from the insurance company. Denial codes provide specific details about the reason for denial.
3. Gather Supporting Documentation: If the denial stems from missing or inadequate documentation, gather the necessary information to support the medical necessity of the service provided. This could include clinical notes, treatment plans, or prior authorization documentation.
4. Craft a Clear and Concise Appeal: Develop a well-written appeal letter that addresses the specific reason for denial. Clearly explain why the service was medically necessary and provide any additional documentation to support your case.
5. Track and Monitor Appeals: Keep track of the status of your appeals and follow up with the insurance company if necessary. Utilize billing software to streamline this process.
6. Identify Trends: Analyze denial data over time to identify recurring denial reasons. This can help you pinpoint areas for improvement in your billing and coding practices to prevent similar denials in the future.

While addressing issues after they occur is an important step in RCM, preventing them altogether will be your best bet for a smooth and profitable workflow.

Frequent monitoring helps to proactively identify early signs and make timely adjustments to prevent potential loss of revenue. The ultimate objective is to avoid having to deal with denials. In LaPointe’s 2016 online article, “How to Access Revenue with Improved Claims Denial Management,” she shared the following:

A 2014 Advisory Board study showed that 90 percent of claim denials are preventable. Some of the most common claim denial reasons can be rectified by correcting claims management workflows, including claims submission and patient registration procedures. (LaPointe, 2016)

This process is referred to as ‘Denial Avoidance’ in comparison to ‘Denial Management’. ABA providers who successfully define, find, track and report denials across a multitude of various aspects will most likely be a valuable resource for analyzing process breakdowns and creating proactive solutions for performance improvement (NRHRC, 2021).

Bonus: RCM Glossary

Whether your practice handles RCM tasks internally or outsources to a professional RCM team, it’s best practice to stay up to date on revenue cycle management terms.  The following list defines some important RCM terms you’re likely to hear.

• Accounts Receivable (AR): This refers to the money owed to your practice by insurance companies or patients for services rendered.
• Appeals Process: The formal procedure for requesting reconsideration of a denied claim. This typically involves submitting a written appeal with supporting documentation to the insurance company.
• Clean Claim: A claim submitted to the insurance company that is free from errors and has all necessary information for processing. Clean claims are less likely to be denied, leading to faster reimbursement.

• Copay: The set amount a client will pay at the time of service.
• Coinsurance: The percentage of the remaining charge the client will pay after meeting their deductible.
• Current Procedural Terminology (CPT® code): A standardized code used to identify specific healthcare procedures. ABA practices will utilize specific CPT® codes to represent therapy sessions and interventions.
• Deductible: The amount a client will pay before insurance begins reimbursing services.
• Denial Management: As discussed previously, this refers to the process of identifying, reviewing, and appealing denied claims from insurance companies.
• EOB (Explanation of Benefits): A document from the insurance company that explains how a claim was processed. It details the allowed amount, denied amount, and patient responsibility.
• Healthcare Common Procedure Coding System (HCPCS code): Another coding system used alongside CPT® codes to provide additional details about services provided. For ABA, HCPCS codes might specify the type of therapy (individual, group) or the setting (clinic, home).
• Modifier: These are additional codes added to CPT® or HCPCS codes to provide further details about the service provided. For example, a modifier might be used to indicate a new evaluation or extended therapy session.
• Place of Service (POS) code: This code indicates the location where the service was rendered. For ABA therapy, this could be an office (POS code 11), outpatient hospital (POS code 22), or patient’s home (POS code 21). Or, for telehealth services, POS code 01 if the patient was located in their home during teletherapy or POS code 02 if they were located anywhere else.
• Prior Authorization: This is the process of obtaining approval from an insurance company before providing certain services. For ABA therapy, this might be required for specific treatment approaches or exceeding a certain number of sessions.

Easily Manage Your Revenue Cycle’s Key Performance Indicators

Staying on top of these RCM KPIs might seem like another task added to your already full plate. However, you can easily manage these indicators and your practice’s performance with the right insights. Just like working with clients, having access to transparent data is everything. WebABA’s practice management software, tailored specifically for ABA providers, allows you to have a comprehensive view of your practice’s health at your fingertips in just seconds. WebABA provides automated reporting that can be customized to meet your specific needs and pulls data directly from other practice sources. With scheduling, billing, data collection, and more all available on one user-friendly platform, you can access everything from anywhere.

Schedule a demo to learn more about how WebABA can help improve your revenue cycle management.

References

• Stall, D., Brinkman, M., & Padula, N. (2021). Billing 101: Credentialing, Contracting and Understanding Eligibility by Therapy Brands. Presentation, webinar. https://vimeo.com/589418548 
• LaPointe, J. (2016). How to maximize Revenue with Improved Claims Denials Management. Revenue Intelligence. Retrieved 22 December 2021, from https://revcycleintelligence.com/features/how-to-maximize-revenue-with-improved-claims-denials-management
• Revenue Cycle Management Best Practices Guide. Ruralcenter.org. (2021). Retrieved 22 December 2021, from https://www.ruralcenter.org/sites/default/files/Revenue%20Cycle%20Management%20Best%20Practices%20Guide%20August%2017%202021.pdf