A revenue cycle roadmap leads to positive outcomes at Phelps Memorial Health Center

At Phelps Memorial Health Center, a critical access hospital in rural Nebraska, it is our mission to provide holistic care and serve the needs of our community. As a progressive organization with a growing number of outpatient services and specialists, revenue cycle management plays a critical role in managing a variety of payers and ensuring operations run smoothly. 

Hospitals and health systems around the country are navigating an unprecedented landscape of claims denials. At Phelps, we revamped our strategy from doing our best to manage claims denials to producing as few as possible. Here are some of the actions we have taken and metrics we’ve tracked that have been critical in keeping our revenue cycle functioning efficiently. 

Key metrics to measure revenue cycle optimization

Healthcare systems lose billions of dollars in revenue each year due to avoidable errors, such as inaccurate patient or provider information, invalid codes, duplicate billing and missing documentation. To prevent this, organizations can conduct an analysis of the challenges they’re facing and what options are available as solutions. It is important to have the right mix of technologies to monitor revenue cycle KPIs. Disjointed tools that only address individual pain points make it difficult to achieve financial sustainability. 

At Phelps, we’ve benefited greatly from our integrated EHR system and a select few third-party tools that automate the billing process, reducing the administrative burden on staff. We have a Revenue Cycle steering team that discusses denials and what departments they are hitting, and we meet with directors, as well as providers, to ensure information is being inputted properly. Evaluating these key metrics has helped us avoid the barriers to patient care that negatively impact bottom lines: 

• Denials: Most denials should be preventable if technical errors can be corrected. With multiple steps in the billing process, it is important to get edits done as early as possible to reduce denial rates and to reevaluate edits consistently to keep denials low in the long-term. We’ve gone from our denial days being 9.4 in 2018 to 0.2 in 2024, which has increased employee and patient satisfaction. 
• Clean claim rate vs. First pass yield: We define a clean claim as one that goes through the scrubbing process with no errors. In the past, our billers were touching every claim because they didn’t trust their systems. With automation and the right solutions addressing this issue, our clean claim rate has gone from 0% in 2017 to now being in the 90% range. However, clean claim rates don't provide as much insight as first pass yield, which gives big-picture visibility into the claim. Focusing on first pass yield helps us track how many claims are paid on first submission, which gets to the root cause of why the claim didn’t get paid. 
• A/R days: Intuitive workflows with system-wide integration can substantially reduce A/R days to boost overall fiscal health. Our A/R days have gone from 55 to in the 30 range in the past several years due to taking a proactive approach with our revenue cycle solutions. 

The power of advanced visualization and automation 

Previously, it was a challenge for us to harness the power of our revenue cycle metrics. Spending endless hours pulling reports to uncover the cause of denials made it hard to find the time to fix the problem. With access to advanced visualization tools that deliver actionable information, such as a Financial Status Desktop, leadership can gauge progress toward organizational goals and make more informed data-driven decisions. Easily shareable data also promotes internal awareness around revenue cycle efforts, as staff have insight into how they are positively impacting financial performance. 

By automating and streamlining revenue cycle workflows, we have alleviated staff burdens, minimized errors, and accelerated reimbursement. Faster payments improve cash flow, which is essential for a small critical access hospital that needs to maximize its resources. 

Final takeaways

Technology is always evolving and change is a constant for healthcare leaders. Running an effective revenue cycle requires a culture of transparency, and this is much easier to establish when you are empowered with the right tools. When new technology is not viewed as a burden, but rather a resource to enhance productivity, staff are in a better position to enhance financial performance and ensure a seamless patient experience. Team members should also know that their jobs aren’t at risk as artificial intelligence becomes further ingrained into improving revenue cycle management. AI is critical in helping analyze large quantities of data, identify patterns, and predict payor behavior – but its most important value is accelerating human expertise, an element that remains a critical piece of effective revenue cycle strategy. 

By taking a holistic health approach at Phelps, we work closely with providers so they’re aware of the benefits of our revenue cycle solutions. Once they understand the ‘why’ behind an initiative, it reduces roadblocks and gets our patients on the right care path. Having this strong foundation in place was instrumental for us in overcoming hurdles such as having over 50% new staff since COVID-19 and the more recent Change Healthcare cyberattack. Ultimately, our goal is to increase efficiency so staff have more time to interact with patients and mitigate the impact of unforeseen circumstances such as data breaches. 

With support from executive leadership and innovative solutions, we are proud of how achieving revenue cycle optimization has enabled timely, exceptional care while reducing costs, benefiting both our providers and patient population.

Read our eBook to learn how you can support your frontline, and strengthen your bottom line with strategic revenue cycle management.