Revenue Cycle Management (R.C.M.)

'Days in Accounts Receivable' (D.A.R.)

While our primary goal in pediatric practices is to provide the utmost care and attention to our young patients, we must recognize that we also run a business. A business that needs to be financially sustainable to continue to deliver quality healthcare services to children. 

A critical element that drives a pediatric practice's financial sustainability is practical Revenue Cycle Management (R.C.M.). R.C.M. is the backbone of the healthcare business model. 

It is a financial process that utilizes medical billing software to track patient care episodes from registration and appointment scheduling to the final payment of a balance. It bridges the gap between the clinical and business sides of healthcare by focusing on the business of collections. Maintaining a healthy revenue cycle in pediatric practices is paramount for the practice's survival and ability to keep the doors open. 

An efficient R.C.M. process ensures that the practice receives appropriate reimbursement for the services provided, which, in turn, feeds into the practice's operational costs and growth plans. 

One of the significant key performance indicators (KPIs) used to measure the efficiency of R.C.M. is the 'Days in Accounts Receivable' (D.A.R.). D.A.R. is a metric that indicates the average number of days it takes for a practice to get paid for the services rendered. Another way to look at this is the average number of days the Manage Care Organization or Health Plan takes to pay your claims. D.A.R. is a lag indicator, and it is affected by many lead indicators.