USING EXCEL TO MANAGE REVENUE CYCLE

Submitted to: Dr. Richard Jerz

May 4, 2014

By

Tammy A. Pauwels

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ABSTRACT

Healthcare Revenue Cycle Management is the system of managing claims processing,

payment and revenue generation. There are many components to revenue cycle management.

This paper will examine reports utilized, and basic Excel graphs and charts created to measure

accounts receivable by Account Specialist, amount owed, payor and timeframe. I will review

how to create a graph and pie chart from data downloaded into an Excel spreadsheet from

separate billing system. Monitoring and transparency of accounts receivables with the Account

Specialist, who completes the billing process is an important element to revenue cycle

management.

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TABLE OF CONTENTS

Introduction ...................................................................................................................................... 1 Using Excel to Manage Revenue Cycle ........................................................................................... 2 Conclusion ..................................................................................................................................... 10

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TABLE OF FIGURES

Figure 1. Caretinuum Report Generator ......................................................................................... 3 Figure 2. Caretinuum Report Generator……………………………………………………….….4 Figure 2. Caretinuum Accounts Receivable Aging Report ………………………………………4 Figure 3. Excel Accounts Receivable Aging Report…………………………………………...…5 Figure 5. Create a Graph in Excel...………………………………………………..……………...6 Figure 6. Create a Pie Chart in Excel...……………………………………………………………7 Figure 7. Sample Account Specialist Worksheet………………………………………………….8 Figure 8. Sample Account Specialist Worksheet………………………………………….………9

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INTRODUCTION

What is revenue cycle management? Revenue cycle management in healthcare is the process that

manages revenue generation, claims processing and payment. Revenue cycle is the term used to cover a

large range of processes to support cash flow within healthcare entities.

Monitoring DSO (Days Sales Outstanding) is an important element to managing accounts

receivable. DSO is commonly used as a measurement of the effectiveness of accounts receivable

management. Accounts receivable is typically measured by “aging buckets,” (0-30 days, 30-60 days, 60-

90 days, and 90-120 days, etc.) Most organizations goal is to receive payment before 60 days.

Revenue Cycle Management activities include:

Ø Claims processing

Ø Denials and Appeals

Ø Account Follow up

Ø Monitoring accounts receivable

To ensure timely payment of claims, healthcare providers must review data and implement an

accounts receivable monitoring process. Lack of comprehensive mechanisms for monitor accounts

receivable leads to an increase in write-offs and bad debt.

This paper will outline a sampling of reports created in Excel to monitor accounts receivable to

ensure effective revenue cycle management.

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Using Excel to Manage Revenue Cycle

In healthcare, as well as most industries; it is important to manage your revenue cycle. Revenue

cycle management is the process that manages claims processing, payment and revenue generation. With

healthcare margins declining and bad debt increasing, improving revenue cycle is more important than

ever.

There are many aspects to revenue cycle management. The revenue cycle starts before the patient

is seen and continues until a claim is fully paid. There are many small details that make up revenue cycle.

This report will outline one step of accounts receivable monitoring.

Continual monitoring of your revenue cycle process and measurement of results is critical in the

successful management of accounts receivable. Benchmarking and trending your data gives insight into

who owes you money and how long it has been owed. Closely monitoring your accounts receivable, and

revenue cycle gives you an understanding of where you have potential to improve.

Accounts receivable is payment owed to the company by a customer for services. In healthcare,

we often refer to “days” or DSO, Days Sales Outstanding. DSO is the average collection period or days

sales are in receivables. DSO measures the number of days it takes a company to collect cash from its

creditors. In healthcare creditors are insurance companies, “payors” and/or patients.

Healthcare accounts receivable is typically monitored in 0-30 days, 30-60 days, 60-90 days, and

90-120 day timeframes. There are many reports that should be monitored to effectively measure accounts

receivable. One of the many reports monitored is a report that displays accounts receivable by

account/patient, Account Specialist, amount owed, payor, and age of the account.

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Accounts receivable is divided by payor among the billing team. From our billing system,

Caretinuum we run invoice detail by payor and patient and download it to excel in CSV format every two

weeks. Our parameters for the report are 30, days, 60 days, 90 days, and 120 days. Once in Excel, we are

able to sort our report by specific criteria and remove all of the unnecessary columns and keep the

required data to analyze accounts receivable by payor type. At the end of each payor type, five rows are

inserted. We then go to the first of the inserted rows and sum the columns that contain our values for

accounts receivable. We have three payor types that are split by patient alphabetically (A-K) and (L-X)

we will sum these at the alpha-split. We open our split graph workbook and copy and paste the totals for

the payor types from our CSV file to our graph workbook.

Figure 1. Caretinuum Report Generator

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Figure 2. Caretinuum Report Generator

Figure 3. Caretinuum Accounts Receivable Aging Report

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Figure 4. Excel Accounts Receivable Aging Report

We then use the Excel accounts receivable aging report to create our graphs and pie chart. The

following steps will allow you to create an accounts receivable graph and pie chart to reflect the data

downloaded from the billing software:

To create a graph:

1. On the ribbon select insert

2. Select column

3. Right click on chart

4. Select data

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5. In legend entries select add

6. Series name: type 2/28/14

7. Series values: select icon, select 2/28/14, select E2:I2 for BCBS, hit OK

8. For horizontal axis select edit, hit icon, go to 2/28/14, select E1:I1, select OK

9. Right click chart

10. Select data

11. Add

12. Ok

13. Repeat process for each timeframe and payor

Figure 5. Create a graph in Excel

To create a pie chart:

1. On ribbon select insert

2. Select pie chart

3. Select data

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4. Select add under legend entries

5. Series name: date

6. Series values: highlight column M2:M7

7. Under horizontal select edit

8. Highlight K2:k7

9. Ok

Figure 6. Create a pie chart in Excel

After the accounts receivable payor charts are created, and a pie chart is developed to reflect the

percentage of accounts receivable per Account Specialist, it is necessary to create an individualized

worksheet for each Account Specialist. A specific theme, color scheme, font and style are applied to

individualize each worksheet.

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Figure 7. Sample Account Specialist Worksheet

Updated graphs and charts are reviewed and shared with the billing team bi-monthly. The goal is

for the majority of the accounts receivable to be within 0 – 60 days, preferably 0 - 30 days. Due to denied

claims, requests for additional information, appeals and slow payors; timely payment is not always

possible. Transparency of the team’s graphs encourages accountability and allows the responsible

individual to take appropriate action to ensure timely follow up and payment. The graphs and charts are a

visual way to monitor your accounts receivable with the team responsible for the work.

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Figure 8. Sample Account Specialist Worksheet

Data assembling and analyzing is crucial to revenue cycle management. The ability to download

accounts receivable data into an Excel spreadsheet and create basic graphs and charts to monitor your

accounts receivable is an efficient and effective tool. Measuring payment cycle and identify trends is

critical to revenue cycle and cash flow management. Access to information to benchmark data, measure

improvement and monitor performance, are absolute success factors in revenue cycle management.

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CONCLUSION

It has never been more important for healthcare entities to manage revenue cycle. The healthcare

industry is being challenged on many levels; minimizing loss is imperative. There are many monitoring

tools to manage revenue cycle. Compiling, sorting and interpreting data is critical to measuring

performance. It is important to implement processes that leverage data review systems to optimize

effective and efficient revenue cycle management.