Revenue cycle management is critical to the profitability of any healthcare firm. It extends beyond payment posting, used by medical practitioners to assess, track, and appropriately manage the importance of patient claims on their accounts receivables. To better understand RCM, you need to know what is Revenue Cycle Management in healthcare? Revenue cycle management (RCM) is the financial process used by healthcare practices to track patient care instances, from registration and appointment scheduling to final balance payment using medical billing practice management software. RCM connects administrative and clinical data, such as a patient’s identity, insurance provider, and other personal information, with the patient’s treatment through healthcare data.
Communication with health insurance companies is a significant aspect of medical Revenue Cycle Management. When a patient makes an appointment, the physician or healthcare practice personnel usually double-check the patient’s claimed insurance coverage before the visit.
A healthcare practitioner and coding staff classify the nature of the analysis using ICD-10 codes when an insured patient receives treatment for a specific ailment and pays any applicable copayment. The healthcare facility then sends the patient’s care instantaneous with ICD and current procedural technology codes to the patient’s insurance company. The revenue cycle management services comprehend all administrative and clinical operations of healthcare practices that subsidize the capture, management, and collection of patient service revenue.
The shift toward value-based compensation and more holistic patient care has compelled healthcare providers to reconsider their approach to revenue cycle management. Poor medical billing methods can lead to financial losses and jeopardize the capacity to provide quality care. Efforts to reinforce and reorganize basic operating set-ups can support providers in remaining financially viable.
Healthcare providers frequently deal with limited resources. To accomplish RCM success, healthcare revenue cycle management providers must often focus on improving administrative efficiency.
Revenue Cycle Management Practice
Hospitals and health systems employ the healthcare revenue cycle to manage all administrative and clinical data that enters the facility daily. Even for hospitals that use precise management tools, this may be an extremely complex and time-consuming procedure involving a large amount of data being negotiated through numerous healthcare practice departments. As a result, obtaining the most precise data is vital to effective healthcare practice management.
The healthcare revenue cycle refers to all administrative and clinical responsibilities contributing to acquiring, managing, and collecting patient service data. In other words, it refers to the complete lifecycle of a patient’s account.
Revenue cycle management includes a list of clear accountabilities employed to meet realm demands. Here is a list of the elementary revenue cycle functions that healthcare workers employ daily to intensify and preserve their hospital’s revenue stream:
The End-to-End Registration Process
This preliminary step in the revenue cycle is critical because it can bring imperative financial benefits to both parties involved. From the hospital’s standpoint, allowing patients to know their projected out-of-pocket costs for a service increases the possibility that they will pay their bills on time, reducing sources of bad debt. The pre-registration process needs patients’ all personal and demographic data and insurance payment details; this streamlines the progression and may increase patient contentment.
Check Patient Information
This phase confirms that all required patient registration information has been gathered throughout the pre-registration process. Suppose the healthcare practice finds an error in the patient’s registration form. In that case, this is the moment to bring it to the patient’s attention before the error magnifies into much superior difficulty. The responsibility for rectifying the error often falls on the healthcare worker who entered it. This stage of patient registration potential is critical and requires medical staff to be vigilant in their data-entry practices.
In this process, all medical services provided by medical firms are renewed into billable costs for patients. Charges from the service and facility are noted on the bill and then submitted to the insurance provider. This phase is critical in ensuring that payers remunerate healthcare practices throughout the revenue cycle; this thought in the medical industry is identified as revenue integrity. To do this, healthcare firms must have a robust system that can capture data, process it promptly, and generate reports to support their revenue cycle functions. A healthcare firm’s first step to building a robust revenue cycle is to identify its current processes and pinpoint where the gaps are. This should include a review of current systems and processes, as well as the systems and processes of their competitors. The healthcare firm should then use this information to develop an action plan that addresses their specific needs.
Codes and diagnostic features
Medical coding and diagnostic features ensure that the huge array of health services is manageable in healthcare practices. Medical coding is required to convert written descriptions of procedures, services, and patient diagnoses into numeric or alphanumeric codes. While these codes are meaningless to the patient, they assist hospitals in creating a map to provide healthcare treatments.
Medical billing companies submit claims to insurance companies to get reimbursements faster/ if an error occur in claim processing, this might result in a lengthy delay in hospitals receiving reimbursement from insurance companies.
This method entails keeping track of outstanding accounts and chasing payments from patients. Patient collections are becoming increasingly crucial to revenue as patient financial responsibility grows due to high-deductible health insurance. Furthermore, healthcare practices must be restrained about how they offer their prices because if patrons receive a bill that is larger than expected, payment may take longer, necessitating the provider to incur more bad debt.
This is the process of revenue cycle management in the healthcare industry. The above portion gives a brief overview of what is revenue cycle management in healthcare.
Maximize your revenue with RCM companies
RCM companies are vital constituents of every thriving healthcare firm. Without an efficient medical billing sector, your healthcare practice could lose thousands of dollars in insurer reimbursements, patient payments, and other income streams on which it depends. Understanding and implementing excellent revenue cycle management is critical to your firm’s productivity and effectiveness. Further, this article will discuss expanding and increasing revenue in the healthcare industry by getting into the RCM process. Follow the below-mentioned steps to recognize how to maximize your revenue.
Verifying insurance coverage, benefit eligibility, and financial accountability includes bad debts and, more critically, collaborating this data with the patient; all of this is compulsory. The business trending toward patient engagement has become even more critical. You must compute your CPT code and compare it to others. Finally, leverage clinical and administrative data to negotiate better contracts by calculating the percentage of business you get from your payer.
Clearance Practices Implementation
Verifying insurance coverage, benefit eligibility, and financial accountability includes bad debts and, more critically, communicating this information to the patient. The industry’s trend toward patient engagement has become even more critical. It helps to empower patients and share critical information with them, such as financial information statements, issues with insurance coverage, and denials. Before giving care, it is critical to communicate the information to patients.
Use of Technology
Modern technologies must be used to reap the many benefits of Revenue Cycle Management. Electronic Health Records, Practice Management Software, and other effective technologies are available. Practices must strive and succeed with an effective system to automate operations such as insurance verification and benefit eligibility, charge capture, and so on. Payment clearinghouses and monitoring can take time to examine each payer to determine coverage.
Practice Management software that automates insurance verification and code collection. Furthermore, Code and payment scrubbing with the help of an efficient clearinghouse is essential for progress.
Management of Denials
Denials can be adequately controlled by checking for any registration and claim problems. According to experts, the ICD-10 transformation will significantly impact Revenue Management cycles. It is also critical to follow up on denials, create templates for appeal letters, and track denials. It takes a lot of time. Automating all operations not only saves time, but it allows the person to work more efficiently and focus on other tasks. Consequential in fast verification of patients’ insurance coverage and benefit eligibility Providers can automate fee capture by employing Electronic Health Records (EHR). Having a vendor with his clearinghouse is a considerable advantage because clearinghouses help automate the revenue cycle and incorporate missing links between procedural and financial data codes for diagnostics. They also carry out advanced tasks such as reporting and analysis. The ultimate goal of precise verification of accepted funds is essential, which may be attained with reasonable Practice Management Solutions and various payment tracking services. Using an EHR and a Practice Management System can help with technology rollout. When claims are returned with no corresponding payment, the Revenue Cycle can be impeded payments. These claims are refused for various reasons, including inaccuracies in omission, erroneous data entry at registration, diagnostic codes that do not relate to procedural codes, late claim submission, claim non-authorization, claim duplication, and a lack of Patient information and incorrect coding. Another critical way to manage denials is to keep track of every claim that is denied. As a result, it is critical to identify the primary causes of the denial. This information is freely accessible through the clearinghouse. It is preferable if your vendor has its clearinghouse because they will maintain track of the follow-up procedure and denials on your behalf. Performance efficiency mainly depends on timely and consistent execution, keeping track of denials, and communicating with patients at the appropriate moment – all while adhering to a systematic process.
In this phase, healthcare A/R personnel scrutinize the payment received from the insurance provider or payer to see whether the payment is correct or if there is a matter that caused the payment to be suspended. Again, denied payments often result from errors in patient registration, providing another incentive to ensure that the data is correct and up-to-date. If an error is reported, the claim is sent to the clearinghouse, which is accountable for investigative and clearing the claim before it is returned to the payer for the substantial payment amount.
Underpayments, rejections, and non-payments are the most common problems. If healthcare practices are dissatisfied with the payer’s reimbursement, they would most likely seek to discourse and alter those charges through the next round of negotiations. Health care practices would almost certainly cite the lack of uniformity and consistency across payers as reasons for withholding payment. The challenge that payers face can be seen by reviewing the ongoing negotiations and arbitration proceedings between managed care plans, insurers, and beneficiaries.
As healthcare revenue cycle management evolves, the healthcare practices must maintain the most significant standard of patient-centric care by functioning as one unit. To run on all cylinders, each department’s goals must be synchronized. That necessitates accurate contract data and a clear communication line so that hospital staff understands their role in maintaining the revenue cycle. The healthcare system has become complicated with numerous stakeholders and channels of communication, which can result in delays in payments to the insurance company. Consider using medical billing software for your practice and ensure all your transactions are processed on time.
All of the information in this blog is intended to give you a better understanding of what is Revenue Cycle Management in healthcare and help you decide if it would be beneficial for your practice. Using our quality healthcare billing and management software, your staff can focus more on providing excellent patient care rather than managing health insurance claims. Now that you know what RCM is, it’s time to implement it in your practice.