Healthcare revenue cycle management is a vital and complex process that impacts the financial viability of healthcare organizations. Revenue cycle management (RCM) is managing and collecting payments for the services and products a healthcare organization provides. A healthy and prosperous RCM process helps ensure timely revenue, steady collections, and financial viability for organizations, making it possible to focus on delivering quality patient care. Revenue cycle management includes billing, insurance verification, eligibility determinations, pre-authorizations, claims submission, and post-payment collection. The goal of RCM is to ensure that patients are billed for services promptly and that payments are received consistently and promptly. A well-run RCM process can help improve the financial stability of healthcare organizations and ensure that patients receive quality care. For a better understanding of why is revenue cycle management important? Go through this article.
The variability of factors contributes to the success of healthcare practices. Revenue cycle management is one of the most crucial of all of them.
A systematic and organized approach to Revenue Cycle Management brings various compensations to clinics and the entire healthcare system. In addition, Poor management and medical billing techniques can result in financial losses for the healthcare practices and potentially threaten its capacity to stay in business. As the United States healthcare practices transition to value-based reimbursement, simplifying operational procedures can assist an organization in being financially viable while also aiming to offer a superior patient experience.
Over the last few years, many healthcare practices have chosen to outsource revenue cycle management. Becker’s Hospital CFO Report performed an analysis and discovered:54% of healthcare practices comprehended that outsourcing revenue cycle management would proliferate efficacy and expand their firm’s financial health.
Currently, 83% of hospitals outsource at least accounts receivable and collections services from medical billing firm. 79% of healthcare practices confess that they needed to eliminate financial medical coding and technology vendors who couldn’t provide a return on investment (ROI). Because of poor management of medical billing and coding services in healthcare practices.
Healthcare Revenue Management Cycle
Hospital Revenue Cycle Management is becoming increasingly vital to the need for healthcare cultivation and improvement. The Healthcare Revenue Cycle Management sector has grown steadily, thanks to revenue cycle management companies.
The United States Healthcare revenue cycle management market is predicted to be worth more than $126 billion by 2021. According to Grand View Research Group, the healthcare industry is only going to an upturn, with an anticipated 10.3% progression rate until 2030.
Many small-to-medium-sized physician offices in the United States struggle with billing and reimbursement, often referred to as revenue cycle management. Because of the increasing complexity of running an independent medical practice, Medical revenue cycle management is becoming gradually challenging.
Rapidly changing government regulations, payer standards, restructured coding, and stringent performance measures cause physician practice billing departments’ misperception. RCM Teams struggle to stay up, jeopardizing a practice’s financial cash flow and medical revenue.
Outsourcing revenue cycle management (RCM) activities to third-party professionals can be a magnificent idea if your practice needs assistance. Let’s look at the Why is Revenue Cycle Management Important?
Indicating to Outsource Revenue Cycle Management
When deciding how to manage revenue cycle management operations, it is critical to consider numerous factors.
- When considering outsourcing, ask yourself the following questions:
- Is there enough people in your organization to conduct RCM operations?
- Do staff members have the requisite abilities, or will extra training be required?
- What is your overall revenue cycle management budget?
- How many patients do you see daily?
- What is the consequence of revenue cycle management in healthcare practices?
Healthcare providers use revenue cycle management (RCM) to ensure they are timely and adequately reimbursed for their services. While this is advantageous to the physician, it is also advantageous to the patient.
Before we get into why securing reimbursement makes RCM so vital, let’s outline RCM.
What exactly is Revenue Cycle Management RCM?
Revenue cycle management is exactly what it sounds like: a technique that healthcare providers can employ to manage their revenue cycle’s administrative and clinical duties. The revenue cycle begins when a patient contacts a healthcare practitioner to plan an appointment. The cycle is complete when all fees for the visit and treatment is collected.
Revenue cycle management aims to identify and resolve any areas of friction in the provider’s revenue cycle. Healthcare providers can maximize claim reimbursements and expand income with well-organized revenue cycle management.
There are numerous steps in the healthcare revenue cycle. This implies that there are several opportunities. Any faults in the revenue cycle might cause the provider’s reimbursement from insurance and patients to be delayed or halted entirely.
Let’s take a look at the processes in the healthcare revenue cycle to get a better grasp of where errors can arise and how RCM can prevent them:
Pre-Authorization and Eligibility Verification
When a patient schedules an appointment, the healthcare practitioner gathers information to create a patient account. This includes gathering the patient’s insurance information and verifying their eligibility for coverage. Even if a patient already has an account with the provider, revenue cycle management highlights the need to complete this stage correctly. Incorrect information or ineligible insurance will result in a denial of claims later in the revenue cycle. This means that the provider’s reimbursement payment is delayed. It also involves more work for the clinician, who must then review the patient’s information to remedy any inaccuracies.
Charge Capturing and Coding
Charge capturing refers to converting patient services into billable costs using universally recognized medical codes. To calculate proper reimbursement amounts, insurers use these codes to manage the revenue cycle. The insurance company may deny the patient’s claim if proper medical coding is not used. As a result, provider reimbursement is delayed. It also costs the provider time and money to investigate and appeal declined claims. Effective revenue cycle management ensures coding correctness, permitting denials to evade entirely.
After a patient’s treatment is appropriately coded, the claim is submitted to the insurance company for approval. Revenue Cycle Management guarantees that this submission occurs as soon as possible by tracking and managing the claim from the beginning of the process.
After the patient’s claim is authorized, the insurance company reimburses the provider depending on the patient’s eligibility. If a balance remains after insurance reimbursement, the provider is responsible for contacting the patient to collect the balance. Revenue cycle management speeds up the patient payment process by optimizing claims processing. Furthermore, RCM places a greater emphasis on front-end processes such as insurance eligibility verification, so patients will know what out-of-pocket charges they are responsible for paying from the start.
This, once again, aids in avoiding any delays in collecting the final payment.
Medical Service Evaluation by Revenue Cycle Management
Care providers are encouraged to study clinical treatment data when revenue cycle management is done systematically throughout billing processes. Analyzing this data allows providers to discover where faults occur in the cycle and identify solutions to reduce costs. As a result, provider revenue will grow, and the patient experience will improve.
This is how RCM assist in all medical billing process to streamline all daunting tasks of healthcare practices.
Operative revenue cycle management ensures that these processes are completed thoroughly and precisely, permitting providers to prevent revenue delays or loss.
Although the primary purpose of RCM is to enhance provider revenue, it also provides additional benefits. These benefits benefit providers and patients, making revenue cycle management even more critical. Let’s look at some more points that depict revenue cycle management’s importance.
Error Detection and Resolution
Implementing RCM allows healthcare providers to identify where errors occur in the revenue cycle more quickly. This reduces the likelihood of claim denials because over 90% of claim denials are attributable to easily avoidable technical errors, such as missing information in the patient’s chart or incorrect coding. Providers receive their payments fast when these errors are avoided, and claims are granted on the first attempt. They also save money by not having to investigate and appeal disallowed claims. Claim denial prevention can generate an additional million dollars in revenue for the average healthcare practice. This single point alone should be reason enough for healthcare practitioners to inquire how an organization can boost its revenue cycle management.
Compact Administrative Burden
Preventing claim denials also decreases the administrative load. Administrative staff members have more time and energy for patient care when they do not have to spend time and energy investigating and appealing refused claims. Furthermore, RCM’s particular attention to front-end activities improves interactions between administrative personnel and patients. Appointment scheduling, intake form completion, and payment processing are all optimized to provide a better experience for everyone.
Preventing Healthcare Fraud
Another key advantage of RCM is its ability to prevent healthcare fraud and misuse. Every year, healthcare fraud costs the healthcare business billions of dollars. A fraud inquiry can cost a provider both income and reputation. Incorrect medical coding, whether deliberate or unintentional, can lead to healthcare fraud investigations.
Inhibit Incorrect Information
Providers can also up code procedures. Upcoding is the practice of demanding a higher payment rate for services that may not always justify it. With the emphasis on correct data collection, invoicing, and coding in revenue cycle management, providers are far less likely to send inaccurate information to insurance companies. Furthermore, RCM can keep providers updated on ever-changing healthcare rules, ensuring that unintended fraud is never a problem.
Patient deception can also contribute to healthcare fraud. If they provide incorrect data or lie about their insurance coverage to get the therapy. However, one of the first tasks in revenue cycle management is insurance verification. This implies that administrative employees will discover any incorrect insurance information promptly. Providers might invest their excess revenue in patient care. After all, the primary goal of any healthcare professional is to deliver high-quality patient care.
Revenue Cycle Management: A Constructive Tool for Both Providers and Patients
RCM’s overarching goal of improving provider revenue prioritizes the patient. Revenue cycle management boosts provider revenue while reducing time spent on administrative and clinical tasks. This implies spending more money and time on the patient and their therapy. That is why many providers prefer to work with Bellmedex. With the help of our skilled payor contract negotiators, you’ll have all the tools you need to maintain a smooth revenue cycle. We are knowledgeable, thorough, and committed to assisting healthcare facilities in providing the best possible patient care.
How Can You Achieve Success in Healthcare Revenue Cycle Management?
You get an insight into why is revenue cycle management important. To learn more about the importance of Hospital revenue cycle management companies, ponder on some key points. Here’s how to develop your revenue cycle so you can process claims and be paid more rapidly: –
- Before registering your patients, always check their insurance eligibility. According to prominent studies, eligibility concerns are the leading reason for claim denials.
- Always keep expenses lower than revenue to allow for some flexibility and margin.
- Improve communication with payers and inform them about the payment technique.
- Use aid in contributions to maintain financial strength.
Improve your front-end duties and collect all data required for reimbursement in advance.
The procedure from initial delivery to complete payment for hospital-based physician specialty revenue is complicated. At the very least, this frequently results in a lengthy delay between service performance and money collection.
As a result, adopting effective RCM is critical for all healthcare systems. RCM processes are in place for each healthcare practice service line. The question is if they are well-thought-out and consider the specialty’s intricacies. Furthermore, given the volume of patient information in the revenue cycle, any inaccuracies could have significant legal and, thus financial repercussions. Again, revenue cycle management is a critical tool for reducing the frequency and severity of errors.
Today, revenue cycle management is an essential component of healthcare. A good revenue cycle management (RCM) process is critical to an organization’s fiscal health and provides the most incredible quality of service. Hospitals and health systems must be acutely aware of how they work, how to improve them, and how to deal with everyday issues in a quickly changing environment characterized by increasing expectations. A healthy and prosperous healthcare RCM process helps companies secure timely income, consistent collections, and financial viability, allowing them to focus on providing excellent care to patients.
RCM is unique to each organization and its ability to manage medical billing and revenue efficiently. Regardless of size, the bottom line is the same: growing income while decreasing debt and spending. These key features necessitate cooperation from the patient’s healthcare team and the administrative team of an organization. The modern patient expects a smooth and integrated experience from when they arrange an appointment or walk into a hospital or office to when they receive their bill. Teams must work in unanimity to ensure the most efficient RCM process possible. Each stage in the process, whether it’s charge capture, claim submission, coding, patient collections, registration, remittance processing, third-party follow-up, or utilization review, impacts how quickly the system works.
90% of claim denials are preventable; proactively organizing your payments will help you greatly enhance your money and alleviate many troubles. As a result, efficient revenue cycle management is required in your healthcare company to gain income faster and prepare better for the future.
The purpose of good revenue cycle management for any hospital or health system is to streamline the revenue cycle, and guarantee payments are collected with minimal impact on the organization’s capacity to provide care. By simplifying and optimizing this payment cycle, an organization can reduce the number of errors and unnecessary processes, lessen the administrative staff’s workload, reducing the time it takes to process, and collect payments. The benefits can be twofold: increased money, debt reduction, and more time to focus on providing outstanding care to patients.