There are many factors that go into managing a successful medical practice. One of the most important factors is revenue cycle management.
Through revenue cycle management, or RCM, healthcare providers ensure that they can perform service correctly and quickly. While this is certainly beneficial for the provider, it is also beneficial for the patient.
What is Revenue Cycle Management?
Revenue cycle management is exactly what it sounds like as a strategy that healthcare providers can use to manage the administrative and clinical functions in their revenue cycle. The revenue cycle begins as soon as the patient contacts the health care provider to set up an appointment. The course ends when all treatments & payments for the appointment have been collected.
The goal of revenue cycle management is to identify any friction points in the provider’s revenue cycle in order to resolve them. With proper revenue cycle management, caregivers can maximize their claims reimbursements and increase their revenue.
The Steps in the Healthcare Revenue Cycle
The healthcare revenue cycle consists of several steps. This means that there are many opportunities for errors occur. Any errors in the revenue cycle can result in provider and patient reimbursement being delayed or reimbursed completely.
In order to better understand where errors can occur and how RCM can prevent them, let’s look at the steps included in the healthcare revenue cycle:
Pre-authorization and eligibility verification
When a patient makes an appointment, the health care provider collects information to create a patient account. This includes collecting a patient’s insurance information and verifying their eligibility for insurance.
Revenue cycle management emphasizes completing this step accurately, even if the patient already has an account with the provider. Inaccurate information or ineligible insurance will only result in a claim being denied later in the revenue cycle. This means a delay in payments to the service provider. This also means more work for the provider, who must then check the patient’s information to correct errors that have been made.
Charge capturing and coding
Charge capturing is the process by which patient services are converted into billable fees using globally accepted medical codes. These codes are how insurance companies determine reimbursement amounts.
Without proper medical coding, the insurance company may deny the claim of the patient. This results in a delay in the payment of the service provider. It also costs the service provider time and money as denied claims and appeals must be investigated. Effective revenue cycle management ensures accuracy in coding so that denials can be completely avoided.
Claims submission
Once a patient’s treatment is correctly coded, the claim is sent to the insurance company for approval. RCM ensures that this transmission occurs quickly by tracking and managing the claim from the start of the process.
Payment collections
Once a patient’s claim is approved, the insurance company reimburses the provider based on the patient’s eligibility. If there is any balance left after the insurance has been paid, the provider is responsible for communicating with the patient to collect the remaining payment.
Revenue cycle management speeds up the patient payment process by streamlining claims processing. Additionally, due to the increased focus the RCM is placing on front-end tasks, such as checking insurance eligibility, patients will know right from the start what out-of-pocket expenses they are bearing. Again, this helps avoid any delays in collecting the final payment.
Medical service review
Comprehensive Revenue Cycle Management encourages caregivers to analyze clinical treatment data. Analyzing this data allows service providers to identify steps in the cycle in which errors are made and to identify ways to reduce their expenses. This, in turn, will help increase the provider’s revenue and improve the patient experience.
Why is revenue cycle management important?
The fact that the hospital physician specialty proceeds is that the process from initial delivery to full reimbursement is complex. At the very least, this often results in a long-term delay between service provision and payment being collected. In worse cases, this can lead to errors, confusion, and unnecessary redundancy.
Therefore, the implementation of an effective regional coordination mechanism is essential for all health systems. Every hospital service line has an RCM process. The question is whether it is well thought out, implemented and takes into account the nuances of the specialties.
Furthermore, the amount of patient information involved in the revenue cycle means that any errors can have significant legal (and therefore financial) ramifications. In other words, implementing revenue cycle management to reduce the likelihood and severity of errors is an essential solution.
What Are the Benefits of a Well-Run RCM Program?
Outsourcing your RCM to an experienced external provider can have significant benefits. These are some of the advantages worth noting:
- Improved Revenue Performance
Perhaps the most important benefit of an effective RCM program is that you will have improved revenue performance. This means that money comes in faster, more consistently, and with fewer expenses necessary to earn it. That’s mean, the primary goal of the Revenue Control management is to improve your financial performance.
- Greater Visibility
A key element in how effectively the RCM operates is visibility. By increasing visibility into the revenue cycle and examining data, your team can identify and resolve problems and inefficiencies.
- Demonstrable Value
Every organization needs to demonstrate its strength and performance to its stakeholders. These may be an investors, donors, trustees or strategic partners. Quality RCM provides you with the data needed to prove your value. This also makes it easy to align your healthcare organization’s interests with others for mutual success.
- Simplified Processes
Providing a secure, straightforward system for physicians, administrative staff, coding specialists, and others with revenue focal points can help improve your revenue cycle. Excellent RCM not only reduces errors but also eliminates frustration and confusion for your employees.
Now, you can learn more about revenue cycle management in Health Care from Optimus accredited from ATHE & QUALIFI, within just 48 training hours. And make a big change in your business and career.
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