Beginning with a patient’s first appointment and ending with the payor’s acceptance of final payment, revenue cycle management (RCM) in healthcare describes the process by which healthcare providers bill for services rendered and generate revenue for their practice.
The revenue cycle begins when a patient is scheduled for clinical service. Collecting information about the patient’s payers helps to verify the patient’s identity and assign a payer. Following the registration process, compliance documents are reviewed and authorized, and patient deductibles are collected.
As part of their routine patient care, medical staff members document the instruments and supplies they use for each encounter. The documentation is then used to total costs and assign codes that can be used to submit payments to the patient’s insurance company. After the patient is discharged, the information collected during the visit is compiled and entered into the billing system. The next step is to file a claim with the client’s insurance provider. Once the claim is reimbursed and all patient deductibles and charges are collected, the revenue cycle is concluded (or determined to be uncollectable).
The challenge for healthcare providers and hospitals is to increase revenue despite declining payment rates, and steadily increasing patient deductibles. However, implementing RCM best practices or outsourcing the work to a third party can increase cash flow and revenue significantly. Apart from these, practice owners can implement the following strategies to be able to improve their RCM and improve the overall financial performance of their practice. You can improve your revenue cycle management by reading this book on Amazon(paid link); Humanizing Revenue Cycle Management: A workbook with patient engagement strategies and tactics to improve patient experience and financial outcomes by April E. Wilson and Somlynn Rorie
The Submission of claims in a timely manner: Numerous healthcare organizations fail to meet filing deadlines because claims are not submitted promptly. Medicare recipients have one year from the service date to submit a claim, while policyholders with many private insurers have only three months. If clinical services are not billed by the due date, the practice may have to write them off. It is essential to establish procedures to ensure that these deadlines are met.
Improved patient relationship: Improving patient relationships is a priority for healthcare providers that want to maximize RCM. Patients are more likely to remain loyal to the practice if the medical staff is proactive in increasing patient satisfaction and building rapport with them. To encourage quick payment, the medical staff must explain the patient’s financial obligations, payment options, and what to expect from the appointment both verbally and in writing.
Automate eligibility checks and authorizations: Verifying the patient’s insurance status at registration is the first step toward efficient RCM. Insurance providers are getting pickier about who they’ll cover and whether they’ll give you the green light to start treatment immediately. By automating routine clinical processes like prior authorizations and eligibility checks, we can help streamline clinical workflows, shorten the revenue cycle, and free up front office staff to focus on other duties.
Invest in technology: Investigating and following up on unpaid claims, correcting them, and resubmitting them is time-consuming. Using automated software to handle the process will go a long way to improve payment collection. Automated software solutions make it easier to perform tasks like prior authorizations, eligibility checks, medical billing and medical coding, and they can also alert you to problems that need fixing before claims are submitted. Automation shortens the time it takes to get reimbursed for your company’s unpaid claims and reduces the human labor required to process those claims.
Establish Patient Financial Responsibility before treatment: Revenue cycles in the healthcare industry slow down when patient financial responsibility isn’t established at the early stage of treatment. Since medical practices often aren’t paid in full for their services, they often need to follow up with patients and collect payments from third-party vendors. In order to ensure that patients pay their bills, medical practices should collect as much money as possible from patients by having them pay in advance and giving them various payment options such as deductibles and copayments.
Managing claim denials: Managing claim denials plays a significant role in enhancing patient payment.
Claims may be rejected or denied if they contain incorrect patient information or contain billing and coding errors.
Any medical practice must track and monitor claim denials in order to identify patterns and find out why they occurred in order to prevent future occurrences. To minimize and prevent claim denials, medical practices should train their staff to recognize and avoid billing and coding errors that can result in claims being denied.
If you need help improving your revenue cycle management, contact us for a free practice analysis. Let’s help you in choosing the right tools, ensuring you are paid in a timely manner and improve the overall financial health of your practice.
