REVENUE CYCLE MANAGEMENT
Revenue cycle management is exactly what it sounds like—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 a patient reaches out to the healthcare provider to schedule an appointment. The cycle ends when the final payment for the appointment and treatment has been collected.
The goal of revenue cycle management is to identify any points of friction in the provider’s revenue cycle and resolve them. With proper revenue cycle management, care providers can maximize their claim reimbursements and increase their patient service revenue.
The Steps in the Healthcare Revenue Cycle
The healthcare revenue cycle consists of many steps. This means that there are many opportunities for errors to occur. Any errors in the revenue cycle can delay the provider’s reimbursement from insurers and patients or halt reimbursement altogether.
For a better understanding of 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 healthcare provider collects information to establish a patient account. This includes collecting the patient’s insurance information and verifying their insurance eligibility.
Revenue cycle management emphasizes accurately completing this patient intake step, even if a patient already has an account with the provider. Inaccurate information or ineligible insurance will only result in a denied claim later in the revenue cycle. This means a delay in the provider’s reimbursement payment. It also means more work for the provider, who must then comb through the patient’s information to correct the errors that were made.
Charge Capturing and Coding
Charge capturing is the process by which medical services are transcribed into billable charges using universally accepted medical codes. These procedure codes are how health insurance companies determine reimbursement amounts.
Without proper medical coding, the insurance company may deny the patient’s claim. This results in delayed provider reimbursement. It also costs the provider time and money as denied claims must be investigated and appealed. Effective revenue cycle management ensures entering correct medical codes so that denials can be avoided altogether.
Once a patient’s medical services have been properly coded, the claim is sent to the insurance company for approval. RCM ensures this claim submission happens quickly by tracking and managing the claim from the start of the process.
Once the patient’s claim has been approved, the insurance company reimburses the provider based on the patient’s eligibility. If there is any remaining balance after the insurance reimbursement, the provider is responsible for reaching out and collecting patient payments.
Revenue cycle management expedites billing processes by streamlining claims processing. Plus, because of the increased focus that RCM puts on front-end tasks, such as insurance eligibility verification, patients will know from the start what out-of-pocket expenses they’re responsible for paying. Again, this helps to avoid any delays in collecting payments.
Medical Service Review
Thorough revenue cycle management encourages care providers to analyze clinical treatment data. Analyzing this data allows providers to pinpoint steps in the cycle where errors are made and identify ways to lower their expenses. In turn, this will help increase provider revenue and improve the patient experience.