Revenue cycle management (RCM) is a financial management technique that assists an organization in tracking, identifying, collecting, and managing incoming payments. This enables businesses to establish financial transparency within the organization and charge patients the appropriate amount for the services and healthcare they receive.
The definition of revenue cycle management in healthcare stays the same. Its purpose is to assist institutions in determining required copayments and sending treatment charges to individuals and health insurance companies (among other tasks). By using RCM, healthcare facilities can avoid overcharging their patients, enhancing the patient experience and increasing their credibility.
But what exactly is revenue cycle management in healthcare? We’ll go through what it looks like in practice, how it can improve the financial performance of the healthcare industry, and other important points about the subtleties of healthcare RCM.
What is the Goal of Healthcare Revenue Cycle Management Companies?
What is the significance of revenue cycle management in healthcare? RCM’s overarching goal in healthcare is multifaceted, and it involves improving:
- Communication between patients and health insurance providers
- Payment for patient care (aka determining patient responsibility)
- Receipt and reconciliation of revenue
However, the most basic explanation of RCM in healthcare is that it unites the industry’s commercial and clinical sides. RCM integrates administrative and healthcare data to ensure that each patient is cared for and that the facility receives its fair share.
The 7-Step Healthcare Revenue Cycle Management Process
Registration of Patients
First and foremost, you must collect the following information from a patient:
- Address at home
- The email address
- Telephone number
- The birthdate
- Insurance details
This information will assist you in contacting the patient when billing information is required. Typically, you will only need to collect this information once, when the patient checks into your facility for the first time. You should ensure with the patient that their contact/insurance information is still correct at each subsequent appointment.
Diagnoses and medical services are represent by globally recognize codes in the medical billing company. Medical establishments that use them provide insurance carriers with a precise reference point for mandatory reimbursements.
Capture of Charges
Charge capture occurs when information about the service provided to the patient is forward to billing. There are two popular approaches to this step:
Automated: The patient’s medical service information is automatically retrieve from the documentation created by your facility during the patient’s registration. This approach eliminates human error and accelerates the procedure.
Manual: This is the traditional technique, in which the employee at the front desk enters the patient’s medical treatment into the system and sends it to billing. Someone else will need to complete the billing procedure after billing receives that information.
Both approaches offer advantages and problems, as some data may be distort during the transfer process.
Submission of a Claim
Once the charges have been gathered and coded, a claim is submit to the insurance carrier. The price is establish by the fixed rates of each medical code associated with the claim. If the claim is correctly fill out, the insurance company can make the payment swiftly. If there are any mistakes, the insurance company may send the claim back to the facility to be correct. To avoid payment delays, claims should be examine by software or a billing/coding specialist. They can swiftly detect and repair problems before submitting claims to insurance companies.
Correspondence on Insurance
Following the submission of the claims, discussion with the insurance provider continues to follow up on what has and hasn’t been paid as it relates to patient responsibility.
This step is especially important if the insurance company is taking its time processing payment. It may also identify some roadblocks that are impeding the provider’s capacity to pay. For example, the insurance company may avoid payment completion because it is currently negotiating a contract with the institution or the patient.
By this point, everything should be paid for. It is now time to reflect on how the procedure went. This is when a report of specific data points, such as how long it took to collect payment and other issues, can be create. Determine how to improve the process to get funds more rapidly.
Billing and Collection for Patients
Typically, the patient will be required to pay for portion of the service costs out of their own pocket. This is calculate after the insurance contribution is deduct. Insurance payments should ideally be determined during a patient’s initial session. This allows the patient to make any and all payments when registering. This is preferable because it is generally difficult to get payment after the patient has left the facility. Otherwise, the registration contact information is use to send them an invoice for payment.
3 Revenue Cycle Management Strategies in Healthcare
What is the optimal RCM implementation process for your complete healthcare facility? Consider the following strategies:
In-house RCM: Hire the right personnel and get the best technology for the job. For years, most businesses have controlled their revenue circulation in this manner, although it is not always the best. As your facility expands, managing revenue circulation will become increasingly difficult as more patients walk through your doors. If you lack the necessary skills, processes, or experience, attempting to do it yourself may get increasingly difficult over time.
Outsourced RCM: Some hospitals will completely outsource their RCM to other parties. This technique has the advantage of entrusting your data and financial management to experts, but it requires you to give up a significant amount of control. Even with excellent communication, your facility’s financial data will be more fragment.
RCM Software (the Best Option): This approach combines the best of both worlds. Using RCM software gives you complete control over your financial data while receiving assistance from RCM professionals.
Revenue Cycle Management Benefits in Healthcare
RCM, like any program that promises to automate monotonous and error-prone operations, can provide numerous benefits to your medical facility. Here are some of the most important advantages of revenue cycle management in healthcare:
Reduced entry errors: RCM solutions include medical billing and coding services, which reduce the likelihood of data entry errors on claims. When your claims are error-free, you can avoid insurance provider denials and collect funds more swiftly.
Faster collections: RCM allows you to automate operations that would otherwise take hours to accomplish, allowing your facility to register more patients in a day, expedite invoicing and claims, and efficiently communicate with insurance carriers.
Improved patient experience: By streamlining the collection process, you are also expediting the payment procedure for the patient. Your patients would prefer to pay in full while they are still in your building; it is far more convenient than paying by mail. This enhancement in patient experience can also improve patient retention because you won’t be acquiring new patients as frequently.
Process simplification: Above all, RCM can provide much-needed simplification to the area of financial management.
Revenue Cycle Management Obstacles in Healthcare
Unfortunately, just because RCM can make collection easier does not imply it eliminates all of the issues that come with it. Here are some revenue cycle management concerns to consider:
Employee training: Implementing RCM tactics and services in your firm may need a steep learning curve. All staff involved in the RCM process taught on medical billing and coding standards, or they risk causing a discrepancy in the system and slowing down the entire process.
Data analytics overload: RCM allows you to acquire a large amount of data about your revenue management system. Unfortunately, if you don’t know how to examine the data, it’s nearly useless. Your data analysts appropriately taught on what certain datasets signify and how to use them to make business decisions about your RCM.
HIPAA compliance: Your RCM plan must adhere to HIPAA compliance guidelines. If it does not, you may face fraud and abuse claims.