Healthcare revenue cycle management is taking care of a healthcare organization’s finances. This includes things like billing, coding, and getting paid. If you are new to the revenue cycle or have been doing it for a while but need help with your processes, here is an overview of what it is and how it works.
Revenue cycle management (RCM) is a process that directly affects the financial health of the healthcare industry. Revenue cycle management services can help improve billing and coding accuracy while reducing the number of denied claims, appeals, and follow-up work.
The phrase “revenue cycle management” refers to precisely what it sounds like: a method that healthcare providers can employ to manage the administrative and clinical operations included in their revenue cycle. The revenue cycle starts as soon as a patient calls a healthcare provider to make an appointment. The revenue cycle is over when all the money for the appointment and treatment has been paid.
Revenue cycle management’s goal is to find any problems in the provider’s revenue cycle and fix them. With good revenue cycle management, care providers can get the most money back from their claims and make more money. This helpful guide will discuss the benefits of hiring someone else to handle your medical billing. We’ll also answer some of the most common questions about the process and point people to places where they can learn more.
What is healthcare revenue cycle management?
For a healthcare organization to be successful, it must process claims quickly and make sure that patients know what they owe and when they need to pay for services. The goal of RCM is to get more money from patients, reduce bad debt, and make patients happier by cutting down on wait times and making it easier for them to get care.
It manages an organization’s whole revenue cycle to ensure that claims are processed quickly and correctly. RCM can be used at every level of an organization, from hospitals and clinics to doctors’ offices and individual providers. The most crucial part of revenue cycle management is getting paid back. About half of a hospital’s operating income must come from it. Reimbursement is how a hospital or other healthcare provider gets paid for their patients’ services. It’s also known as “claims processing,” and it involves sending claims to insurance companies so they can pay you back. Reimbursement is how a hospital or other healthcare provider gets paid for their patients’ services. It’s also known as “claims processing,” and it involves sending claims to insurance companies so they can pay you back.
What is reimbursement in Revenue Cycle Management?
Reimbursement is how a hospital, practice, or clinic gets paid by a third-party payer for their patient services. In the U.S., insurance companies and government agencies work together to pay back patients through a complicated system.
To put it simply, it means getting paid for health care services. For example, when you’re sick and see a doctor, you have to pay for your visit (or, more likely, your insurance pays). The doctor will then send a bill to your insurance company. The payer, a private insurance company or a government program like Medicare or Medicaid, pays the doctor for their services based on a negotiated rate or markup on top of what they charge each patient.
Our procedures for denials, appeals, and appeals follow-up
Management of denials and appeals procedures are critical components of revenue cycle management in healthcare. Denials occur when your patient is not eligible for the service or benefit that you have requested. This can happen for several reasons. The patient might, for instance, be ineligible for coverage because of a pre-existing condition. Alternatively, your patient may have yet to reach their deductible or out-of-pocket maximum—more information regarding what causes denials can be found here.
When a provider disagrees with an insurance company’s decision to withhold payment and requires extra information or explanation from their payer before accepting the claim as final, the appeals workflow is used. This stage is also known as “following up on refused claims.”
Here are some of the tasks and workflows that come with managing procedures for denials, appeals, and appeals follow-up:
Managing refused claims: When a payer denies a claim, providers must understand why the claim was denied and any additional information that may be used to support the claim. If relevant, you may be entitled to contest or appeal the judgment.
Managing appeals: Effective management of your billing or reimbursement process necessitates discipline in both data input and adherence to industry standards in patient care (e.g., ICD-10). Incorrect invoicing may result in payment disputes from payers, affecting cash flow and delaying collections from patients awaiting treatments or services.
Our workflows for appeals follow-up: If your organization does not have a defined business procedure for managing payer denials or appeals decisions, no single individual will be accountable for tracking these decisions throughout their entire lifecycle—from the first
Denial to ultimate resolution: Due to the lack of a formalized process, your organization may miss out on critical opportunities, such as discovering and appealing denials. Furthermore, it may result in a delayed resolution and other undesirable repercussions (e.g., increased costs and fewer payments).
Healthcare businesses can benefit from healthcare revenue cycle management because it helps them manage their finances better and reduce risk. This can be accomplished by utilizing the appropriate procedures, techniques, and experts in the RCM industry. To help its clients run their businesses more efficiently and cut expenses while growing revenue through better cash flow management, Medusind offers end-to-end RCM services.
Importance of Revenue Cycle Management in Healthcare
By using RCM services, healthcare organizations can save millions of dollars while improving patient care and satisfaction.
Because reimbursement rates are frequently lower than the cost of treatment, hospitals must find ways to fill the gap. Hospitals can accomplish this by contracting out their medical billing work.
What is the process of healthcare revenue cycle management?
The process of revenue cycle management directly impacts healthcare organizations’ financial stability. It’s a different way of looking at financial health, and it can transform how a healthcare company views its bottom line and conducts business.
By combining your payment procedures into a single, efficient operation, RCM offers a foundation for improving your revenue cycle performance. You can manage billing and collections more effectively—and get paid faster—by automating tedious operations and utilizing technology.
When a patient arrives at your hospital for care, information about that patient is recorded in an electronic database. Your insurance company and Medicare will then receive this information electronically. The insurer will subsequently reimburse you for your services with a check. This can take anything from three days to two weeks, depending on the insurance company’s policies and how quickly they handle claims from various hospitals.
It can be challenging to get paid on time or at all if you need a staff member skilled at haggling with insurance providers. Because it frees you up to concentrate on caring for patients while someone else takes care of the paperwork, outsourcing your billing department can be a great idea.
Revenue Cycle Management Obstacles
A straightforward and logical way to conduct business is to have a procedure for collecting money for services that have already been rendered. However, practices can only sometimes effectively manage all or some components of this process. Effective revenue cycle management faces many obstacles, some specific to the U.S. healthcare sector.
1. Reimbursement models and healthcare policies
The complex reimbursement models developed every few years and the constantly evolving healthcare rules present one of the largest hurdles in revenue cycle management. These revisions must be kept up to date, and practices must ensure that their personnel is aware of them and follows the rules when performing their duties. It could be challenging to become an expert in every facet of the transition, particularly for smaller practices.
2. Getting money from patients
Patients are now accountable for a more significant portion of their healthcare expenses due to new legislation and the development of consumerism. Practices must learn to strike the right balance between collecting patient payments and avoiding using “high-pressure sales tactics” that can irritate patients and make them look for other care. This circumstance can be prevented by consistently educating staff and patients on payment routines and expectations and developing alternate payment alternatives, including payment plans and online payment.
3. Following a claim through all stages.
If a procedure is not set up for tracking claims, errors or delays are not quickly found and fixed, costing money.
4. Denial management
Denied claims are annoying and hurt a practice’s financial line. The likelihood that practice won’t be compensated for already-performed services rises with each denial. In addition, practices are losing a sizable portion of the money due to the high number of denials (14%) and claims never refiled (50%). An efficient denial management plan includes insurance follow-up services and AR (accounts receivable) management to increase the likelihood of receiving payment.
5. Training of employees
Every staff member involved in any part of the revenue management cycle must receive appropriate workflow, policies, and procedures training. When staff members are informed about their responsibilities and functions, they can fulfill those roles and operations accurately and efficiently. This is where adequate and successful staff training may pay off, despite the potential time and financial expenditures involved.
Technology, healthcare legislation, and reimbursement methods have all been evolving at an accelerated rate. For healthcare organizations to preserve their financial viability, these pose tremendous hurdles. However, revenue cycle management strategies that are well-thought-out and effective can make the difference between practices fighting to survive and those that are successful and prosper.
Automation and streamlining practices have the edge over those bogged down in time-consuming, tiresome tasks that do not lead to the desired result—the highest payment for supplied services at the earliest opportunity.