What Is Revenue Cycle Management And What Are Its Benefits?
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Organizations in every industry must ensure that enough revenue is generated to cover expenses. This is also true in the healthcare industry. Unfortunately, many healthcare organizations have difficulty collecting reimbursements on time, which can have a negative impact on the quality of care they provide to their patients.
Many hospitals and clinics operate with limited resources and time. Furthermore, many employees must perform multiple roles, making it nearly impossible to stay on top of all tasks without making mistakes.
Because many hospitals handle billing using inefficient manual processes, the most common billing issues are caused by human error, such as data entry errors.
This is why successful medical practices employ a revenue cycle management (RCM) programme, also known as a streamlined billing process. Healthcare organizations use rules-based software to ensure that they generate the revenue to which they are entitled as soon as possible.
Source- https://www.indeed.com/career-advice/career-development/what-is-revenue-cycle-management
What Is Revenue Cycle Management?
Revenue Cycle Management (RCM) is the process of identifying, collecting, and managing revenue from payers based on the services provided by the practice. A successful RCM process is critical for a healthcare practice to remain financially viable while also providing quality care to its patients.
The shift towards value-based reimbursement and more holistic patient care has compelled healthcare providers to reconsider their approach to revenue cycle management. Poor billing practices can lead to financial losses and jeopardize the ability to provide quality care. Efforts to improve and streamline core operational procedures can assist providers in remaining financially viable.
Revenue Cycle Management Process
RCM (revenue cycle management) is a critical process for healthcare providers that involves managing the financial aspects of a patient’s visit from appointment scheduling to payment collection. The revenue cycle management steps are critical to ensuring that healthcare providers are paid on time for the services they provide.
Making Appointments
Scheduling an appointment with the patient is the first step in the revenue cycle management process. This includes gathering personal and medical information from them, such as their name, date of birth, insurance information, and reason for the visit. The demand for virtual assistants is increasing, and one area where virtual receptionists excel at is appointment scheduling.
Registration of Patients
After making an appointment, the patient must fill out registration forms with demographic and medical information. This information is used to verify eligibility and benefits and to provide accurate billing.
Verification of Eligibility and Benefits
To determine their payment responsibility, healthcare providers must verify their patients’ insurance coverage and benefits. This includes reviewing the patient’s insurance policy for co-pays, deductibles, and other payment information.
Examination of utilization
Utilization review ensures that patients’ healthcare services are medically necessary and meet insurance coverage criteria. This review is carried out to avoid unnecessary treatments that could lead to claim denials or non-payment.
Authorization and Referral
Before receiving speciality care or services, some insurance plans require a referral or authorization from a primary care physician or insurance company. Before providing services, the healthcare provider must ensure that the patient has obtained the necessary referral or authorization.
Defining Charges
Healthcare providers are required to provide a detailed breakdown of the charges incurred during a patient’s visit. This includes any medical devices used, as well as any services provided.
Billing and Coding
The coding and billing process entails assigning appropriate codes to medical procedures and services in order to ensure that the claim accurately reflects the care provided. This procedure assists in avoiding claim denials or incorrect payments. With constant changes in billing codes and administrative practice personnel under constant pressure, ideal conditions for revenue leakage from the practice are created.
Charge Publication
Healthcare providers post charges to the patient’s account after billing the insurance company. This procedure ensures that the patient’s account balance is current.
Making a Claim
The healthcare provider submits the claim to the insurance company for payment once the charges have been posted.
Clearinghouse Rejections
Insurance companies sometimes deny claims because of incorrect coding or incomplete information. Clearinghouses are used by healthcare providers to track and manage claim denials.
Source- https://www.okeasylife.com/steps-of-revenue-cycle-management/
Benefits Of Revenue Cycle Management In Healthcare
Let’s look at some of the most notable benefits of healthcare revenue cycle management:
Increase in Claims Paid Following Initial Submission
To ensure claims are paid the first time they are submitted, successful revenue cycle management places a premium on accurately completing front-end tasks. These front-end tasks include insurance verification, accurate patient information collection, and proper coding.
On average, between 5% and 10% of claims are denied after their initial submission. However, the majority of these denials are the result of human error and technical issues. These include coding and insurance verification errors, as well as missing information in the patient’s chart. In fact, approximately 90% of claim denials are avoidable.
When claims are denied, they can be bounced around for months between insurance companies and providers until all issues are resolved. The best way to avoid these costly delays is to ensure that the claims are correct before submitting them.
Increase your practice time Revenue and collection
Healthcare facilities must account for a wide range of expenses. They must not only pay for the services they provide to patients, but they must also pay their employees for the work they do. When claims are denied or patients are unable to pay for services in advance, payments to the healthcare facility are delayed. This makes it difficult for the practice to manage its expenses.
To avoid this, RCM assists practices in identifying patterns of claim denial. By recognizing these patterns, practices can work to avoid future claim denials and receive timely reimbursement.
Not only do denied claims cause reimbursement delays, but they also cost the provider money in claim investigations and appeals. In fact, practices spend an average of $15,000 reworking claims. As a result, effective claim denial prevention can generate more than $5 million in additional revenue for the average hospital.
Patient Experience Enhancement
With a greater emphasis on patient outcomes, effective revenue cycle management means better overall patient experience. Patients can expect more comprehensive and targeted care, which will reduce the likelihood of readmission.
RCM also streamlines processes such as scheduling, filling out intake forms, and billing, resulting in a more pleasant experience for both patients and administrative staff. Also, because RCM emphasizes thorough insurance verification from the start, patients will have a better understanding of their insurance eligibility from the start. That way, they won’t be surprised by any out-of-pocket expenses later on.
Reduced Administrative Burden
When a patient requests an appointment, the administrative staff is in charge of scheduling it, establishing or updating patient information, and, most importantly, verifying their insurance. These front-end tasks are streamlined with a revenue cycle management system, allowing administrative staff to work more efficiently.
Also, RCM ensures that these administrative tasks are completed correctly so that claims are not denied in the future. When claims are not denied, the administrative staff is relieved of the burden of investigating and appealing denials.
Also Read: Building a Continuum Workplace: Healthy Employee Engagement Practices
Conclusion
Revenue Cycle Management (RCM) is a critical process that healthcare providers use to effectively manage their finances. Everything from patient registration to billing and payment collection is covered. RCM has numerous advantages, including increased cash flow, decreased billing errors, increased patient satisfaction, and better financial decision-making. By streamlining the revenue cycle, healthcare facilities will be able to focus more on providing quality care to their patients, benefiting both the providers and the people they serve. Unlock efficiency with ProHance to transform your workforce management and RCM today!
Frequently Asked Questions
Q1: What Healthcare Billing Trends Can We Expect?
Difficulties obtaining payer authorization will continue, so facilities must maintain clear medical records and documentation to facilitate prompt payment and avoid claim rejections. Other trends in healthcare billing to be expected in the near future include an increase in the use of automation and predictive analytics, as well as an increase in the use of cloud-based solutions.
Q2: What Are the Industry’s Most Serious Billing Challenges Right Now?
Obtaining authorizations from payers has proven to be the most difficult challenge for the industry. This is due to the rising cost of healthcare. As healthcare costs rise, many insurance companies are finding it difficult to keep up with claim payments, hence the emphasis on the need to justify extended inpatient stays or other costly treatment modalities. Other factors that could have hampered payer authorization include facilities billing for services that were not provided, overbilling services, or incorrect service coding.
