For the past few years now, favorable Medicare and Medicaid federal regulations have led to more health care providers implementing electronic records for processing claims and receiving payments. This has seen institutions improve their efficiency and strengthen their financial accounts.
Health care providers who choose to integrate revenue cycle management (RCM) in clinical applications have benefited greatly as well. This integration has bridged the gap between clinical care issues and health IT. Today, you are likely to notice patient care applications intertwined with an element of RCM, ranging from typing procedure codes to billing codes, among other elements.
This guide will help you understand all the aspects of revenue cycle management systems. We dive deep into what RCM is, how it works, why it is beneficial, and RCM best practices, to name but just a few.
Would you like to learn more? Let’s get right into it.
What Is Revenue Cycle Management?
Revenue cycle management (RCM) is an institutional financial process that uses medical billing software. It enables health care providers to track patient care procedures from the moment of registration all the way to appointment and the final payment of balance after service delivery.
The process is intended to link the clinical and business elements of a health care institution. It is achieved through the integration of administrative information that bears patient’s data, insurance policy with the actual treatment received by these patients.
Why Is Revenue Cycle Management Important?
Effectively managing your revenue cycle is a crucial aspect of your health care institution’s operations. The overall goal of RCM is to increase your revenue. This is achieved by identifying and fixing points of revenue leakages.
The leakages may be as a result of waste, misappropriation such as unnecessary procedures or tests and fraud. An efficient hospital RCM takes care of both the security of patient financial information and PHI. Lastly, health care providers need to adopt RCM processes for safe automation of the institution’s process so that more time can be spent on patient care.
How Revenue Cycle Management Works?
To understand how the RCM process works, these are the steps taken from the beginning to the end.
- Patient Eligibility: Upon arriving at the healthcare provider, a patient’s eligibility for insurance is verified first and information stored in the facility’s EHR.
- Charge capture and coding: Here, the patient’s visit and service received is coded using ICD-10 standards into a bill.
- Patient co-payments and deductibles: The patient makes any co-payments before leaving the facility. Deductibles are the fixed charges in a health plan that you have to pay before the insurance company starts paying for those health care services received.
- Submission of claims: The bill is submitted to the insurance company through a clearinghouse.
- Reimbursement: Based on the patient’s insurance coverage, the payer(insurer) determines and reimburses what the healthcare provider should receive.
- Denials: The RCM process cannot be complete without the management of denied claims. When this happens, the hospital’s billing department makes necessary amendments and resubmits the claim. This may involve reviewing patient records, scrubbing code errors, and direct consultation with the payer.
- Patient collections: In case the patient receives services beyond their coverage, the extra amount not paid after reimbursement is billed to the patient directly. Billing services commence through prices to recover the balance.
How to Improve Revenue Cycle Management
The RCM process can be improved if the hospital gets a better understanding of patient financial responsibility. This helps to devise a streamlined payment collection method that ensures they maintain financial stability.
Moreover, improving RCM requires providers to implement a competent billing infrastructure that includes both software and staffing. Best RCM billing practices are discussed in detail below.
Revenue Cycle Management Benefits
There are multiple benefits to a healthcare provider who implements an effective RCM system. Let’s take a look at some of the value-adding benefits of a revenue cycle management services.
- Saves time: An effective RCM should be designed to save the time taken between the provision of service and receipt of payment. Time is also saved by the automation of duties that were previously handled manually.
- Saves money: Revenue cycle management systems provide insights into denied claims. Besides, by providing a straightforward claim filing process, it helps to cut down on denied claims.
- Provides a secure revenue monitoring system: With RCM, a healthcare provider can use software to set and monitor their revenue goals. This helps them to visualize possible areas that need improvement.
- Makes inter-system communication easier: With the help of a compatible RCM, communication between the EHR and accounting systems becomes easier and more reliable.
- Links the institution’s clinical and business sides: It bridges the gap between the business and clinical sides of healthcare.
- Secure storage of health billing records: Healthcare providers utilize RCM systems for preserving and managing patients’ billing records.
- Lessens administrative duties: A robust RCM takes care of most administrative tasks such as alerting patients of their scheduled appointments. It also reminds payers and patients of outstanding bills as well as questioning insurers during claim denial.
Want to find out how we do it? Read on, or contact us for a quick chat.
Revenue Cycle Management Challenges
Factors That Can Affect RCM
The Impact Of Healthcare Regulations
The hospital’s revenue cycle management process has been affected by several healthcare regulations.
The HITECHI Act, for instance, provides that eligible healthcare institutions receive financial incentives through Medicaid and Medicare programs. The incentive cushions their investment in health IT such as EHRs that would eventually see their RCM get better.
Many providers have moved to take advantage of this IT incentive program. This will help them transition to an integrated patient accounting and EHR. Besides, it will have a considerable impact on hospital revenue cycle management, according to the Healthcare Information and Management Systems Society (HIMSS). New accounting systems that include changes in registration and scheduling can affect preauthorization procedures.
Another important aspect of the health regulations was announced way back in 2013, and it touched on ICD-10 codes. From October 1st 2013 onwards, any claims that were incorrectly used would automatically lead to a claim denied. Some charge capture systems may still not be able to support ICD-10; hence its transition will require new training.
Revenue Cycle Leakage Points
Health revenue leakage points include:
Professional Billing & Collection Best Practices
Health revenue leakage points include: