From the second a patient makes an appointment to see their doctor, the provider of their medical services keeps close track of the financial elements related to their specific care and medical needs through specialized medical billing software. This process is necessary for medical facilities to ensure that they stay financially stable and in a state where they can help provide care to as many patients as possible.
What is Healthcare Revenue Cycle Management?
Revenue cycle management (RCM) is a specialized process used by the United States healthcare system to track the revenue earned from patients due to their appointments and encounters with the healthcare system. The revenue cycle begins with the patient’s appointment or hospital visit and ends when the hospital or provider receives payment for the services they have provided. The RCM field is one of the core components of health information management (HIM), which also covers patient privacy management and electronic health records (EHR).
For a medical practice to be successful, healthcare providers must ensure that they implement an effective and accurate billing process by establishing core accounting and collection protocols. The need for such protocols is only growing more pronounced as the reimbursement for healthcare services is steadily shifting away from fee-for-service payment models towards more value-based care.
The 7 Steps of the Revenue Cycle
Healthcare revenue cycles include seven unique steps, including pre-registration, registration, charge capture, claim submission, remittance processing, insurance follow-up, and patient collections. The following provides a list of information that healthcare providers should understand about this crucial cycle and its respective steps.
Pre-registration is the first and most critical step of the entire revenue cycle process. It allows the medical practice to record patient demographic, insurance, and eligibility information in real-time. This gives the healthcare provider the necessary information regarding the patient’s coverage, co-insurance, deductible, co-payments, and whether or not medical referrals will be required for their specific healthcare needs. Part of pre-registration involves discussing the patient’s financial expectations, including no-show and cancellation policies and time-of-payment requirements.
Registration solidifies the pre-registration process by ensuring that all of the patient’s payment information is entirely accurate, along with other essential information such as their phone number, address, date of birth, and more. Part of registration involves collecting co-payments by providers and creating referrals if a patient requires the services of a specialist within the medical field. This step is highly critical to the revenue cycle because, should the practice be audited, there is a risk of severe financial repercussions if the step is not completed correctly.
This third step of the revenue cycle can be conducted either through automated recording and billing software or through manual means. A healthcare facility receptionist records billing information by hand. Both approaches have a range of advantages and disadvantages, but the step must be conducted as thoroughly as possible no matter which method is used. Any mistakes during this step could result in missing charges and lost revenue, causing a financial blow to the healthcare provider.
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This step of the revenue cycle involves the provider sending information to a patient’s insurance carrier. A process known as “claim scrubbing” will be performed to ensure that all claims are clean and going accordingly, and if the claim is declared as clean, it will be paid by the insurance agency much more quickly. The process involves sending claims to necessary parties, resulting in the development of a transition report showing all incoming, outgoing, and dropped claims. Providers should ensure that all accounts are carefully reviewed to prevent errors and ensure that claims will be paid as promptly as possible.
Step five of the healthcare revenue cycle involves payment (or remittance) processing. Once patient claims have been sent, remittances will be sent back. An explanation of benefits will show the practice received payment for the services provided. Then allowables will be determined based on the contract the provider has with the insurance carrier. The insurance company will then issue payment for these services based on the stipulations of that contract. Several potential mistakes can be made during this step of the revenue cycle, so healthcare providers need to ensure that everything is carefully handled and monitored to prevent potential issues and revenue losses.
Step six involves an insurance follow-up where practices examine what has and hasn’t been paid and why. Accounts receivable (AR) reports denote what money is owed to a medical practice by patients and insurance providers based on the services they have provided and billed for during a specific period. The report will also indicate broken insurance-follow ups and why hold-ups may occur in payouts to the practice.
The last and most challenging step of the healthcare revenue cycle is payment collections. It is considered best practice for healthcare providers to require payment when services are provided to patients to prevent billing issues. It’s also recommended that medical providers set policies for collecting deductibles and copay payments from patients when they are present within the hospital or clinic to help prevent collection backlog. Practices can also work with daily statement cycles to help ensure they are paid correctly, which can help reduce the need for the involvement of a bill collector.
How to Be Good at Healthcare Revenue Cycle Management
For healthcare providers to operate effectively, they must maintain a successful and profitable healthcare revenue cycle by carefully managing all of the steps the process entails to ensure they are properly paid for their services. Providers should have stable revenue cycle management protocols to focus on progressing front-end tasks to help move claims and payments along swiftly. All steps of the healthcare revenue cycle must be managed with diligence to help ensure that providers receive proper compensation for their services. If you’d like more information on the telehealth industry, please consider checking out the range of quality resources and superior services provided by the industry experts at Visaya today.Are you in charge of a hospital, clinic, or private medical practice that requires the use of a cost-effective, top-quality Healthcare Information Management service? Consider contacting the industry experts at Visaya today to learn about everything they can do to help you keep your patients safe.