Revenue cycle management is an essential component of any successful healthcare organization. Without an effective billing department, your practice could lose thousands of dollars in payer reimbursement rates, patient pay-outs, and other income sources on which it relies. Healthcare providers use revenue cycle management (RCM) to ensure that they are reimbursed for their offerings correctly and quickly. While this is advantageous to the provider, it also benefits the patient. Revenue Cycle Management is regarded as the healthcare industry’s foundation, and a requirement for healthcare provider’s achievement. A well-rounded Revenue Cycle Management is directly related to hospital’s progress, and inefficient management of the RCM process can result in headaches that significantly affect the financial position.
What Is Revenue Cycle Management?
Revenue Cycle Management services effectively protect healthcare provider’ s financial positions by facilitating the seamless clinical and management operation process. The primary objective of revenue cycle management is to determine and resolve friction points in the provider’s revenue cycle. Healthcare professionals can maximize claim reimbursements and increase revenue with proper revenue management. There are numerous steps in the healthcare revenue cycle. This indicates that there are multiple opportunities for mistakes to occur. Errors in the revenue cycle can entirely delay or stop provider’s reimbursement from insurance companies and patients.
What Role Does Revenue Cycle Services Play In Healthcare Systems?
Let’s take a look at the steps in the healthcare revenue cycle to get a greater understanding of where inconsistencies can happen and how RCM can protect them:
Pre-authorization and eligibility verification:
When a patient schedules a consultation, the healthcare professional gathers information to create a patient account. That includes collecting the patient’s insurance information and validating their eligibility for coverage. Incorrect information or ineligible insurance will result in a claim being denied later in the revenue cycle. That means the provider’s reimbursement payment will be delayed.
Charge capturing and coding:
Charge capturing converts patient services into billable charges using universally acknowledged medical codes. Insurers use these codes to calculate reimbursement amounts.
Insurance company may reject patient’s claim on using inappropriate medical coding. As a result, provider reimbursement is postponed. Effective revenue cycle management must ensure coding precision, allowing denials to be avoided altogether.
The next step in revenue cycle management is to submit a claim. Once you have concluded charge capturing process, you must submit the correctly coded claim to the payer. RCM guarantees rapid claim submission by monitoring and controlling the claim from the initial stage.
When the claim is accepted, the insurance company reimburses the provider based on the patient’s eligibility. The provider is responsible for contacting the patient to collect the balance if there is any remaining balance. Revenue cycle management speeds up the patient payment process by simplifying claims processing. That helps to prevent any delays in accumulating the final payment.
Analysis and Review
Getting payment is technically the final step in the revenue cycle management process, but your practice also requires quality reporting technology to achieve a specified goal and avoid costly mistakes. Evaluating this information allows providers to detect where errors occur in the loop and recognize opportunities to cut costs.
Advantages of Revenue Cycle Management in Healthcare Industry
Here are the benefits of revenue cycle management in the healthcare sector:
Implementing RCM allows healthcare professionals to more efficiently recognize where problems happen in the revenue cycle. That reduces the likelihood of claim denials because approximately 90% of claim denials are due to entirely preventable technical issues, such as missing information in the patient’s chart or incorrect coding.
Reduced Administrative Burden
Avoiding claim denials also reduces the administrative cost. Administrative staff members have more time and effort for patient care when they do not have to examine and appeal denied claims.
Preventing Healthcare Fraud
Another significant advantage of RCM is its ability to prevent healthcare fraud. A fraud case can cost a provider both revenue and reputation. Furthermore, RCM can keep providers updated on ever-changing healthcare laws, ensuring that unintended scam is never an issue.
Healthcare professionals can receive reimbursements for their offerings more quickly if technical errors, claim denials, and fraud investigations are avoided. Furthermore, they can save hundreds of dollars on settling errors, appealing claims, and examining fraud.
We offer customized and adaptable solutions to satisfy your facility. We realize how vital medical billing and collections are to your facility’s sustainability and success. We can collaborate with you to develop a collecting process at both the revenue cycle’s front and back end. We are prepared to assist you in managing a wide range of revenue cycle issues. We can help you adapt to new developments in the RCM system and enhance your revenues to ensure the smooth operation of your healthcare facility. We are knowledgeable, thorough, and committed to assist healthcare facilities in providing the best patient care.