According to Global Market Insights, healthcare revenue cycle management is projected to have a market value of over $275 billion by 2028. This highlights the significance of revenue cycle management to healthcare providers. Effective revenue cycle management leads to stability and profitability within the organization. However, many healthcare providers face difficulties in improving their revenue cycle. An optimized revenue cycle can lead to financial stability and better patient outcomes. Here are some tips for healthcare providers to enhance their revenue cycle management.
What is Healthcare Revenue Cycle Management?
Revenue Cycle Management (RCM) assists healthcare facilities in enhancing their cash flow, improving patient satisfaction, preventing financial losses, cutting costs, and complying with regulations. RCM software enables healthcare providers to bill insurance companies and patients accurately for services rendered, resolve denied claims, and perform in-depth analysis to identify and eliminate sources of revenue loss.
Healthcare RCM refers to the systematic approach of billing for medical services and obtaining revenue from start to finish. RCM entails a series of linked clinical and administrative duties, such as insurance confirmation, medical coding, invoicing, debt recovery, and disputes. Healthcare providers utilize Revenue Cycle Management (RCM) to oversee the financial side of patient treatment, including scheduling appointments, registering patients, and receiving payments. The objective of RCM is to optimize revenue by guaranteeing that all claims are precise, managed effectively, and reimbursed promptly.
Revenue Cycle Management Challenges
The process of collecting payments for provided services may seem straightforward; however, managing the revenue cycle can be challenging. Significant challenges arise in the process, particularly within the US healthcare industry. These difficulties can make successful revenue cycle management a complex and demanding task.
One of the most significant obstacles in revenue cycle management is the frequent changes to healthcare regulations and the intricate nature of reimbursement models. Healthcare practices must remain informed of these updates and ensure their staff is knowledgeable and adheres to the regulations. Acquiring in-depth expertise in these changes can be challenging, particularly for smaller practices.
Collecting Patient Payment
The patient’s role in covering healthcare costs is increasing. Collecting payments during or before a medical service eliminates the risk of non-payment. However, this can be challenging as many patients face financial difficulties and are not informed about their financial responsibilities. Patient pre-registration is crucial for obtaining accurate medical history and insurance information. This helps to reduce claim rejections and facilitates the payment process. Payment can be initiated earlier by collecting information about insurance coverage, supplementary insurance, maximum visits allowed, and the patient’s financial obligation.
Communication with health insurance providers is vital. Neglecting to follow up on submitted claims can result in denied, pending, rejected, or lost claims. By tracking claims and identifying issues with procedures or codes, it’s possible to raise awareness and prevent recurring problems.
Claim denials are frustrating and affect a practice’s financial performance. Each denial increases the risk of non-payment for services already provided. With a high percentage of denials (14%) and claims that go unfiled (50%), practices risk losing significant revenue. Implementing an effective denial management strategy, including insurance follow-up and AR management, increases the likelihood of payment.
5 Techniques for Enhancing Your Revenue Cycle Management Approach
Streamlining revenue cycle management to improve financial performance in a hospital or private practice is essential. Here are five techniques for increasing efficiency and maximizing income:
Clear Understanding Of the RCM Process
It’s important first to have a clear understanding of the process to improve revenue cycle management (RCM) processes. One suggested approach is to create a detailed outline of all the steps involved in your practice’s RCM process.
Scheduling: Collect patient demographics, obtain and verify insurance, and obtain prior authorizations and approvals
Visit: Collect copayments and deductibles, document visits, and assign diagnosis and CPT/HCPCS codes.
Checkout: Collect additional fees, schedule follow-up appointments, capture and enter charges in EHR and practice management system
Claim submissions and management: Submit claims through the practice management system, scrub claims, transmit claims to payers via a clearinghouse, send patient statements
Payment posting: Receive EFT postings, post payments manually, and review the explanation of benefits for accuracy
Accounts receivable management: Review insurance/third-party accounts, patient accounts, record adjustments, write-offs, and refunds, follow-up with denials or slow payments
Financial reporting: Review accounts receivable and run monthly financial reports
Update the process regularly
Regular review of processes is critical for optimal revenue cycle management. Regularly checking and updating procedures helps prevent problems before they occur. Cross-functional teams or strategy groups can assist in optimizing revenue cycle management in hospitals. If denial rates are a problem, establish a recurring group to investigate the cause and find solutions. These meetings should have clear goals and actionable items to enhance the revenue cycle.
Key Statics Monitoring
Regular monitoring of crucial statistics is essential for effective revenue cycle management. Observe disparities in claims filing and billing processes to identify and resolve potential issues promptly. Monitor metrics such as claims denial rates and reasons, bill settlement time, and appointment no-shows. If managing these tasks is challenging, consider outsourcing to professionals specializing in revenue cycle management using advanced technology and software. This allows you to focus on patient care while the experts handle the micro-management of medical billing and coding systems.
Improve Front-End Processes
It’s essential to make front-end adjustments to minimize denials and backend rework. Schedule eligibility checks, choose the appropriate payer, and ensure accurate insurance information to decrease errors. Streamlining processes and educating employees on new procedures can also help. Organizing POS data collection can significantly improve the revenue cycle. Collect copays or payments from patients before the service. Patients make payments promptly when given the option to pay online, a user-friendly and convenient option. The easier the payment process is, the more likely patients will comply. This simple step can significantly improve your revenue cycle management.
Conduct a Denial Audit
Improve revenue cycle management by examining denials for possible overpayments, underpayments, or errors. Reviewing the mistakes can reveal system weaknesses, enabling improvement and reducing the number of errors. You can do this internally or with the assistance of an external consultant. Through a denial audit, areas of weakness in your system can be identified and improved to minimize errors and improve your revenue cycle management.
In conclusion, implementing small changes in the right areas can significantly improve your revenue cycle management (RCM). A well-organized RCM process leads to consistent revenue generation and financial stability for your practice. Partnering with a leading industry partner can provide added benefits, such as saving resources and maintaining top-notch clinic management and patient care without sacrificing quality.
Revenue cycle management plays a crucial role in the prosperity of healthcare organizations. Managing every aspect of RCM effectively on your own may be challenging. I-Med Claims is here to assist you. We are a top-notch Revenue Cycle Management services provider. By partnering with I-Med Claims, many healthcare systems have observed an impressive increase in their medical billing and payment collections. Our RCM’s primary focus is to offer exceptional service, enhance reimbursements, and provide valuable financial insights into your practice.
Do you want to know how much your practice could earn with improved RCM? Get in touch with us.