The capture, management, and collection of patient service income is accomplished through a series of administrative and clinical tasks known as the healthcare revenue cycle. This dynamic procedure essentially spans the course of a patient account’s lifetime.
In order to manage the administrative process of locating, collecting, and optimizing the income earned by all the numerous services these practices deliver to their patients, healthcare providers use a set of financial processes called revenue cycle management (RCM).
The full range of a clinic’s operations is covered, including financial strategy and policy, appointment scheduling, eligibility checking, service delivery, documentation, coding, billing and claim processing, denial management, and numerous more processes and elements in between. By automating a number of manual operations and lowering the costs associated with revenue collection, it strives to maximize the profitability of healthcare practices.
Software for revenue cycle management (RCM) helps providers to accurately bill insurances and patients for the services rendered, handle any claim denials, and use deep analytics to discover and fix revenue leaks.
Why is revenue cycle management crucial in the healthcare industry?
Healthcare organizations perform best when they are financially stable. But their survival is seriously threatened by mounting internal and external forces. An ideal concentrate on RCM processes has become more crucial than ever in an era characterized by rising deductibles and constricting payer reimbursements. In order to continue providing the best possible patient care and succeed as a commercial entity, healthcare organizations and medical practices must learn to optimize their revenue cycle.
Typical Revenue Cycle Services and Processes
A streamlined and effective approach must be established for RCM in the healthcare industry to be successful. Despite the fact that practices’ workflows vary, the fundamental procedures remain the same. They consist of:
Patient Scheduling and Registration
Patients’ demographic and insurance details may be gathered when they make an appointment. Here is where the revenue cycle begins, providing an opportunity to acquire the data required for the cycle’s subsequent steps.
Prior Authorization as well as Eligibility Verification
Before services are provided, eligibility should be verified, and prior approval should be obtained to make sure the right amount is charged to the right payer. Also disclosed are the patient’s out-of-pocket expenses. In order to make sure that all crucial data is gathered and taken into account, a verification checklist can be a very useful tool.
Visits to Patients and Provision of Care
The revenue management cycle depends on both high-quality patient outcomes and top-notch customer service. By focusing on these two factors, patients are guaranteed to be happy with the care and services they receive. The patient base of the practice grows as a result of these satisfied clients returning the following time they require medical attention.
Clinical Reporting
Clinical records of the patient visit and the services provided must be timely, accurate, full, and in accordance with legal requirements. By capturing the clinical information that payers may need, EMR templates assist doctors in achieving these objectives and streamlining the revenue cycle process.
Charge Entry as well as Charge Capture
Effective charge capture and charge entry, whether performed manually or with the aid of software, guarantee that the documented services are converted into chargeable amounts.
Coding
Accuracy is guaranteed and reimbursement is increased with proper diagnosis and procedure coding. This procedure is optimized by skilled and educated coders.
Submitting a Claim
Accurate and prompt claim submission maximizes the money taken in and avoids delays. The capacity of the practices to collect the full payment amount is improved by medical billing solutions that take the entire revenue cycle into account and start with claim submissions.
Posting and Reconciliation of Payments
Depending on the patient’s insurance and any active contracts with payers, the revenue cycle ends when payment is made. The patient’s payments for services that insurance payers did not cover are also included.
Denial Control
Denied claims pose a serious threat to a practice’s revenue stream. An efficient denial management procedure may deal with denials effectively and recoup lost money.
What External and Internal Factors Influence the Revenue Cycle?
The revenue of a practice is influenced by numerous factors. Some of these are internal and are under the practice’s control. Some, meanwhile, are external and beyond the practice’s power to influence.
Internal Drivers
The practice’s fees for particular services, procedures, and treatments are one of its internal revenue generators. They also contain the characteristics of the patient base that the practice serves, such as the number of patients, their health state or conditions, how frequently they seek medical attention, and the doctors’ availability to see patients and provide the required care. Revenue is influenced to some extent by front and back office operations as well as worker expertise.
External Drivers
These factors, which include payments from insurance payers and patients, pose a far bigger problem. Healthcare laws and reimbursement programmes are more examples of external influences.
Challenges in Revenue Cycle Management
It seems like a straightforward and logical method of conducting business to have a procedure in place for collecting money for services that have already been rendered. Practices can’t, however, always entirely or partially manage this process. Effective revenue cycle management faces significant obstacles, some of which are specific to the American healthcare sector.
1. Healthcare laws and payment schemes
The complex reimbursement models adopted every few years and the constantly evolving healthcare rules present one of the major hurdles in revenue cycle management healthcare. Practices need to be aware of these adjustments and make sure that their staff is aware of them and follows the rules when doing their duties. Achieving expertise in every facet of the transformation might be challenging, especially for smaller firms.
2. Collecting payment from patients
Patients are now accountable for a greater portion of their healthcare expenses due to new legislation and the development of consumerism. Practices must learn how to strike the right balance between collecting patient payments and avoiding using “high-pressure sales tactics” that can irritate patients and make them look for other care. This problem can be prevented by consistently teaching employees and patients about payment routines and expectations and by developing alternate payment alternatives, such as payment plans and online payment.
3. Monitoring a claim’s development over time
Lack of a mechanism for monitoring claims may make it difficult to spot mistakes or delays and address them, costing money.
4. Denial management
The bottom line of a practice is affected when claims are refused, which is frustrating. Each denial raises the likelihood that a practice won’t be compensated for services previously provided. Practices are leaving a sizable amount of money on the table due to the high number of denials (14%), as well as the 50% of claims that are never refiled. Insurance follow-up services and AR (accounts receivable) management are two components of a successful rejection management strategy that increase the likelihood of receiving payment.
5. Staff training
Each employee who works on the revenue management cycle needs to receive the necessary training in the workflow, policies, and procedures. Although time-consuming and expensive, adequate, effective staff training pays off when skilled employees are aware of their tasks and responsibilities and carry them out correctly and effectively.
How Can the Revenue Cycle in Healthcare Be Improved?
These crucial components help an organization’s revenue cycle succeed in light of the aforementioned difficulties:
Patient
High-quality patient outcomes, which are brought about by excellent care delivery and patient involvement, aid in growing the patient base and reducing expenses, which in turn boosts income.
People
A successful practice is built on a staff that has undergone proper training. Clinicians, qualified medical coders, front and back office staff, and others make up the team. The staff members must be proficient in their particular roles as well as understand how they fit into the revenue cycle process and how they may enhance and improve it.
Processes
Practices can get the money they need and deserve by using an effective method that pushes the claim through its life cycle without any mistakes or delays.
Tech-related goods
By automating and streamlining laborious or repetitive operations, technology solutions improve patient care, increase accuracy, and boost staff efficiency.
Here are some ways that technology supports and facilitates an efficient revenue cycle process.
1. Front desk
- A patient portal can be used for patient registration, scheduling, and reminders.
- Verifying insurance eligibility can be done automatically.
- For co-pays, co-insurance, and deductibles, practices can take and process credit cards, HSAs, and FSAs.
2. Patient encounter
- The EHR/EMR records clinical care delivery, charge capture, and charge input.
3. Reception area
- Technology enables medical transcribing, medical coding, and claim submission.
- Reports and analytics shed light on a practice’s success in relation to key performance indicators.
- A payment gateway can be used to pay patients electronically.
- Payment posting may be automated.
Best Practices in Revenue Cycle Management
Medical practices now have an increased obligation to optimize payment collections and all other facets of healthcare RCM due to the constantly evolving healthcare rules and reimbursement models. Even though there are very important obstacles to overcome, using best practices increases collections. Additionally, it lowers expenses throughout the revenue cycle and helps small practices in better comprehending, measuring, and managing its financial components.
1. Enhance front desk operations and collections
When making appointments, teach your front desk personnel to ask patients for all the relevant demographic and insurance information. Use “communication scripts” to assist staff in educating patients on the various payment options or plans accessible to them as well as co-pay collection. Patient happiness and revenue optimization are both influenced by a front desk staff that is properly trained.
Automate the process of determining insurance eligibility
Verifying insurance eligibility automatically benefits patients as well as the practice. It has the twin benefit of preventing claim errors and informing patients as soon as possible about any payment obligations. Patients can better prepare for out-of-pocket expenses thanks to the enhanced transparency, and they also react more quickly when front-office staff asks for these payments.
3. Individualized EMR Templates
Utilize and modify EMR templates to effectively record clinical documentation and bill information. Set up a review mechanism to aid in identifying areas for improvement and remind clinicians to document precisely, totally, and clearly.
4. EHR and practice management software that is integrated
Use a practice management system-integrated EMR or EHR whenever it is practical to do so. Data can be automatically and smoothly transmitted further downstream, minimizing errors and delays.
5. Best Practices for Back Office
- Automate important parts of your claim submission process with technology. To hasten the processing of payments, use e-remittance.
- Offer a patient-friendly online payment interface so they can simply make any payments that weren’t taken during an in-person appointment.
- Manage your insurance follow-up and claim denial procedures well to increase cash flow.
- Monitoring revenue targets and identifying opportunities for improvement can be done via reports and data analytics.
- Analyze and put into practice software solutions for different parts of revenue cycle management that are appropriate for the practice. Physicians may concentrate on patient care rather than financial concerns when the appropriate software solution is used for the proper process.
Conclusion
The pace of change in healthcare legislation, reimbursement schemes, and technology has been accelerating. For healthcare organizations to preserve their financial viability, these pose tremendous hurdles. Revenue cycle management strategies that are well-thought-out and effective can make the difference between practices that are fighting to survive and those that are successful and prosper.
Automation and streamlining practices have an edge over those that are bogged down in time-consuming, tiresome tasks that do not lead to the desired result—the highest payment for supplied services at the earliest opportunity.