In the intricate interplay between healthcare services and financial complexity, revenue cycle management’s art and science form the basis of operational success. It involves navigating complicated patient care systems, billing, payment, and financial optimization. This article will help navigate the dynamic world of contemporary healthcare, where the need to deliver high-quality medical services intersects with the need to maneuver challenging financial procedures.
Here you will get the knowledge, tactics, and insights you need to master the complexities of revenue cycle management, whether you’re an experienced healthcare administrator, a developing professional, or simply an enthusiast trying to understand the complex mechanisms underlying financial health in medical settings.
What is Revenue Cycle Management?
Healthcare businesses track patient treatment episodes using medical billing software. Everything is entered in that software, from patient registration to appointment scheduling to final balance payment. RCM, or revenue cycle management, is the term used to describe this process. RCM integrates the commercial and clinical parts of healthcare by merging administrative data, like patients’ names, insurance providers, and other personal information, with the care they get and their healthcare data.
One of the critical components of healthcare revenue cycle management services is communicating efficiently with insurance companies. In a typical case, the hospital or healthcare center checks for the patient’s insurance coverage at the time of their appointment with the doctor.
Once the treatment is done, the healthcare system prepares the claim summary per the medical codes and forwards it to the insurance provider to check the amount that will be reimbursed and the amount the patient needs to clear.
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Different Steps in the Revenue Cycle
All the clinical functions and administrative tasks are a part of revenue cycle management. These steps are necessary to capture, manage, and collect the dues from the patients and insurance providers. Let’s look at the same below:
1. Patient’s Registration
It is the first step, where the healthcare center takes the necessary patient information and checks for their insurance eligibility.
2. Encounter
It is the time when the patient meets the doctor, and a medical transcriber documents their conversation. For this, healthcare providers often take the help of medical transcription services, who take notes such as the patient’s history, diagnosis codes, encounter notes, follow-up information, prescriptions, tests, assessments, and lab reports.
3. Capturing Charges
In this step, the medical charges for the treatment are captured and informed to the patient. It includes the charges of the doctor’s appointment, treatment, procedure, services, or any other equipment used to assist the patient.
4. Coding
The only way a claim will be approved or rejected will depend on how well the medical coders have converted the information according to the universal alphanumeric codes. Medical coding makes it easy for the payer to accurately understand patients and their history.
5. Claim Submission
After updating the information, the healthcare center submits the claim form to the insurance company for approval.
6. Claim Inquiry
Once the claim is submitted, the RCM team must follow up with the insurance provider to check its status. With regular follow-ups, the healthcare center can ensure they receive their timely reimbursement.
7. Remittance Advice
The insurance company or the payer validates the claim form and approves or rejects it based on the available information. It also shares the amount reimbursed, rejected, deductibles, and copayments in this remittance.
8. Appeals and Denials
If the claim is rejected, the billing team’s responsibility is to find the root cause, fix it, and re-submit the claim form. The billing team will also ensure to keep a check on the status for approval or rejection. In case it gets rejected again, the appeal process begins. If, even after the appeal process, the insurance company doesn’t agree to clear the bill, it is often written as a bad debt.
9. Posting Payments
All the reimbursement amounts or payments are posted in the medical billing software. It is done to track the financial health of the healthcare center.
10. Patient’s Statement
In case of the amount to be collected from the patient, the healthcare center prepares the medical bills and shares them with the patient for clearance.
11. Follow-up with Patient
After sharing the statement, the team follows up with the patient to receive the payment.
Bottom Line
Revenue cycle management is the utmost important step in the operational excellence of any healthcare system. It is how day-to-day expenses and other financial matters are conducted smoothly. Therefore, a healthcare system should ensure its RCM is on track.
