According to Greenway research, only 32% of patients who owe money receive a collection letter, only 62% of practices review delinquent claims, and only 59% of secondary claims are filed. Each step in the collection process is addressed by an efficient revenue cycle management strategy, ensuring profitability for your practice and, ultimately, increased ability to concentrate on patient care.
Healthcare Admin: Revenue Cycle Management – The Revenue Cycle Process
11 steps of revenue cycle management
Although different systems may be used by healthcare providers to manage their revenue cycle, they typically share the same fundamental steps or components:
1. Scheduling appointments
When patients make an appointment to access their healthcare options, the revenue cycle begins. When a patient calls to make an appointment for a checkup, treatment, or consultation, the provider enters that information into an RCM system. The initial appointment fee is the first sign that a provider will be compensated for their time and services. Effective scheduling is necessary to minimize no-shows or cancellations by ensuring that each reserved time slot corresponds to payment from a patient or insurer.
Patients go through the pre-registration and registration phases of RCM after scheduling. This entails gathering all pertinent data regarding the patient, such as their demographics, medical history, and insurance information.
When a patient registers in advance of visiting a doctor’s office, pre-registration takes place. Additional information is gathered during registration to create a patient account and link patient data to a record number for timely processing.
Once a patient has registered, providers can determine whether they qualify for insurance, fee waivers, community programs, and other forms of financial aid. Since incomplete or inaccurate information could result in a first eligibility confirmation being revoked, accuracy is especially crucial.
4. Utilization review
Utilization review is the process of choosing essential health care services, which is frequently done in conjunction with the eligibility phase. Utilization reviews are conducted by insurance companies and medical personnel to determine whether a patient is not only entitled to insurance coverage but also actually needs the procedure or treatment they are requesting. Utilization reviews determine the type of care required, typically prior to the appointment, using data-backed clinical guidelines.
5. Initial payment
Sometimes, patients pay their copay at the beginning of their appointment or pay upfront for their medical expenses in order to later be reimbursed. To reduce the possibility of missed payments or account delinquency as well as track contributions to prevent overcharging, the initial payments step entails gathering financial information and processing transactions.
6. Describing charges
This stage, also known as charge capture, is crucial for the patient and the healthcare provider to have precise, open records about why a visit costs a certain amount. Health care professionals use a patient’s chart notes to itemize the visit’s entirety, including details on the visit’s duration, type, and any procedures or medications prescribed.
7. Medical coding
Health care providers use medical coding to transform a visit summary into an insurance and billing document in order to process an insurance claim after recording charges on a patient’s account. Assigning codes to each type of procedure helps medical coders interpret a patient’s file. These codes are available to help insurers process various types of medical care in their databases. Medical coding helps insurers review claims more quickly, reverify patient eligibility, avoid denials, and generally expedite the process.
8. Submitting claims
The next step is for the patient or healthcare provider to send their coded information to an insurer, opening a new case file. This administrative procedure links a patient’s records from a healthcare provider to data from an insurer. Even if eligibility was previously confirmed, insurance claims must be formatted correctly and meet insurer requirements in order to be approved, so accuracy and organization are crucial. Revenue cycle management systems are used by both providers and patients to inform them of the status of their claims and when they can expect approval or payment.
9. Remittance processing
When an insurer approves a claim, remittance refers to the actual funds sent to the healthcare provider. A remittance statement detailing the amount and justification of a covered charge is sent by the insurer to the provider. To reconcile patient accounts and determine the remaining balance of their account before sending a final invoice, healthcare providers save remittance processing data in their systems.
10. Third-party follow-up
The healthcare provider must pursue payment from an insurer who fails to respond to a claim or delays payment. The provider must be able to determine the discrepancy when claims are approved but a third-party payer hasn’t sent payments and then enforce collections. If a patient was eligible for coverage, third-party follow-up may also entail challenging a claim denial and pursuing payment.
11. Patient collections
Last but not least, healthcare providers bill patient accounts and make an effort to collect payment through online payment portals, mail or phone transactions, or by eventually selling medical debt to a collections agency. Creating payment plans, looking for discounts to make payments more manageable, or charging credit to patients’ accounts while they are still receiving care are all examples of this step. Each healthcare provider has unique guidelines for obtaining payments from clients, removing charges from their accounts, and sending receipts for payments.
What is revenue cycle management?
The process of explaining how healthcare providers bill patients and receive payment for their services is called revenue cycle management (RCM). Making an appointment is the first step, and any unpaid balance is the final step. The administrative steps involved in the payment process and the recording of a patient’s experience as they move through the healthcare system make up the health care revenue cycle.
Revenue cycle management software is widely used in the healthcare industry as a centralized infrastructure for accessing patient data and letting patients interact with their accounts. RCM software usually has these functions:
Benefits of revenue cycle management
For health care providers to be financially stable and to reconcile patient accounts, revenue cycle management is crucial. Benefits include:
Numerous RCM tools automate administrative procedures and provide patient self-service options, reducing the time needed for administrative tasks. This includes timely insurance updates, automatic payment reminders, and appointment reminders to help cut down on wasted time for medical professionals. The standardized revenue cycle management processes give patients and healthcare providers a clear path for processing patient accounts, which boosts efficiency overall.
Revenue cycle management gathers a lot of information about initial charges, appointments, insurance claims, denials, payment rates, and more because it tracks the life cycle of a patient’s account as they receive and pay for services. When providers have access to revenue cycle data, they can identify trends and find ways to streamline their processes.
Healthcare providers can communicate with patients about their payment and claim status more easily thanks to revenue cycle management. Patients can better prepare for the financial aspects of a clinical visit or medical procedure when they are aware of their own position within the revenue cycle. Patients have access to their own data, and medical professionals can provide them with pertinent, open guidance on how to advance to the subsequent phase of the cycle.
Better reimbursement practices
Core components of the revenue cycle management process include determining a patient’s insurance coverage eligibility and processing reimbursements. Patient access to future healthcare and providers’ confidence in their financial stability are both improved by timely reimbursement of patients’ and insurers’ expenses by good revenue cycle management.
The RCM procedure offers numerous chances to fix typos and other errors in a patient’s records. The patient will be able to verify their information as they move from one stage of the revenue cycle to the next, notify the provider if anything is wrong, and avoid any potential delays in starting or continuing their treatment.
Lower delinquency rates
Patients are more likely to pay their outstanding balance on time when they have easy access to their health care accounts and can base their payments on accurately documented bills. Patients are closely involved in the billing process thanks to revenue cycle management, and they have several payment options.
Increased cash flow
Health care providers have a more dependable cash flow and can anticipate payments to better plan their financial commitments because revenue cycle management aids patients and insurers in paying their bills on time. By using RCM to manage debt, providers can more confidently place supply orders, make hiring decisions, and maintain their financial viability. They can also examine less profitable areas in an effort to generate additional revenue.
What are 4 steps in revenue cycle?
The financial procedure that healthcare facilities use to track patient care episodes from registration and appointment scheduling to the final payment of a balance is known as revenue cycle management (RCM).
What are the steps in revenue cycle management?
Revenue Cycle Management:
- Step 2: Services and Charge Capture. …
- Step 3: Claim Submission and Denial Management. …
- Step 4: Payment. …
- Step 5: Quality Reporting.