When you run a healthcare practice, you are going to have a lot on your plate. A whole lot of work goes into ensuring that everything ticks over as it should. At some point or anothert, you are going to deal with your practice’s revenue cycle management. Sure, this isn’t the most fun or necessarily interesting area to focus on. But it’s an essential. So, let’s take a moment to look at revenue cycle managemenet and the advantages and disadvantages that come hand in hand with revenue cycle management services!
What is Revenue Cycle Management?
Revenue cycle management (otherwise known or referred to as “RCM”) is essentially a form of data collection. The type of data that revenue cycle management focuses on collecting tends to be associated with patient service revenue in particular. The process of RCM entails all of the administrative and clinical functions that help to capture, collect, and manage this data.
The Revenue Cycle
So what’s involved in the revenue cycle? Here’s a concise list of the main steps!
- Coding – coding is a pretty complex process, but all diagnoses and procedures have to be coded in order to ensure that every patient has a clear medical history that can be referred back to.
- Utilisation – an examination of the necessity of certain medical services.
- Pre Registration – all patients need to provide pre registration details before arriving to undergo inpatient or outpatient procedures. This generally includes details regarding insurance coverage, which needs to be logged and stored.
- Registration – Once pre registration is complete, patients will then have to register. This stage entails all subsequent patient information. It also helps to establish a patient medical record number and ticks multiple clinical, regulatory, and financial boxes.
- Charge Capture – charge capture helps to render medical services into billable charges. If someone has received particular treatment, charge capture will help to determine what they will have to pay for this service.
- Claim Submission – this step involves sending claims of billable fees to patients’ insurance companies. This helps to ensure their treatment that they have been billed is paid for.
- Patient Collections – many patients will have outstanding balances and owe payments. This stage of the revenue cycle ensures that patients who need to pay for services, treatments or medication they’ve received can be chased up.
- Third-Party Follow-Up – this involves the collection of payments from third-party insurers.
- Remittance Processing – this is the application or rejection of payments.
How Does Revenue Cycle Management Work?
As you can see, the revenue cycle is extremely important and there are multiple steps that all need to work together to ensure that the patient has a smooth journey and all necessary payments are billed and collected. But how does RCM ensure that all of these stages actually pull together? Well, the process helps to tie together the clinical side of healthcare with the business side of healthcare. It pairs up administrative data (like patients’ names, insurance providers and other personal information with their healthcare data, including diagnoses and subsequent chargeable treatments). The various steps that are entailed in revenue cycle management meant that the majority of healthcare providers will dedicate a specialist team to take care of this process. Now, there are various options that a healthcare provider can take when it comes to assigning this team. The majority will either choose to outsource their RCM to specialist revenue cycle management services.
Advantages of Revenue Cycle Management Services
Let’s start by taking a look at the advantages of revenue cycle management services.
- Lower Cost – many accountants will advise that healthcare practices outsource their RCM. This is because, in most cases, outsourcing is simply more cost-effective. Hiring an in-house RCM team means taking on all of the responsibilities of an employer. You will have to provide the extra workers with a place of work, employee benefits and other expenses. Outsourcing to RCM services means someone else takes care of all of this on your behalf.
- Reduced Conflict of Interest – taking away the direct financial transaction between the company giving treatment and care and the patient reduces conflict of interest. By outsourcing revenue cycle management services, you put a middle person between who will stand a more neutral ground.
- Not Relying on One Person In-House – when you have an in-house team, you rely on them to always be present. If they quit, or don’t turn up to work, you will have the expense of training up a new employee to replace them. When you outsource to revenue cycle management services, there will always be someone ready to do the work on your behalf.
Disadvantages of Revenue Cycle Management Services
- Reduced Ownership – you won’t have trained the individuals taking care of RCM in-house, so they won’t have the branded presence of someone who has been trained up by you directly. They may deal with things in a different way to how you would like them to.
- You Don’t Have the Workers Sole Attention – outsourced RCM workers may be working for other healthcare facilities at the same time as dealing with your RCM. When you have an in-house team, they will only be focusing on issues to do with your company and its process.
As you can see, there are both advantages and disadvantages associated with revenue cycle management services. Only you can determine whether they will suit your practice’s unique needs or not. Hopefully, the above information will help you to come to a better informed ultimate decision.