The Benefits & Drawbacks of Using a Medical RCM Company
When you run a healthcare practice, you have a lot on your plate, more than any one person can handle. An enormous amount of work goes into ensuring that everything is running smoothly and patients are satisfied with their care. But it’s not only efficiency you’re concerned with, you also need to keep the lights on, payments moving, and providers credentialed. Sure, these aren’t the most fun or necessarily interesting areas to focus on, but they’re essential to a financially healthy practice. So, let’s dive in and take a look at your revenue cycle and discuss some of the advantages and disadvantages that come with outsourcing these tedious processes.
What is Revenue Cycle Management?
Revenue cycle management (RCM) is essentially a form of data collection and reporting. 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 Management Process
So what’s involved in the revenue cycle? Here’s a concise list of the main steps!
- Coding: Coding is a highly tedious process: locating the correct code and modified for each patient need. As time consuming as this process is, 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.
- Utilization: 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 are followed up with promptly.
- Third-Party Follow-Up: the collection of payments from third-party insurers
- Remittance Processing: the application or rejection of payments
How Does Revenue Cycle Management & Billing Work?
In order to achieve growth, there are multiple activities and processes that all need to come together and work seamlessly to both ensure that your patients have a positive experience and that all necessary payments are billed and collected. But how do you ensure that all of these stages actually pull together?
Most modern healthcare providers are choosing to outsource their RCM processes. This allows them the freedom to treat their patients while still gathering the necessary data to tie the clinical side of your practice with the business side of your practice. Revenue Cycle Administrator pairs up administrative data (patient names, insurance providers, and other necessary information) with their healthcare data, including diagnoses and subsequent chargeable treatments.
Advantages of Revenue Cycle Management Services
Lower Overhead Cost
Most healthcare CFOs will advise that practices outsource their RCM. 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 your in-house RCM team with space to work, salaries, benefits, and other expenses related to staffing. Outsourcing to an RCM company means an expert, third-party team takes care of all of these processes on behalf of your practice so you can put that potential overhead back into your practice and scale up.
Reduced Conflict of Interest
Taking away the direct financial transaction between the company giving treatment 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.
When you have an in-house team, you rely on them to always be present. If they quit, take another job, or don’t show up for work, you will have the added expense of training a new employee to replace them. When you outsource , there is always an account manager ready to assist you with any need that may arise.
Disadvantages of Revenue Cycle Management Services
You get to be more hands off in this process which can be a bit of a shock to some practice owners. If you’re used to constantly stressing over financials and patient counts, and claim rejections this may take a bit of getting used to the new normal.
You Don’t Have the Workers Sole Attention
Outsourcing your RCM typically means you will not be the only company that an RCM vendor works with. We work to alleviate this struggle by assigning each of our accounts its own dedicated account manager so you will always have access to your expert billing team.
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. If you’re interested in learning more about outsourcing your RCM services, talk to one of our RCM experts today!
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