The Basics: Understanding Revenue Cycle Management
Every successful healthcare provider knows they need to have an optimized revenue cycle management process to stay financially healthy. But what does this optimization entail? How can you reduce your accounts receivable days? How much does it cost? Let’s dive right in.
What is the Revenue Cycle Management Process?
Revenue cycle management is the process in which any practice or health care facility manages the functions associated with claims processing, payment, and revenue. It includes the identification, management, and collection of patient services. This process begins when an appointment is made by a person and ends when payment is collected.
The RCM Process
- Staff will set up the appointment and make sure they have verified the person’s insurance and have established a payment account. Pre-registration optimizes this revenue cycle management process and creates a patient account to detail medical history and insurance coverages.
- After the appointment is fulfilled and the patient walks out of your office, a practice creates a claim submission that identifies:
- The treatment received
- A code (known as an ICD-10 code) which shows how much the practice should be reimbursed for any specific treatments.
- Once the claim is created, it is sent by a practice to a private health insurer or government payer for reimbursement. While it sounds easy enough, there’s plenty of other tasks that must also must be handled such as:
- Payment Posting
- Statement Processing
- Claim Denial (should the need arise)
- After the claim is sent and evaluated, the practice is reimbursed for the services rendered. If there is a denial, it often is because the original claim was coded incorrectly, a chart has missing details, or the patient’s account information is not fully completed.
Why Managing Your Practice’s RCM Matters
RCM is a highly important process. Your practice literally cannot survive without it, but when mismanaged, payments can take months to be resolved with all the back and forth, red tape, and ever-changing regulations. That’s why you need an RCM partner that takes care of the paperwork and the hassle for you, so you can focus on patient care.
The Challenges of RCM
- Collecting Payments
Collecting payments before the patient leaves your office can save time and effort when dealing with collections but, it can be over-complicated and added stressor for your patients. Many patients cannot afford to pay bills upfront during an era of rising deductibles.
- Tracking Claims
Tracking a claim through its lifecycle is a challenge, and revenue can easily be lost if providers can’t identify where issues originated and resolve errors in a timely fashion.
- Training Expenses
Training your organizational staff is a significant time crunch and potential pain for practices. Human error is unavoidable but can significantly setback the schedule for reimbursement should issues like improper coding occur.
The Benefits of Outsourcing Your RCM
- Lowered Administrative Costs
Outsourced RCM reduces administrative costs by taking care of your billing needs from end to end and decreasing overhead. Expert RCM services can help to significantly reduce your A/R days and let you more accurately forecast your revenue and staff needs for your future growth.
- Improved Patient Satisfaction
Outsourcing your RCM raises patient satisfaction by making sure that they leave with a positive perception of your practice thanks to your excellent customer service, especially when it comes to billing and insurance resolutions.
- Lowered Readmission Rates
Embracing the technological advances of RCM, providers are able to use telehealth technology to deal with high readmission rates. As a result, costs associated with high readmissions rates are lowered. According to one report, a branch of the Veterans Health Administration saved more than $150,000 per year in the first two years after it implemented a laboratory expert system, which helps avoid making common mistakes that lead to high-cost, repetitive mistakes.
- Reduced In-House Labor Costs & Overhead
By working with us to reduce in-house labor costs and increase efficiency, we can help identify KPIs that determine an organization’s key source of revenue and make continual improvements in services rendered. Any healthcare practice would benefit from carefully examining their financial data to make informed decisions.
Thanks to cloud-based RCM and software, our team of billing specialists and managers can help you thanks to our nearly four decades of experience, resulting in a first-pass claims rate of 98% and an 88% close rate for EHR same-day encounters with nearly 30 million patient visits processed. Get in touch with us today and let’s work together so that you can focus on exceptional patient service without billing hassles.