The healthcare revenue cycle is the entire administrative process that starts with patients making their appointment and ends well after they leave your healthcare facility (when the claims are submitted and the patients are finally billed).
It may sound simple, but the process involves a lot of work done by different people, a lot of time, and also a lot of bureaucracy. So your revenue cycle management can be really challenging, regardless of the size of the hospital, clinic, or private practice.
For RCM to be properly implemented, both large and small healthcare facilities should have concrete goals. If you still feel a little lost on the subject, read on and learn about the most basic but essential goals for any RCM efforts.
No matter how much a doctor writes in a patient’s record, all prescribed diagnoses and treatments must be later turned in letters and numbers to create insurance claims and bills.
For example, the industry uses the ICD-10 standard for billing purposes: type 1 diabetes becomes “E10.9,” gastroesophageal reflux disease becomes “K21.9,” and so on. And yes, we are talking about an absurd amount of codes. The updated ICD-19 coding system alone has more than fourteen thousand!
That’s why this is one of the biggest challenges of an efficient revenue cycle: coding mistakes made by your team can lead to claims refund issues. You need to invest in frequent programs to educate and update your employees in coding techniques. This helps to organize processes, avoid errors and streamline your revenue cycle. After all, without the proper codes, there are no payments.
Another important goal of revenue cycle management is collecting information for insurance claims. This starts when the patient leaves the doctor’s office, and the medical record is converted into billing codes, as we saw in the previous item.
Each clinical code is linked to a price, so inadequate documentation can generate erroneous claims that will be rejected. There are cases where the same claim goes back and forth several times until it’s corrected, accepted, and the healthcare provider finally recovers the reimbursement.
Between 2016 and 2020, according to a recent study, hospital claims denials increased by 23 percent. Ironically, experts pointed out that 90% of these denials were avoidable if they had been corrected or filled out carefully before sending.
You may be wondering what is revenue cycle management in medical billing. The fact is that RCM enables healthcare organizations to bill for patient services, including billing insurance companies properly.
Another seemingly simple step in the process that can cause a lot of problems is patient records. Creating and managing them is an essential goal of RCM and starts from the moment the patient makes an appointment at your hospital or clinic.
You need to ensure that your staff collects accurate information even before the patient leaves the waiting room, as this data will be critical to submitting claims and receiving payments.
But not only that: wrong or confusing information can lead to misdiagnosis, with disastrous results, including medical errors that cost billions of dollars and could destroy your healthcare facility’s reputation forever. Fortunately, technology has helped to manage this step of the process better.
Today, electronic health records (EHR) digital platforms help improve the process of collecting patient data and access to this information, reducing the occurrence of errors.
Whether past due or due at the time of service or otherwise, collecting payment is the essential goal of RCM for any healthcare facility, your billing team must be well trained not only to create and send bills to patients. They also need to deal with patients and their payment issues.
Collecting payment can be the most complicated step for healthcare providers. First, some debts drag on indefinitely and may never be paid. But even when you’re dealing with good payers, the process is often quite time-consuming.
A study published in 2020 showed that 78 percent of healthcare providers don’t get payment for bills over $1,000 in less than a month.
One of the ways to improve the collection process is to invest in alternative payment options. For example, you can offer electronic payment through a patient portal instead of mailing bills.
The Financial Health of Your Clinic
People think of hospitals and clinics as places meant to save lives, cure illnesses, and deal with emergencies. Very few remember that healthcare is also a business and has a complex administrative side, which involves several processes to keep finances out of the red – or, let’s say, healthy.
Healthcare professionals should always be aware of their healthcare revenue cycle. New billing and medical coding technologies, the adoption of EHRs, and tools such as electronic payment are emerging to improve the process from start to finish and ensure you receive adequate reimbursement for the services provided.