Guide on Healthcare Revenue Cycle Management- Medyra Tech

It takes a lot of work to run a medical practice; it’s not an easy feat. The most crucial of these for the financial stability of your practice is healthcare revenue cycle management (RCM).

As a result, every healthcare facility needs to comprehend it and figure out how to maximize it. We have written this thorough advice for you if you are a reputable healthcare practitioner who is having trouble managing your finances.

This blog covers the benefits, difficulties, and best practices for setting up a reliable revenue cycle management process.

So let’s get started right away!

Table of Contents

An Overview of Revenue Cycle Management in Healthcare

Monitoring and evaluating the money made by patients from the time they make their initial consultations until they pay their outstanding debts is the focus of healthcare revenue cycle management. In short, it encompasses the whole financial process of a patient’s treatment.

Healthcare revenue cycle management takes into account several elements, including the cost of patient care, much like how businesses approach accounting. These components enable healthcare facilities to identify the processes or methods that yield the highest profits throughout the cycle.

Hospital administrators and other decision-makers at a healthcare facility can use this information to decide how best to allocate funds and create plans to increase revenue after they have it. They will be able to provide a greater range of services as a result, meeting the various needs of their patients.

Essentials of Medical Administration

The healthcare industry is always seeing changes, so it’s important to stay updated on new developments and keep your data modern in every way. Healthcare administrators need a mix of skills to get better in this competitive environment: strategic planning, decision-making, problem-solving, communication, leadership, motivation, teamwork, and ethics.

The following is a list of some healthcare management fundamentals:

Planning, directing, and setting up non-clinical activities in the appropriate medical facility.
Management of the overall budget and finances of the healthcare organization.
Organizing hiring and creating work schedules for each employee.
Supervise several departments to ensure effectiveness and productivity.
Continuous quality control and risk assessment while maintaining patient satisfaction.

Important Steps in the Revenue Cycle Management of Healthcare

Front-end and back-end activities comprise the full healthcare revenue cycle management process. Every step taken before submitting a claim is included in the RCM front end. On the other hand, the RCM process’s backend comprises actions taken following the submission of the claim.

The following nine steps are part of the RCM process:

Step 1: Registering in advance

Although not all procedures adhere to this first step, it can be beneficial in the long term. When a patient makes their initial appointment, information about them is gathered.

It is simpler to teach patients about their financial responsibility when insurance information is gathered beforehand. Their knowledge of their deductible and co-pay has improved.

You can get the following information at this step:

Patient’s name
Billing details
Insurance details
Demographic information
Patient’s medical history and reason for visit

Additionally, it assists you in adhering to the “No Surprise Act,” which shields patients from unexpected medical expenditures. This act also highlights the need for providers to provide an honest estimate of costs for the care services that are booked in advance.

You can use the information gathered in this stage to inform patients under both individual and group health plans.

Step 2: Enrolment

This stage begins when the patient arrives for their appointment, or they may have already finished it online. In this phase, you might ask the patient to complete any required documents or confirm their date of birth, insurance coverage, medical history, and contact information.

Additionally, it will allow your employees to find and fix any mistakes that may have occurred throughout the pre-registration process.

Step 3: Charge Capture

Charges for expected treatments must be documented on a claim following each patient visit. After that, you forward this claim to the patient’s health plan or insurance company. It is a crucial step that confirms the procedure and the correctness of the charges by enabling your healthcare organization to get reimbursed.

Step 4: Review of Utilization

If necessary, the patient’s health plan or insurance company takes this action. They examine the medical need for a specific service. The insurance company will return the data to you after determining whether to cover these services for this patient.

Step 5: Writing code

Once the insurance company has confirmed its coverage and the procedure has taken place, the procedure or treatments need to be classified into billable charges.

The patient’s treatment records’ documented procedures are transformed into billable codes by certified coders. There is a billing code for every procedure. The codes are then used to generate the patient’s bills and payment claims.

Step 6: Submission of a Claim

Sending the prepared and classified claims to the payers is the next stage in the healthcare revenue cycle management process. The payer will analyze the claim and look for any contradictions or inconsistencies with the previously approved methods.

Step 7: Procedure for Remittance

Following the submission of your claim, the payer processes it and notifies you of the amount owed. If there are errors or inconsistencies, you will have to make the relevant corrections and submit the claim again.

The insurance company will postpone payment if you rework and resubmit. Sometimes the patient has to pay the remaining sum on account because not all of the money is repaid. Therefore, if the payer’s payment is delayed, you will not be able to charge the patient for any outstanding balance. As a result, you should frequently verify your remittances for mistakes.

Step 8: Coverage Follow-up

You should anticipate payment from the payer at this point in the healthcare revenue cycle management process. On the other hand, you can have issues with nonpayment, overpayment, underpayment, or denied claims.

To make sure you are fairly compensated for the services you have provided, insurance follow-up becomes essential.

Step 9: Gathering Patients

You must determine how much is left on the account and whether there are any unpaid patient obligations after the insurance carrier has cleared the payment.

For certain healthcare facilities, completing this responsibility is one of the most difficult. Send statements as soon as you can; you will be paid sooner if you send them earlier.

Monitoring outstanding accounts to collect payments from patients who still owe money is another component of this phase. As patient deductibles increase, this step becomes increasingly important.

Nowadays, a significant portion of the expenses related to the care services is borne by the patients. The patient is more likely to pay their bill in full if they are given adequate notice of when payments are due.

The Advantages of Revenue Cycle Management in the Medical Field

By properly completing the revenue cycle processes, providers should expect significant gains in their medical practices’ financial performance and service quality.

These are a few of healthcare revenue cycle management’s most important benefits.

Increased First-Pass Rate for Claims

Since it ensures that claims are paid on the first submission, accurately performing front-end tasks is essential to revenue cycle management performance. Correct coding, insurance verification, and patient data collection are some of these front-end duties.

Usually, 5–10% of claims are denied after they are originally filed. Most of these denials, meanwhile, are the consequence of human error and technical problems. These include missing or erroneous information, issues with insurance verification, and coding flaws.

Decreased Administrative Stress

Setting up or updating patient records, making appointments, and verifying insurance when a patient makes an appointment are all handled by administrative staff. A healthcare revenue cycle management system streamlines these front-end tasks, allowing administrative staff to work more productively.

Additionally, RCM makes sure that these administrative tasks are completed accurately to avoid claim denials in the future. Administrative staff save time and effort by revising claim rejections and denials when claims are accepted on the first attempt.

Increased Satisfaction of Patients

By giving patient outcomes more importance, efficient revenue cycle management enhances the overall patient experience. Patients can expect more comprehensive and targeted care to reduce their risk of readmission.

By simplifying processes like scheduling, filling out intake forms, and billing, RCM also improves the experiences of administrative staff and patients. Additionally, because thorough insurance verification up front is a key component of healthcare revenue cycle management, patients will have a clearer idea of their insurance eligibility right away. This way, they won’t be caught off guard by future out-of-pocket expenses.

Value-based Care Delivery Transition

By eliminating the need to pay for error repair and claim appeals, a practice that implements healthcare revenue cycle management saves time and money. Consequently, practitioners can devote more time and resources to offering top-notch care.

Revenue cycle management can even help providers make the transition from traditional fee-for-service to value-based reimbursement models.

The Centers for Medicare & Medicaid Services (CMS) created value-based reimbursement rules to prioritize service quality over quantity to enhance patient care. Based on the health results, it pays medical providers.

Higher Patient Reimbursements and Collections

Healthcare facilities have a lot of expenses to pay for. They must cover the expenses of the services they provide to patients as well as the salaries of their staff. When patients are unable to pay for treatments in advance or when their claims are denied, payments to the healthcare facility are withheld. This makes managing the practice’s expenses challenging.

You may guarantee prompt reimbursement and avoid future claim denials by using healthcare revenue cycle management techniques.

Healthcare Revenue Cycle Management Difficulties

The revenue cycle for healthcare is a dynamic process. As a result, revenue cycle management professionals in the healthcare industry may face several challenges, ranging from inaccurate billing to a lack of set protocols and norms.

Below is a discussion of the top five most common issues with healthcare revenue cycle management:

Errors in Billing and Collection

Ignorance of a billing process can terrify patients with unsustainable debt and cost hospitals tens of millions of dollars.

Because individuals pay a larger percentage of the cost of their care out of pocket, healthcare facilities need to make sure they aren’t losing money. Additionally, they need to ensure that they are not forcing patients to seek care elsewhere. Health IT Difficulties

According to a poll, 85% of organizations find it very difficult to collect payment from patients after they leave the hospital, even though not all providers are professionals at getting the most money possible at the moment of treatment.

Health IT Difficulties

Clinicians must use information technology to monitor claims at every stage of their life cycle to comply with revenue cycle management. It makes it possible for you to get paid and effectively manage unfulfilled claims.

Nevertheless, some healthcare facilities struggle to invest in cutting-edge technology to handle outpatient networks and claims, or to set up a strong IT infrastructure and billing department. In the modern hospital environment, effective health information technology is essential.

Most practices choose outsourcing as a solution to this problem, but some choose to permanently close their facilities.

Insufficient Staff Training

Inadequate training may cause healthcare staff members to collect patient data or bill incorrectly. Healthcare billing staff need to be skilled at both collecting patient demographic information up front and turning it into legitimate insurance claims later on.

Even though it can be costly and time-consuming, training can save a healthcare organization money. In terms of unnecessary costs, coding errors have the same repercussions as medical errors. For example, studies show that 23 hospitals in New Jersey were fined $500,000 for medical errors in 2015 alone.

Not Keeping an Eye on the Whole Claim Process

The claims procedure requires careful oversight at every turn. It is yet another crucial component of revenue cycle management protocols in any practice. If healthcare professionals don’t closely monitor claims, they won’t be able to spot mistakes. Revenue is lost as a result of this.

Methods to Enhance Revenue Cycle Management in Healthcare

Because healthcare regulations and reimbursement models are always changing, medical practices now have a larger responsibility to optimize payment collections and all other aspects of healthcare RCM. Despite the numerous significant challenges, collecting is maximized when optimum methods are followed. It also helps small practices better understand, measure, and manage their financial aspects and reduces expenses across the revenue cycle.

Automate Prior Authorization

Patients and the practice both instantly benefit from insurance eligibility verification. It allows clinics to notify patients of their financial responsibilities at an early stage and maintain the accuracy of claims.

When front desk staff members collect these payments, patients are better equipped to plan for out-of-pocket costs and react faster.

Educate Front Desk Employees

When scheduling an appointment, instruct your front desk staff to enquire about the patient’s insurance and demographics. To help staff members explain to patients the available payment alternatives or plans and the co-pay collection procedure, use “communication scripts.” A well-trained front desk staff improves patient satisfaction and maximizes revenue.

Make Use of Technology

Utilize technology to automate crucial processes in the filing of a claim. Use electronic remittance to speed up payment processing. Additionally, to make it easier for patients to pay, you should offer an online payment interface.

Actively Track Claims

Finding answers is important, but so is figuring out why claims are denied. Verifying insurance eligibility is the first step in making sure that invoices are accurate. It’s also essential to be able to track claims from submission to payment. Keep track of every payer denial and look for trends or common errors that you can correct to close the revenue loop.

Invest in Staff Training

Given how rapidly the healthcare business is evolving, healthcare facilities should develop and implement continuing education programs for staff members that address complete charting, accurate coding processes, and reminders of financial policies. Recall that training reduces employee turnover in addition to medical errors.

Why Does Healthcare Need Revenue Cycle Management?

A well-designed and implemented RCM system shortens the billing and collection cycles by accurately registering, assigning, scheduling, and processing payments.

It connects administrative data, such as a patient’s identity, insurance plan, and other pertinent patient characteristics, to the treatment they get.

It helps practitioners save time and money by lowering the number of denied claims and allowing online patient payments. Additionally, it creates a connection between the business and clinical aspects of healthcare.

RCM systems are used by healthcare organizations to store and manage patient billing data. Connecting electronic health records (EHR) and billing systems also reduces administrative expenses and speeds up the process of providing a service and getting reimbursed for it. Accounting and EHR systems can integrate and communicate more easily thanks to RCM.

Moreover, all administrative tasks fall under the purview of healthcare revenue cycle management. These consist of notifying patients of forthcoming appointments, reminding both patients and payers of outstanding balances, and contacting the insurance provider if a claim is denied.

Conclusion

Laws governing healthcare, reimbursement schemes, and technology have all been developing more quickly. Maintaining financial viability is a challenging task for healthcare organizations. A robust and well-thought-out healthcare revenue cycle management strategy helps distinguish successful practices from those that are having financial difficulties.

In this cutthroat healthcare environment, practices that automate when appropriate and streamline when necessary will prosper. They have an advantage over people who are mired in tedious, repeated tasks that don’t produce the intended outcome.

As a result, now more than ever, practices need to assess their need for robust and reliable revenue cycle management solutions.