Is Medical Billing Revenue Cycle Management (RCM) a Myth or a Fact?

The method used by healthcare organizations to manage the financial facets of their operations is called revenue cycle management (RCM). Whether the term “RCM in medical billing” is accurate or a misnomer will be covered in this tutorial.

To increase the productivity and efficiency of your practice, we will also outline some of the key tactics that you may incorporate into your RCM process.

Next, we’ll talk about the key performance indicators (KPIs) that can be used by practitioners to gauge how their RCM process affects their facilities’ financial health.

What’re you waiting for, then? Let’s begin!

What Is RCM in Medical Billing?

Are you curious about how RCM in medical billing might improve the financial stability of your practice? We’re going to bust your mental bubble right here. Because we must dispel this fallacy before we can talk about anything specific.

Medical billing is not a component of revenue cycle management. Actually, each of them serves two unique purposes. Healthcare practices can grow and turn a profit if both thrive.

However, it wouldn’t be incorrect to argue that RCM is a more intricate and linked process that also includes medical billing. To keep things consistent, we might state that “medical billing in RCM” would have been a more appropriate title for this guide.

Submitting and monitoring claims is the focus of medical billing. In contrast to medical billing, RCM involves a greater number of procedures and data.

We’ll go over each of the main elements of the revenue cycle management process to help you grasp it better.

Essential Elements of Revenue Cycle Administration

• Verification of Service Delivery: Make sure all patient interaction info is accurate and follows regulations. Check location, type, timing, and duration of services.
• Prior Authorization: Confirm the patient is covered by Medicaid or another insurance plan before submitting a claim.
• Coding: Assign the correct diagnosis or service code following HCPCS rules.
• Claim Creation: Generate accurate, properly formatted claims for the services provided.
• Reporting: Share daily, weekly, or monthly updates on claim status and key metrics like accounts receivable to manage the revenue cycle efficiently.
• Rejection Management: Review denied claims, figure out why, and take steps to speed up payment and reduce future denials.
• Submission of Claims: Send claims securely to the right insurance payer.
• Remittance Process: Review and post the payments received.

Knowing the distinction between RCM and medical billing is sufficient to understand that you must concentrate on the full RCM for a more robust revenue cycle.

As a result, the remainder of this book will only discuss the best practices for ensuring efficient revenue cycle management. We will then go over the KPIs you should keep an eye on to evaluate RCM’s performance.

Best Practices for Revenue Cycle Management

You may greatly improve the accuracy, productivity, and efficiency of your revenue cycle management process by incorporating important tactics.

Here are a few of the most popular but successful RCM best practices to get you started:

1. Take a Patient-Centric Perspective

The secret to your RCM success is a better patient-provider relationship. You will have patient loyalty if the employees at your healthcare institution take proactive steps to maintain patient satisfaction and engagement.

As a result, teach your employees to explain to patients their financial responsibilities, their options, and what to anticipate from the moment they arrive at the facility until payment is collected.

2. Automate Eligibility and Prior Authorization

Verifying insurance coverage at patient registration should be the first step in any effective RCM process. Insurance firms are gradually tightening their prior authorization and benefit verification procedures. Denials and delays in payments follow from this.

In order to streamline your clinical procedures, quicken the revenue cycle, and reduce the amount of time your front desk employees spend on this work, we advise you to automate this phase.

3. Make Use of the Most Recent Technology

Are you working alone on sales cycle management? To handle patient data, timely claim filing, claim denials, and automate prior authorization, it’s essential to invest in an RCM system.

Your administrative team may become overwhelmed by the complex standards and coding. Your employees may concentrate on other essential duties, like interacting with patients, maintaining their satisfaction, and delivering high-quality treatment, by using an efficient RCM system.

4. Enhance Coding and Charge Capture

Processes for effectively collecting payments for care services must be developed and put into place by healthcare facilities. Because they frequently lack the necessary paperwork, outpatient nursing treatments like IV therapy and injections are common areas where income leakage occurs. Additionally, mistakes in reporting units or missing charges may result in a loss of pharmacy income.

As a result, you need to teach your teams to submit full nursing documentation, check claims and charts for any missed costs, and routinely check pharmacy charges for inconsistencies. 

5. Preventive Denial Handling

Regretfully, not all of the claims you have filed will be paid. Some claims will also be rejected by the insurance carrier for a variety of reasons, such as late submission, coding errors, incomplete or inaccurate patient information, eligibility problems, etc.

To overcome this obstacle, you should monitor claim denials, evaluate them to determine the underlying reason, and put preventative measures in place. 

Which KPIs Are Suitable for Tracking RCM Performance?

You can’t get very far with RCM best practices if you don’t routinely evaluate their effectiveness. The performance of your RCM can be evaluated using a variety of key performance indicators (KPIs). Below is a discussion of a few of them:

Days in Accounts Receivable (A/R): This figure shows how long it typically takes for a claim to be paid after it is submitted. An A/R day count that is lower indicates efficiency. But if the days reach fifty or more, it means that there are issues with your RCM procedure.

Collection Rate: This is the proportion of successfully collected account bills. Financial performance and effective revenue capture are indicated by a high percentage of this statistic.

Rate of First-pass Claims: This measures the percentage of claims paid by insurance the first time they’re submitted, without needing revisions or extra info. A high rate, 90 percent or more, shows claims are submitted correctly and coding is accurate.

Rejection Rate: Denials occur when the insurance company denies your claim or asks for more info. Watching this number helps you spot trends, improve coding accuracy, and prevent lost revenue.

A/R Aging: You can detect and resolve past-due accounts by keeping an eye on this indicator. Based on the length of the outstanding balance, it allows practices to monitor the outstanding A/Rs.

Conclusion

This is a brief RECAP! First, this tutorial, “RCM in medical billing,” dispelled the myth and explained that medical billing is just one facet of revenue cycle management, which is a multifaceted process.

Moving forward, we discussed some RCM recommended practices to assist you in maintaining a stronger revenue cycle in your practice. Lastly, we talked about the important measures that all healthcare facilities should employ to assess the effectiveness of their revenue cycle management.