Revenue cycle management (RCM) typically refers to the entire medical billing process, from the beginning to the end. This term is often used in the health care sector, when performed by a third party medical billing company. RCM is a complete data capture and error mitigation philosophy influencing a health care provider’s business operations. RCM systems monitor administrative and clinical components that contribute to the collection and management of patient service data.
Revenue cycle plays an important role in maximizing insurance reimbursements by increasing the payments. It is vital for the financial stability of say, a hospital to have a process in place for each phase of the revenue cycle. The profitability of a health care unit entirely depends on its revenue cycle. A well-managed revenue cycle protects the returns and accelerates cash flow.
Managing a revenue cycle is not an easy task and requires constant attention. Each phase of the revenue cycle – right from the moment a patient is scheduled till the insurance reimbursement to the health care unit is being made is important, in maximizing insurance reimbursements. An effective RCM will reduce the burden on the billing staff, keep the administrative costs down and help in maintaining a good rapport with the patients. Some of the ways in which you can make RCM more effective are mentioned below:
Revenue cycle begins prior to patient’s arrival to the health care unit. Once an appointment is given to the patient, the patient’s insurance information is verified. As the information in insurances are mutable, it is important to verify the patient’s claim eligibility, every time the services are provided. The benefits of verifying the insurance details of the patients are:
Reduced claim denials due to invalid or incorrect information
Verify for medical services coverage.
Obtain information about the patient’s co-pay, co-insurance and deductible.
Notifying the patients prior to their arrival on what is their estimated responsibility, will make them aware that payment is required prior to availing the services.. Rather than waiting till the collection stage of the revenue cycle, health care units should discuss the financial issues and collect the payment immediately following an admission process Financial counseling will also help to determine a patient’s eligibility for public assistance or other payment plans, which will improve collection efforts and minimize billing workload.
Coding Clean Claims
Submitting an error free claim is the only way to guarantee correct payment at the first time. A ‘clean claim’ is one that is accurately completed, in accordance to the insurance companies and billing guidelines of the government. The patient information should be accurate to prevent any denials from the insurance companies.
Insurance companies are required to pay the claim or provide a denial within 30 days of receipt of a claim. Claims which are not processed within 30 days are subject to interest penalties. Taking a proactive approach in handling denials will improve accounts receivables substantially.
The final step in managing the revenue cycle is reviewing payments for its accuracy. Make sure you are receiving the full insurance payment as per the eligibility of the patients. On some occasions, you may receive lower reimbursements due to a coding mistake or accounting mistakes by the insurance companies. Inconsistencies, if any, should be addressed to the insurance companies immediately.
This article was written by Bobbie Betschart on behalf of Emerald Health, providing faster electronic claims and denial management processing. To understand the differences between electronic medical records software and electronic health records, visit healthit.gov