A business succeeds only when it earns revenue and is able to manage itself with the available revenue. Revenue cycle management (RCM) is a method that businesses use to keep track of their upcoming payments, pending payments, revenue, profit, etc. Healthcare industry is one such industry which uses revenue cycle management to manage its financial operations.
Healthcare revenue cycle management is the complete life of a patients’ account from the time it is created to the time it is paid in full. It helps the organization to manage its funds as well as collects the payments from patients for the treatment they have recieved. RCM is vital as it simplifies the administration for medical institutions, especially for big hospitals. A particular process is followed by the organizations to generate revenue under RCM. The revenue cycle can be envisioned in the following steps:
The first step of the Healthcare RCM is gathering information regarding the patient. Details like patient’s medical history, insurance details, allergies, etc. need to be collected. It helps reduce the time consumed before any clinical service takes place. This step is a key component as the treatment process of the patient can start early. This pre-registration process also enables the clinic or hospital to give better treatment. They get enough time to communicate with the appropriate doctors, nurses, and administrative staff throughout the care facility of the patient.
Before any medical facility is given to the diseased, the hospitals have certain forms and consents that need to be filled and signed by the patient or their guardians. For the medical record, any outstanding patient information is also collected. Here, the patient is further educated regarding the process of care they will be receiving, any financial obligations that they need to keep in mind, any specific steps of care that they need to take up, etc.
This is the process that physicians follow to record the information of the services they provide to the patient. This information is further used to put into a medical claim for billing. Accurate documentation is vital to receive the revenue, because if the charges are incorrect then the revenue can be lost. A charge capture system is set by every hospital and it interfaces with the electronic medical record (EMR). The interface optimizes the identification and captures the charges for complete billing.
An analysis of the clinical treatment is done to evaluate whether it is medically necessary, to find means of reducing costs, what will be the health outcome of the patient, etc. This review is done by patient advocates along with case managers. They determine the appropriate and required level of service for the diseased. The utilization review is also helpful for the providers as they can understand where they need to improve or modify their services.
Third Party Follow-Up
Third party payers need to be identified and pursued to collect payments on behalf of the patients. Third party follow up is important as in most cases people pay out of their insurances. These payments should be kept track of to receive the payments in full as well as at the right time.
A proper claim of the work done by the hospital needs to be submitted to the payer to receive the payment. Practice Management or PM software is the best option to submit claims automatically. Some of the PM software also has the option to detect errors, that can be missed by the human eye. Once the error is detected, it can be fixed and immediately resubmitted.
At times, only a portion of the amount is paid by the third party and the remainder is paid by the patient. Here, the hospital plays a significant role in working with the patients and collecting the payment. Normally, the patients get confused about the calculations of the amount they need to pay. They need to understand why and for what they are paying the money. This enables them to set up their payment plans accordingly.
The review of payments associated with the bill should be done. This lets the hospital determine whether to accept or deny the payments. A hospitals’ accounts receivable system verify the insurance, process the claims electronically, submit clean claims, and appeal in a timely manner. This allows the collection of maximum payments. Experts help identify potential payment assistance and navigate the complex billing process.
– Shreevarshita Gupta