Revenue cycle management in healthcare is a framework that oversees all the financial processes of healthcare organizations that manage their clinical and administrative operations. For this, you can monitor the collection and handling of your patient service revenue to assess the management of expenses and the inflow of profits.
Your revenue cycle management will be initiated when an appointment for your healthcare services is made. It ends with you finally collecting all due payments in agreement with the patient and their insurance provider.
Revenue cycle management in healthcare involves processes like demographic entry, medical coding, charge entry, payment posting, denial management, reporting and analytics, and accounts receivable management. We will be analyzing them in detail below so that you can assess their roles in optimizing your revenue cycle management.
1. Demographic Entry
Healthcare organizations require demographic entries of patients to start the procedure, which records their financial details. Patients provide information about their insurance providers and coverage so that you can timely and accurately oversee reimbursements and billing.
You can discuss the insurance company, primary placeholder, policy number, and group number, among other details, with your patients to verify their insurance benefits and coverage. You can verify the information provided by contacting the relevant insurance companies and validating your patients’ coverage type and deductible status.
You can also confirm their eligibility and the inclusion of any pre-authorization or co-payment requirements for specific medical services. In the case of physical insurance cards, they can be scanned or photographed for documentation so that they can be referenced in the future.
You can also convert your medical treatments and procedures into specific codes, which can be used to document accurate reimbursement and billing. This is a standardized healthcare revenue cycle management process to ensure that patients accurately pay only for the services they undergo.
It is used to generate accurate medical bills that are sent to the relevant insurance companies for reimbursement. You can use medical billing and revenue cycle management to file insurance claims for payment, streamline their processing, and prevent delays or claim denials.
In this way, your patients or their insurance companies can accurately reimburse you for your medical services. Your revenue can be heavily optimized with medical coding if you properly document and code your services.
You can also look into charge entry to manage your revenue cycle and record all the medical procedures and treatments provided to your patient. For this, you enter charges that also determine how insurance claims and medical bills are generated.
In addition, reimbursement rules and fee schedules are considered as different payers can have different guidelines, which must be considered. Charge entries also facilitate the management of accounts receivable, which also influences the revenue cycle of healthcare organizations.
Charge issues and discrepancies can lead to delayed payments or claim denials. Therefore, you have to make charge entries carefully so that any rectifications or follow-ups are minimized.
Payment posting is also important for you as it enables you to reconcile and record payments from patients or their insurance companies for your services. It also ensures a proper allocation and accurate accounting for the revenue generated.
There is a remittance advice involved as well, commonly known as an Explanation of Benefits statement. This statement contains information about medical services, payments, denials, adjustments, and other vital financial matters.
You can allocate specific payments to specific patient accounts by applying relevant charges based on the statement. In this way, you can ensure all your medical services and their payments are accounted for.
The process of denial management analyzes and resolves claim denials made by insurance companies whenever that payer either entirely or partially rejects your reimbursement claim. You can categorize denials on the basis of the reason for rejection, which mostly comprises eligibility issues, non-covered services, and unfulfilled authorization requirements.
This process also involves a corrective action that you can develop as a solution by appealing the denial, providing the missing information, and asking the payer for clarification. You can extrapolate your management by identifying patterns and trends in denials.
Your expenditure will have to be diversified for this, which will negatively impact your revenue cycle. However, it is an important step for healthcare organizations so that they can improve their operations and prevent further denials.
You may also have to invest in the collection and analysis of your financial data to interpret insights and ensure effective revenue cycle management. This enables you to derive implementations to improve that cycle and optimize your revenue stream.
By collecting data, you can include important financial factors in your analysis, like payment posting, claims submission, and accounts receivable. Certain key performance indicators, including net collection rate, denial rate, and average reimbursement time, may also have an impact on the performance of your revenue cycle.
You can use them to identify patterns and trends in your revenue performance and claim denial rates and make informed predictions about outsourcing revenue cycle management. By utilizing them, you can maximize your revenue by implementing certain performance-boosting measures, conducting audits, regulating guidelines, and stabilizing your financial position.
Managing your accounts receivable is another process with which you can effectively streamline your revenue cycle by monitoring the outstanding payments to you. You have to track the overdue payments of insurance companies for the medical services you provide to your patients.
The purpose is to ensure that you are appropriately and timely compensated for your services, and you can fulfill it by regularly following up with your patients. You can offer financial plans, send consistent reminders, and counsel your patients to derive the best way forward.
Moreover, you can also inquire insurance companies about any denied insurance claims or overdue payments. Financial assistance can also be on the table for patients who do not have any viable insurance so that they can timely pay off their dues.
You can minimize the administrative burden on yourself by implementing the processes above to prevent claim denials. Your staff can reduce their energy and time from appealing to those denials and utilize them effectively in patient care.
By completing the tasks of your revenue cycle management, you can streamline the communication between your patients and administrative employees.
In this way, you and your patients can work together to execute operations like scheduling appointments, submitting claims, and completing documentation to establish a satisfactory experience.
Effective management of the revenue cycle can also prevent any unintentional or intentional fraud occurring as a result of low-quality medical treatments, improperly conducted services or irrelevant treatments. Medical treatments and procedures can also be upcoded, which means that patients or their insurance providers are charged with irrelevantly higher reimbursement.
You can optimize your revenue cycle management to ensure the distribution of accurate information between all parties involved and up-to-date regulation of healthcare policies.
Your patients can also be dishonest with you, and a secure revenue cycle management can help you in detecting their fraud. They may provide inaccurate insurance information and persuade you for certain medical services that they are ineligible for. With a rigorous demographic entry process, you can accurately verify insurance information and instantly detect any inaccuracies in them.
Medical identity theft is another issue for healthcare organizations as patients often claim to be someone else in order to receive ineligible services. You can also address this issue by conducting a strict verification process for your patients. You can utilize your revenue cycle to detect potential fraud in the pre-authorization phase of an entire procedure.
By implementing these processes, you can streamline your revenue cycle management by maximizing profits and cutting down on expenditures. This highlights its importance for effectively running healthcare organizations and maintaining a healthy relationship with patients.
The certified revenue cycle professionals at Health Quest Billing can expertly address your queries about your revenue cycle management. Join us today and be a part of an amazing initiative where you can take your healthcare organization to the next level.
The steps in managing the revenue cycle comprise demographic entry, medical coding, charge entry, and payment posting. There are secondary steps as well that include denial management, reporting and analytics, and accounts receivable management.
Revenue cycle management is a process that involves the collection and management of revenue for a healthcare organization. It is done by implementing certain processes so that financial viability is maintained and top-quality patient care is provided.
The duties of a revenue cycle manager include the identification of issues in payment reimbursements and the efficient processing of appeals and denials. They must also be proficient in coding medical procedures and treatments.
The three main components of the revenue cycle are the front end, middle end, and back end. They are equally vital in deriving the financial situation of a healthcare organization.
The 5 step revenue management process has five stages to manage the revenue cycle of a healthcare organization. Those five stages involve segmentation, optimization, data collection, forecasting, and dynamic re-evaluation.