A healthcare revenue cycle is used by hospitals, clinics, and healthcare facilities to manage all of the daily clinical and administrative data that enters the facility. Although revenue cycle management isn’t very complicated, it is a laborious process that requires a great number of information moving through many different hospital departments. This is frequently the justification for why access to reliable data is essential to effective corporate management. The execution of all clinical and policy-making tasks, including the capturing, directing, and gathering of specific service information, is essential to the revenue cycle management process. Therefore, it includes everything from the registration of the patient through the collection of the invoice payment.
The healthcare revenue cycle includes a number of functions that can be used to gain understanding of how the system operates.
1. Scheduling
Scheduling is a crucial component of the revenue cycle that, when improved, would undoubtedly boost sales and enable healthcare providers to provide high-quality care. Prior authorization requirements, cumbersome procedures, and extended hold times have an adverse effect on patient satisfaction and have a big impact on doctor recommendations.
In order to reduce no-shows and maximize revenue, it is important to consider the convenience of the patients while arranging the patient appointment and to be flexible. The patient is engaged via online portals through streamlined scheduling and readily keeps the schedule in order to prevent lengthy wait times by employing automated reminders for emails and messages.
2. Pre-registration of patients
Because it begins even before a patient is enrolled in the system, the initial step is always important. Name, medical history, payer information, and payment method are among the patient’s data that are gathered. Prior to the patient’s first visit to the hospital, these data were gathered. The patient and the provider both benefit from pre-enrolment. It not only gives patients more time before consulting their doctors, but it also ensures that they are upfront about the charges from the beginning.
Hospitals can anticipate that their patients would pay their bills on time because the payment information has been shared with the patients, lowering the likelihood that the healthcare provider will incur bad debts. Pre-enrolment facilitates the process and improves the patient experience in general.
3. Registration of patients
All of the patient data obtained during the earlier pre-registration is supported during the registration procedure. A patient is informed of any errors found on a form they filled out so that they can be corrected before they become more serious problems. Errors on a patient form could result in protracted delays for hospitals attempting to get paid by payers.
4. Charge Initiation and Capture
In the charge entry stage of medical billing solutions, healthcare professionals enter the details of the numerous services they provided to patients before sending the costs to the insurance companies. This measure is crucial for managing the revenue cycle since it ensures that hospitals are paid in full by payers. We call this maintaining revenue integrity.
5. Utilization Control
Health insurance providers review the request for medical therapy at this stage. The utilization review’s goal is to determine whether the health care plan covers the necessary medical treatments. Additionally, it helps the hospital reduce costs and determine whether the recommended course of therapy is acceptable.
6. Medical Coding
Another phase is the practice of conveying diagnosis and procedures. Medical coding is used to convert written descriptions of services, processes, individual requirements, and goods into alphanumeric or numeric codes due to the vast array of drugs and healthcare services provided by hospitals. Although these codes might not apply to any particular person, they are utilized by hospitals to develop a process map. These codes are used by medical billers to create insurance bills and claims for patients and healthcare providers.
7. Verification of Eligibility and Benefits
Another crucial phase in revenue cycle management is benefits and eligibility verification, which, if carried out properly, would result in a higher clean claims rate. We can undoubtedly avoid delayed payments, invoicing problems, and non-payment by maintaining an easy and effective process of eligibility verifications. It is vital to conduct periodic inspections on the coverage and benefits offered under the insurance plan.
8. Claim Submission
One of the most important phases of medical billing is the submission of medical insurance claims. In order for the payment to be transferred in accordance with the terms of the contract, the hospital will submit the claims to the insurance companies during claim entry. There would be delays in the payment processing and a delay in the health care providers receiving the claim amount in the event of errors or other issues with the claim submission.
9. Denial Management
After claims have been received, payments are either accepted or rejected at this crucial step. The hospital’s accounts receivable management team examines the payment from the insurance company or other payer to see whether it has been approved or whether there is a discrepancy that is delaying payment. In the event of an error, the claim may be routed to the clearinghouse where it will be evaluated and cleared before being returned to the plaintiff with the right amount of money due.
10. Follow-up with Insurance
The American Medical Association (AMA) estimates that 1 out of every 5 claims is processed incorrectly, leaving the healthcare sector with an accuracy rate of only 80% when processing and paying claims. This establishes the significance of insurance follow-ups for timely receipt of claims. The most likely problems at this stage include denials, underpayments, or non-payments. If the hospital is not pleased with the payments, they may change the prices at the subsequent round of plaintiff discussions.
11. Billing and collections for patients
Patient responsibilities and balances are determined in the final step of healthcare revenue cycle solutions, and a statement is created. Unpaid accounts are closely monitored. Different patients’ payment balances are monitored. Patient populations are becoming more important due to the rise in high-deductible health plans because it directly affects the revenue of hospitals.
12. Cash Posting
Cash posting enables us to view the payments while presenting a picture of the financial practices, making it simple to discover any difficulties and rectify them right away. In Cash posting, when done correctly, makes sure to look at the primary areas of improvement in the revenue cycle management, which could help to increase revenue.
Depending on the coverage offered in accordance with the patient’s insurance plan and financial capability, cash posting may be either manual or automatic. Manual posting is time-consuming and prone to mistakes, raising the risk level. Auto posting, in contrast, is a digital solution that accelerates medical billing while offering a smooth revenue stream.
13. Reporting
Staying on target and avoiding costly errors are essential. The practice must have good reporting technologies for this. Your revenue cycle management process will go more smoothly if your medical billing software includes features for quality reporting. These tools make it simple to identify the frequent errors that hurt your income.
The importance of revenue cycle management
Management of the revenue cycle is crucial for any firm. It is crucial to maintaining the organization’s sound financial standing, which is why it is so important in the healthcare industry. The entire process’ cycle time is highly important. Businesses’ revenue cycles should guarantee that they get anticipated payments on a regular, predictable basis.
RCM’s overarching goal is to boost provider income, which primarily benefits patients. Revenue cycle management enables healthcare professionals to generate more revenue while spending less time on clinical and administrative duties. As a result, additional resources will be used to improve the patient’s experience by giving them better care and services.