In the field of healthcare, the word healthcare revenue cycle management is the procedure of managing and improving the finances of an organization in healthcare, beginning with the first patient encounter until the last payment. The revenue cycle for healthcare consists of a sequence of steps to be executed effectively and accurately to ensure that payments can be made.
What Is the Purpose of Managing the Revenue Cycle?
The purpose of a revenue cycle management system is to ensure correct and timely reimbursement of the practices’ healthcare services. With a well-planned healthcare revenue cycle management, both payers and the patients get accurately charged for the services they require, and practices get paid what they’re due promptly.
How Do You Determine the Stages of the Healthcare Revenue Cycle?
The name suggests that,, the process of generating healthcare revenue cycle management is cycle-like, with each step leading to another before beginning again. Here are the most important actions to be taken by healthcare companies:
Registration Of Patients And Scheduling
The initial step in the revenue cycle for healthcare is to register new patients, update their records, and make an appointment to see them.
This is essential to ensure that the practice has the most accurate and current information on the patient that is required for billing, treatment, and reporting.
Scheduling is essentially the process of arranging appointments for patients who need to access services. It can be accomplished by the front desk staff or through a portal for patients or applications.
Scheduling is essential to the revenue cycle as keeping a schedule that is optimally dense lets doctors devote their preferred amount of hours to their patients while simultaneously treating as many patients as they can during the course of the day. Strategic scheduling can boost revenue and can help improve health outcomes through the continuous care of patients.
Verification of Insurance And Eligibility
The next step of the healthcare revenue cycle management is confirming the patient’s insurance. It’s crucial for providers to confirm that the patient is covered by an insurance policy and what the conditions of the coverage are, as this will determine how much your practice will be reimbursed for the services.
It also aids in preparing patients for the amount they’ll be required to cover out of pocket, and it is best to notify them in advance before providing services.
Medical Coding And Charge Entry
When services are rendered after services are provided, they should be correctly recorded. Medical coding is the process of transcribing medical procedures, diagnoses, and procedures into standard codes to bill and determine the purpose of reimbursement.
It could be accomplished manually by a medical professional or automated to a certain extent by an IT platform for healthcare.
For example, certain integrated healthcare platforms allow doctors to choose pre-populated codes prior to the patient’s visit or use technology that allows for language processing to process medical documentation and generate codes automatically.
It is the procedure of entering data encoded into your organization’s billing system. Correct charge entry is required to minimize the chance of denials on claims and overbilling.
Submission of Medical Claims And Processing
After claims have been properly coded, they can be submitted to the insurance company for reimbursement.
The process of submitting claims is often done electronically, usually through the revenue cycle management platform or by means of clearinghouse services.
This is a field in which cutting-edge technologies like artificial intelligence and machine learning are bringing value.
The submission of accurate, clear claims can greatly improve the revenue cycle as it ensures claims are usually approved on the first try, which reduces the time it takes to process, reduces work to follow up, and increases your bottom line.
Posting of Payments And Reconciliation
Pay posting involves recording and reconciliation of the payments made by insurers and patients in exchange for the health services rendered to patients. Reconciliation is the process of comparing recorded payments to the anticipated payments to verify their precision and to determine any differences.
These procedures are vital to maintaining precise financial records and making sure every payment has been recorded in the revenue cycle.
In-house resources don’t need to complete this task. For instance, some platforms in the field of technology, such as PerigonMed, provide services that handle this type of task and ensure that the verified information is entered into the system.
Management of Claims Denial And Appeals
If a claim is denied and a denial is managed, appeals are usually required.
A denial is when insurers have decided that the claim doesn’t conform to their criteria for coverage or guidelines. Denials can be triggered by a variety of reasons, including incomplete data, errors in coding, lack of medical necessity, or eligibility concerns.
However, the main objective is to avoid claims being denied whenever possible. This can be accomplished proactively by using an RCM platform like PerigonMed.
RCM capabilities such as PerigonMed and enhanced claim resolution reviews claims and determines the issue prior to the submission and analyzes, addresses, and solves any claims that occur. It is fully integrated into PerigonMed.
Billing For The Patient And Collections
After the insurer has settled an amount, the patient could have a balance left over for the patient’s coinsurance, deductible, or copayments, as per their policies.
Many practices will collect copays prior to service because they are identified at the time of insurance verification. This helps the practice get a share of the income right away and decreases the need for billing afterward.
How Is Optimizing The Revenue Cycle For Healthcare Vital?
Management of the revenue cycle is a vital procedure for healthcare institutions for many reasons, such as:
- Establishing and maintaining financial solidity and stability over the long run.
- Improved cash flow to ensure practices are able to meet their financial obligations
- Increased revenue capture
- Assisting in the compliance of healthcare regulatory policies and guidelines
- Establishing operational efficiencies
- Making sure that the patient experience is improved keeps customers coming back.
These great benefits are achievable by healthcare providers who understand the particular healthcare revenue cycle management related issues they confront, efficiently utilize technology to overcome those obstacles, and begin to optimize their revenue cycle to get faster, more thorough reimbursements and better bottom lines.
