In the current healthcare landscape, hospitals and medical practices need strong financial operations, in addition to quality clinical care, in order to succeed. Revenue Cycle Management (RCM) is a process that enables providers to receive payment for services provided and is a key factor in one's financial health.

An effective RCM process can help reduce lost revenue, increase compliance, and improve the overall patient experience. Below are the six key steps to developing an effective and efficient revenue cycle.

What Is Revenue Cycle Management?

Revenue cycle management services encompass the financial processes providers use to manage the collection of patient service revenue - from scheduling to registration to billing and collections. It involves collaboration between several departments - the front office staff, coding staff, and billing department, to ensure that everything is accurately documented, coded, and reimbursed.

If healthcare revenue cycle management is executed correctly, it will increase cash flow to the organization while reducing claims denials and delays that can negatively impact a healthcare organization's bottom line.

1. Appointment Scheduling

The process starts with scheduling, which is an important step in obtaining the correct information from patients and insurance companies.

Using an online scheduling system is one way to limit no-shows and appointment and registration errors. The scheduling stage also sets the stage for what patients can expect in terms of updated co-pays and the information documentation needed to complete their appointments.

2. Patient Registration

Information on the patient registration form should be timely and fully vetted so claims can be processed smoothly. This includes verifying insurance coverage, collecting co-pays or deductibles, and obtaining complete patient information. Even the smallest error can derail the claim if proper attention is not taken during registration. Integrating patient registration systems with electronic health records (EHRs) will reduce redundancy and improve the accuracy of patient data by eliminating duplicate data entry.

3. Charge Capture

Charge capture means identifying and recording everything the patient received, during their visit as well as applying the corresponding medical codes (ICD-10 for diagnosis and CPT for a procedure). Accurate codification is essential for receiving appropriate compensation for services provided. Organizations may perform periodic audits to help identify consistently coded errors; addressing these common mistakes can improve claims success rates.

4. Billing

After the services and code capture, the billing staff submits claims to the payers and issues patient bills. A clean claim—one that is free of errors and complies with payer rules—expedites reimbursement.

The billing staff, unless using a third-party partner with significant experience, needs training to identify and resolve any issues with claims proactively. Third-party outsourcing of billing processes can decrease expenses, but a resulting loss of patient trust often outweighs the savings. During this time, consider Revenue cycle management services as they can improve both the patient's experience and the results.

5. Denial Management

Unfortunately, no billing system is perfect, and even the best submission policy or process will still face claim denials. A purposeful denial management process is vital to ensuring revenue recovery and improving future submissions.

Denial reasons are often standard—missing documentation, inappropriate codes, etc.—which can all be prevented with experienced billers who know how to make their own changes well before resubmitting.

6. Accounts Receivable (A/R) Follow-Up

The last step in the revenue cycle is managing and following up on unpaid claims. Accounts Receivable follow-up best practices include:

Tracking outstanding claims and timelines
Following up to resolve issues by contacting payers and/or patients
Providing payment plans when appropriate.

A/R management software can help automate the process as much as possible, highlighting the manual work for the supervisor and enhancing cash flow.

Conclusion

Managing the revenue cycle is not just about billing. It's an all-encompassing strategic framework that keeps a healthcare business financially stable and improves patient care in the process! By focusing on accuracy, compliance, and communication through all six stages of the RCM cycle, healthcare organizations can both increase reimbursement rates and minimize loss in revenue.

If you are processing all or part of your RCM in-house or a couple of parts with a partner, sharing the journey at the right point can be really advantageous. At DigiMedicus, our team of RCM professionals is passionate about helping healthcare providers enhance your whole process so you can succeed financially!

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