Revenue cycle management in healthcare is often mistaken for the medical billing and coding functions of medical practice. But effective revenue cycle management (RCM) in the modern age goes beyond that and starts with the first patient contact point, and ends with the reply to an online review.
In this article, we will examine the definition of revenue cycle management in healthcare, why it is important, and how can you and your practice benefit from optimized RCM.
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Take a little break, grab a beverage, and watch our video below, explaining the differences between billing and RCM. If time is not on your side today, simply scroll down past the video.
What is Revenue Cycle Management in Healthcare?
Revenue cycle management in healthcare refers to the process of managing the financial aspects of healthcare from the point of patient registration to payment collection and beyond. It involves a series of interrelated processes, including patient registration, insurance verification, medical coding, billing, and payment collection.
RCM plays a critical role in the financial health of healthcare organizations, and it is essential for ensuring that providers are reimbursed for their services in a timely and accurate manner.
The Goal of RCM is to ensure that healthcare providers receive accurate and timely payment for the services they provide, while also providing patients with a positive experience as depicted in the diagram below.
In order to achieve this goal, healthcare organizations use a variety of technologies, such as electronic health records (EHRs), practice management systems, and billing software, to streamline the RCM process and minimize errors and inefficiencies.
Effective RCM requires close collaboration between different departments within the organization, including clinical, administrative, and financial staff.
Why is RCM important to Healthcare Practices?
Inefficiencies in practices can easily go unnoticed as staff are overworked and lack the resources to investigate and report on reoccurring inefficiencies. In addition, the silo effect within certain departments and lack of overarching accountability can hinder the discovery of such efficiencies.
- Financial stability:
RCM helps healthcare organizations to efficiently manage their finances and ensures that they are reimbursed for the services they provide in a timely and accurate manner. This contributes to the financial stability of the organization.
- Improved patient experience:
By streamlining the billing and payment process, RCM helps to reduce confusion and frustration for patients, leading to a better overall experience.
- Compliance with regulations:
RCM helps healthcare organizations to comply with regulations related to billing and reimbursement, such as the Affordable Care Act and HIPAA.
- Better Data management:
RCM helps healthcare organizations to collect, store, and analyze data related to patient care, treatment, and billing. This information can be used to improve patient care and make informed decisions.
- Increased revenue:
By improving the efficiency and accuracy of the billing and payment process, RCM can increase revenue for healthcare organizations. This can help them to continue providing quality care to their patients.
Overall, RCM plays a critical role in ensuring the financial health and sustainability of healthcare organizations while improving the quality of care they provide to patients.
What are the financial implications of proper RCM?
- Proper leakage analysis as detected across the entire revenue cycle and not limited to specific portions.
- Upskilling at lower costs. It is more affordable to outsource RCM to renowned experts than upskilling in-practice administrative personnel.
- Revenue increase. With experts at the wheel, having an eagle eye across the entire process, they are more efficient at optimizing income streams and eliminated snags that slow down or prevent the financial inflows.
- Improved insights: The third-party vendors have the capacity (mostly included in SLAs) to provide in-depth monitoring and reporting frequently.
- Compliance-risk reduction: The odds of receiving penalties for non-compliance are minimized.
What is the easiest and most cost-effective way to boost your revenue cycle?
There is a rising tendency nationwide for healthcare providers to seek out solutions that could benefit their practices in the long term, and that improve their chances of having a better work-life-balance as well as allow them the freedom to spend more time on providing healthcare services that fighting fires on the administrative front of their businesses.
The alternative to outsourcing revenue cycle management for healthcare is to upskill themselves, investigate, map, and optimize processes to adhere to best practices that will maximize financial prosperity will deduct time from providing patient care. The same applies to non-clinical staff that could get distracted from their daily routine activities, which could increase disruptions with subsequent revenue loss.
A Management Services Organization such as Neolytix, with over 10 years of experience in providing end-to-end non-clinical support through a consultative approach, can assist practices of all sizes in optimizing their revenue cycle management processes. By going this path, providers can improve their practice’s future financial stability to retain their independence and improve their work-life balance without sacrificing crucial patient time.
Schedule a Free, No-Obligation consultation to find out how you can create a robust RCM framework for your practice to increase financial strength now and for years to come.
