In the complex world of healthcare, especially in the case of larger practices or physician groups, managing the revenue cycle is a critical process that directly impacts the financial health of the organization. The revenue cycle management (RCM) process is a series of steps that healthcare providers undertake to manage their revenue streams, from patient registration to claim submission and payment collection.
It’s a complex and multifaceted process that requires close attention to detail and a deep understanding of the healthcare industry. Practices looking to optimize their revenue streams or looking to scale need to expand their view to include the entire revenue cycle instead of just focusing on medical coding and billing.
In this article, we will highlight the 16 steps of the revenue cycle management process and discuss the importance of each step in ensuring financial stability for healthcare organizations.
What is Revenue Cycle Management for Healthcare Providers?
Revenue cycle management (RCM) for healthcare providers refers to the process of managing the financial aspects of a patient’s visit to a healthcare facility, from appointment scheduling to claims processing and payment collection. It covers everything from a patient’s initial appointment to the final payment approval by the payor.
The RCM process involves multiple steps, including submitting medical billing claims to insurance companies, assigning appropriate medical codes to procedures, converting medical services into billable charges, and collecting payments from patients for any outstanding balances. Further details about the RCM process are provided later in the article.
What is the Difference Between Revenue Cycle Management and Medical Billing?
Take a load off, grab a beverage, and watch our video explaining the difference between medical billing and revenue cycle management. If you’re in a rush, just scroll past and continue reading below.
Medical billing is the process of submitting medical claims to insurance companies for reimbursement of services rendered to patients, while revenue cycle management encompasses the entire process of managing and optimizing the financial aspects of a patient’s healthcare experience, from appointment scheduling to collecting payment for services rendered.
Medical billing is one of the steps of revenue cycle management in healthcare, but RCM also involves other functions such as patient registration, eligibility verification, charge capture, and denial management. In short, medical billing is a subset of revenue cycle management.
What are the 16 Steps in Revenue Cycle Management?
Revenue cycle management (RCM) is a crucial process for healthcare providers that involves managing the financial aspects of a patient’s visit from appointment scheduling to payment collection. The 16 steps in revenue cycle management are essential to ensure that healthcare providers receive timely payments for the services they provide.
The first step in the revenue cycle management process is scheduling an appointment with the patient. This involves collecting their personal and medical information, such as name, date of birth, insurance details, and reason for the visit.
The demand for virtual assistants continues to increase, and appointment scheduling is one area where virtual receptionists are excelling.
After scheduling an appointment, the patient must complete registration forms that include their demographic and medical information. This data is used to verify eligibility and benefits, as well as to provide accurate billing.
Eligibility and Benefits Verification
Healthcare providers must verify a patient’s insurance coverage and benefits to determine their payment responsibility. This involves checking the patient’s insurance plan for co-pays, deductibles, and other payment details.
Utilization review ensures that healthcare services provided to patients are medically necessary and meet insurance coverage criteria. This review is conducted to prevent unnecessary treatments that may result in claim denials or non-payment.
Referral and Authorization
Some insurance plans require a referral or authorization from a primary care physician or insurance company before receiving specialty care or services. The healthcare provider must ensure that the patient has obtained the necessary referral or authorization before rendering services.
Healthcare providers must provide a detailed description of the charges incurred during a patient’s visit. This includes services rendered, medications prescribed, and any medical devices used.
Coding and Billing
The coding and billing step involves assigning appropriate codes to medical procedures and services, ensuring that the claim accurately reflects the care provided. This process helps to avoid claim denials or incorrect payments.
With the continuous changes in billing codes and administrative practice personnel under constant pressure, the ideal conditions are created where revenue can leak from the practice. This is where revenue cycle management specialists like Neolytix remain focused due to their extensive resources and expertise.
After billing the insurance company, healthcare providers post the charges to the patient’s account. This step ensures that the patient’s account balance is up-to-date.
Once the charges have been posted, the healthcare provider submits the claim to the insurance company for payment.
Sometimes, insurance companies deny claims due to incorrect coding or incomplete information. Healthcare providers use clearinghouses to track and manage these claim denials.
After the insurance company approves the claim, the payment is posted to the patient’s account. This step ensures that the patient’s account balance reflects the payment received.
Denial management involves resolving any claim denials or issues that may arise. Healthcare providers must identify the cause of the denial and take the necessary steps to resubmit the claim for payment.
If the initial claim is denied, the healthcare provider may need to file a secondary claim with the patient’s secondary insurance provider. This step ensures that the healthcare provider receives payment for the services rendered.
The accounts receivable step involves managing the patient’s outstanding balances. This step ensures that the patient’s account remains up-to-date and that the healthcare provider receives payment for the services rendered.
If a claim is denied, healthcare providers can appeal the decision. The appeal procedure involves providing additional documentation or information to support the claim and to ensure payment.
Patient Billing Collections
The final step of the revenue cycle management process is patient billing collections. This step involves sending out statements or invoices to patients for outstanding balances. The healthcare provider may also work with a collection agency to collect payment.
What are the Benefits of a Holistic Revenue Cycle Management Approach?
A holistic revenue cycle management approach in healthcare can provide several benefits, including increased efficiency, improved revenue, and better patient experiences. It can also help healthcare providers to identify and address any gaps in the revenue cycle process, reduce claim denials, and minimize billing errors.
Additionally, by focusing on the patient’s experience and ensuring that patients understand their financial responsibility, a holistic revenue cycle management approach can improve patient satisfaction and loyalty.
Overall, a comprehensive approach to revenue cycle management can help healthcare organizations to achieve financial stability and provide better care to their patients.
Outsourcing Revenue Cycle Management
Outsourcing revenue cycle management is a popular strategy in the healthcare industry, for small practices looking to scale, mid-sized healthcare organizations, and larger medical institutions. Outsourcing RCM can save time and money while improving revenue streams and patient satisfaction. However, it’s important to choose the right outsourcing partner and implement best practices to ensure success.
Neolytix, with over 11 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. With expertise in every step of revenue cycle management, Neolytix can assist providers to:
- Improve their practice’s future financial stability
- Retain their independence
- 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.
Schedule a Free Consultation to learn more about optimizing your revenue cycle
Complete the form and someone from our team will be in touch with you!