What Is Healthcare Revenue Cycle Management?
The primary job of a healthcare provider is to treat patients in the best possible manner and save lives. Hospitals and other healthcare organizations can only survive and be successful if they give the utmost attention to their patients. One of the key factors that determine the overall success of the healthcare practice is revenue cycle management. Without it, critical processes, such as payment, claims processing time, and even revenue generation could be significantly disrupted.
Let’s look at what healthcare revenue cycle management is, how it works, and the overall benefits it provides.
What is The Role of Revenue Cycle Management in Healthcare?
As the name suggests, it’s a management strategy that particularly deals with the revenue cycles of the healthcare facility. The revenue cycle process begins the minute a patient arrives at the healthcare facility to schedule an appointment. This revenue cycle will continue until the patient is treated and all the payment is paid. Once all the payments are paid, the cycle ends. The primary objective of revenue cycle management is to oversee the whole cycle and to resolve the hurdles at any point during the cycle.
The Benefits of Revenue Cycle Management in Healthcare
Quickly Identifying and Resolving Errors
Proper implementation of revenue cycle management can help identify errors quickly that may have popped up in the cycle. This allows healthcare providers to decrease the chances of insurance claim denials by over 90%. Most of the insurance claim denials happen due to technical errors and improper coding that can be avoided with solid Revenue Cycle Management at hand.
Helps Decrease the Burden on the Administrative Side
When insurance claim denials happen, it falls onto the administration department to appeal the case and handle the issue, involving a lot of time and resources. When claim denials decrease, it frees the administration staff to deal with more pressing issues. Not to mention, revenue cycle management also makes the interactions between the patient and the administration staff much easier.
Avoiding Common Healthcare Fraud
The issue that has exploded in recent years is healthcare fraud. Do you know healthcare fraud causes the healthcare industry to lose billions of dollars in revenue every year? The number of cases is so high that doing a proper fraud investigation is not possible due to the staggering amount of expenses that are involved in these processes. Healthcare revenue cycle management services can help to avoid these common healthcare frauds.
Lower Patient Fraud
A lot of times, healthcare fraud happens due to patient dishonesty, either by providing false information or through medical identity theft. Patients can lie about their information to make themselves eligible for insurance, for which they are not. However, due to revenue cycle management, such misinformation can be quickly identified.
Increase Healthcare Facility Revenue
Revenue cycle management helps increase the revenue of healthcare facilities by helping them avoid technical errors, misinformation, unnecessary claim denials, and more. This helps them save precious time and costs that would have otherwise been spent on dealing with those issues.
Steps Involved in the Healthcare Revenue Cycle Management
There are a couple of steps involved in the revenue cycle of healthcare facilities. These steps are critical in nature, and any deviation can halt or delay the claims process and more.
Eligibility Verification and Pre-authorization
As soon as a patient arrives at a healthcare facility to make an appointment, the facility will note down all the information it needs to set up a patient account. In this process, the patient’s insurance info will be noted and will be verified to check if they are eligible. Insurance eligibility verification is a critical process in the healthcare revenue cycle.
Coding and Charge Capturing
Insurers use medical coding to verify a patient’s claim for reimbursement, and the same medical coding can be used to transcribe patient services into billable charges. So, having proper medical coding is necessary for the quick and easy processing of reimbursement claims.
Submission of Claims
Once all the treatment and other expenses are properly coded, they will then be sent to the insurance provider for proper validation and approval. Revenue Cycle Management aids the process and helps it get done quickly.
Payment Collections
Once the insurance company validates and approves the claimed amount, it will be provided to the healthcare facility on behalf of the patient. But if there’s any balance amount after the insurance company reimburses the amount, it falls onto the healthcare facility to collect the said balance from the patient before they leave the facility.
The Bottom Line
The main goal of Revenue Cycle Management here is to increase revenue for the healthcare provider while decreasing the issues that often plague the administration offices. All this inevitably helps in patient care, which in turn will help boost the public perception of the healthcare facility.
