Understanding Medical Revenue Services and Revenue Cycle Management
The effectiveness of healthcare revenue cycle management can mean the difference between profitability and financial instability. Often, remediating a few seemingly small steps in the process can drastically improve a practice’s financial situation.
The moment a patient registers in your practice, the revenue cycle process begins. This first step, known as Registration, is when a patient’s financial and insurance information is collected. It’s also when your staff communicates your financial process and payment expectations. Is payment expected before seeing the doctor or after a claim is submitted to the patient’s insurance company? Is copayment expected at check in for an appointment or after the visit? How long do patients have to completely pay their bills? The list goes on. By transparently communicating the billing process of your healthcare organization, you increase the likelihood of complete revenue capture.
Ways health systems can improve Patient Registration:
- Ensure insurance information is entered correctly at registration.
- Verify insurance coverage when a patient schedules an appointment.
- Clearly communicate your financial expectations verbally and in writing.
Once a patient is seen and patient care has been completed, the next step is Establishing Charges or Charge Capture. Either your organization manually enters Current Procedural Technology (CPT) procedure codes and ICD-10 diagnosis codes or you’ve upgraded to a software system that automatically enters codes for you. Either way, thanks to the United States’ complicated regulation system and coding requirements, you’ll have to double and sometimes triple check claims before they are submitted to the health insurance companies. Mistakes are common when documenting these intricate and complicated codes. However, mistakes can cause claims denials that cost you money in time spent correcting and resubmitting the claim and additional time until reimbursement is received.
Ways to Improve Charge Capture:
- Hire experienced medical coding professionals. This is the #1 way to prevent denials.
- Establish a process for reviewing codes before claims are submitted to insurance providers.
- Track your claim denial rate and report on reasons for denial.
Now that the ICD-10 and CPT codes have been input and double and triple checked, it’s time to Submit Claims to the patient’s insurance company. The insurance company will verify the patient information, charges, the CPT codes, and the diagnosis codes to determine if the diagnosis supports the procedure performed. Every action you’ve taken to this point will affect the success or failure of this step. And this is where the revenue starts coming in. It is also critical to move the claim submission process along so patients can then be billed for their portion of the care.
What can happen during this step is the dreaded “denial of claim” rejection, which equals no payment to your practice. According to a Modern Healthcare article, in 2019, hospitals across the country lost approximately $262 billion per year from denied claims..
As discussed in the previous step, there can be several reasons for the denial. What you don’t want is for the claim denial to be the result of a clerical error that could have been prevented.
Examples of errors that result in a denial of claims are:
- Misspelling a patient’s name
- Incorrect patient date of birth
- Incomplete or missing patient information
- Missing or invalid CPT or ICD-10 codes
- Missing pre-authorization
Each denied claim costs your practice money, as it takes more time to run it through the process again.
How can you ensure a claim is successfully submitted?
- Focus on the front-end tasks, especially the patient registration and pre-authorization processes.
- Hire employees with education or experience working with insurance companies.
- Revisit your patient registration, pre-authorization and coding processes frequently to ensure accuracy and efficiency.
Once your claim has been accepted you are ready to Receive Payment – the final step in the RCM process. Your team takes the amount insurance paid on the claim and determines the patient’s out-of-pocket responsibility. This step is best handled with a combination of manual and automated tasks. Your team must be well versed in your unique financial payment plan to communicate to patients the expected payment schedule. In order to reduce costs and create greater efficiency, automation can be used to create the payment schedule, send reminders and even accept payment electronically.
To truly gauge how effective your RCM process is and to improve the amount of revenue you are collecting, one last step must be included: Data Analysis and Reporting. While not an official part of the process, this additional step is well worth the time and resources spent.
Healthcare organizations often employ the help of an RCM partner that has created a proprietary software solution that not only helps to improve efficiency and accuracy along the entire process but can provide these value reports and unique data that will improve your organization’s revenue.
As mentioned previously, these technology solutions can automate many time-consuming yet simple tasks, freeing up the administrative team for other duties.
Also, as the healthcare industry migrates from fee-for-service to value-based reimbursement models, an RCM partner can help you get a better view of your patient population through detailed reporting.
The data input in each of these steps, complying with regulations, and staying up to date on payer policy changes and behavior all play a major role in the effectiveness of your RCM process. An RCM partner should have expertise in U.S. government and industry regulations and areas where compliance is necessary.
An RCM partner handles the heavy lifting during payer negotiations, mediation, and arbitration in order to manage payers and ensure you receive optimal reimbursement in accordance with state and federal laws. Basically, your RCM partner covers all the bases with the goal of bringing in the maximum revenue owed to your practice.