Revenue cycle management takes care of the financial flow of healthcare organizations. It includes managing all those activities which generate revenue for healthcare organizations like starting from booking an appointment to payment of remaining balance and RCM assures error-free billing process, as well as patients, develop trust with the organizations that they are getting the full value of the treatment they are undergoing.
It is necessary to understand various steps involved in RCM and in the following brief, you can get an overview of it.
Steps involved in revenue cycle management
Pre-registration and appointment-
When a patient books an appointment, organizations collect data regarding their demographics, information related to insurance taken by the patient and then deduce the eligibility for treatment as per insurance cover.
Because insurance companies play a vital role in revenue generation for a healthcare organization, so it becomes necessary for them to verify the cover to avoid any disputes in the future.
Charge capture and claim submission-
After providing needed treatment, physicians and doctors send all relevant information regarding the service and treatment provided to insurance companies for getting paid for their work.
Claim management and Revenue Recovery-
Back-end tasks are performed like posting payments, managing claim denials, statement processing, and other follow-ups with insurance companies.
After processing payments from insurance companies, patients are meant to pay the balance of the billing. This is the last step of the revenue cycle as the balances are paid off by patients.
After knowing about various steps,” Why” RCM is important for you hence various RCM advantages are mentioned below.
Advantages of revenue cycle management
Funds in an organization ensure smooth flow of operations and revenue cycle management manages those funds generations in healthcare firms, apart from it offer other benefits like-
At the stage of appointment of the patient, revenue cycle management does the background check related to insurance taken by the patient, and other related information of the patient, it ensures that no piece of data is left unchecked, and all inputs needed to go ahead with treatment are collected.
Revenue cycle management helps in accurately determining costs of the whole service including treatment which is to be provided to the patient and it reduces all chances of error that might happen in the manual calculation of such costs.
Cash flow management-
It also aids in managing healthcare organization’s present cash flow by estimating costs acquired while providing treatment, payment reimbursements from insurance companies, and settling balances from the patient.Effective cash flow management is necessary for the uninterrupted working of the organization and the steps in the process of revenue cycle assure that.
Ease in collection process-
Revenue cycle management is processing involving steps of collecting billing payments from insurance companies and patients, these steps make the collection process effortless because of the systematic cycle in place, and therefore it also helps in avoiding unforeseen uncertainties.
Improve patient experience-
The objective of a healthcare organization is to provide continuous support to patients through their services and revenue cycle management helps healthcare firms to provide such an improved experience because the physicians and doctors are not occupied with thoughts of payments and reimbursements.
However, with all the above advantages healthcare organizations or physicians are facing various challenges which should be addressed properly for revenue optimization and stay afloat in the practice. Let’s understand various challenges.
Challenges uncovered in revenue cycle management
Patient eligibility check-
Many healthcare organizations fail to undergo thorough research on the eligibility of insurance taken by the patient which results in problems on the way of reimbursements of claims submitted to insurance companies.
Strict clearance process-
Healthcare organizations face the challenge of getting authorization from insurance agencies for the treatment prescribed to the patient. They get stuck in their terms and conditions to comply with which cause a problem in agreeing for the further claim process.
Because insurance companies have to comply with their own set of policies and rules, it becomes a tedious task for healthcare organizations to get reimbursements on time, and therefore the whole process of generating revenue for that service provided gets delayed.
Changing regulations of payer-
In the case of healthcare organizations, insurance companies constitute the majority of the Payer category and because of their changing requirements, terms, and conditions, it becomes difficult for healthcare firms to comply with them and stay up to date with their recent changes.
Claim denial management-
A sound process is missing with the cases where claims are denied, there is no proper information regarding how to move ahead with such cases and that is the major reason which hurts patients’ experience with the healthcare firm.
Hampers productivity to a certain extent-
Physicians and doctors are also well aware of the fact that changing compliances of insurance agencies can cause delay or denial in the claims submitted which in turn hampers their productivity while providing service to the patients.
Now you have a better understanding of overall revenue cycle management and its challenges. However, if you are looking for outsourcing your medical billing then you can get in touch with us. We are a team of experienced billers and coders and have expertise in revenue cycle management.