A variety of factors contribute to the success of a medical practise. Revenue cycle management is one of the most important.

What is the significance of revenue cycle management in healthcare?

RCM Healthcare to ensure that they are properly and quickly reimbursed for their services. While this is certainly advantageous to the provider, it is also advantageous to the patient.

Before we get into why ensuring reimbursement makes RCM so important, let's define RCM.

What exactly is Revenue Cycle Management (RCM)?

Revenue cycle management is exactly what it sounds like: a strategy that healthcare providers can use to manage their revenue cycle's administrative and clinical functions. The revenue cycle begins when a patient contacts a healthcare provider to schedule an appointment. When all payments for the appointment and treatment have been collected, the cycle is complete.

The goal of revenue cycle management is to identify and resolve any points of friction in the provider's revenue cycle. Care providers can maximize claim reimbursements and increase revenue with proper revenue cycle management.

The Healthcare Revenue Cycle Steps

There are numerous steps in the healthcare revenue cycle. This means there are numerous opportunities for mistakes to occur. Any errors in the revenue cycle can cause the provider's reimbursement from insurers and patients to be delayed or halted entirely.

Let's take a look at the steps in the healthcare revenue cycle to get a better understanding of where errors can occur and how RCM can prevent them:

Pre-approval and eligibility verification

When a patient schedules an appointment, the healthcare provider gathers information to create a patient account. This includes gathering the patient's insurance information and verifying their eligibility for coverage.

Even if a patient already has an account with the provider, revenue cycle management emphasizes the importance of correctly completing this step. Incorrect information or ineligible insurance will result in a claim being denied later in the revenue cycle. This means that the provider's reimbursement payment will be delayed. It also means more work for the provider, who must then go over the patient's information to correct any errors.

Capturing and coding of charges

Charge capturing is the process of converting patient services into billable charges by using universally accepted medical codes. These codes are used by insurers to calculate reimbursement amounts.

The insurance company may deny the patient's claim if proper medical coding is not used. As a result, provider reimbursement is delayed. It also costs the provider time and money to investigate and appeal denied claims. Effective revenue cycle management ensures coding accuracy, allowing denials to be avoided entirely.

Submission of Claims

The claim is sent to the insurance company for approval once a patient's treatment has been properly coded. RCM ensures that this submission occurs as soon as possible by tracking and managing the claim from the beginning of the process.

Receipt of payments

Following the approval of the patient's claim, the insurance company reimburses the provider based on the patient's eligibility. If there is a balance after insurance reimbursement, the provider is responsible for contacting the patient to collect the balance.

By streamlining claims processing, revenue cycle management speeds up the patient payment process. Furthermore, because RCM places a greater emphasis on front-end tasks such as insurance eligibility verification, patients will know what out-of-pocket expenses they are responsible for paying from the start. This, once again, aids in avoiding any delays in collecting the final payment.