This is the first of a three part series that will cover the processes encompassed in revenue cycle management. The second part will give you a closer look at the solutions under Front-End and Transaction Processing, while the last part of this series will discuss the Back-End and Support level of a healthcare revenue cycle.
Hospitals and clinics are primarily meant to provide health care to the society but while at it they are still considered businesses since they have to gain some profit in the process. The basic source of revenue for health care systems is patients and therefore the whole revenue cycle management revolves around them. It basically begins at that point when a patient calls the hospital to book an appointment or walks in for treatment to the point when they have paid all their bills and their account balance reads zero. As a third party medical billing company you are probably charged with handling the process and you are probably already doing that properly but let’s take a closer look at the cycle and see why you might need outsourcing companies at some point.
The first step in the cycle is to take demographic data including the name, employment status, address, marital status etc. and insurance claim information including the amount being claimed and the insurance company. This is a procedure that the health personnel in the hospital are trained in and will probably do well enough. After data collection the coding process comes in and your company or other health personnel will also handle well.
After these initial steps you are faced with front end editing and transactions processing which are some of the procedures that require high attention to details. You need to check that there is no redundancy or errors in the data presented i.e. the data must be accurate and consistent before being forwarded to the insurance companies to lay claims. If the claim goes through, there are more procedures involved and they also have to be accurate and on point especially because they involve cash transfers. You can use your resources to ensure this is well done and transactions are well-taken care of. However, the work can be done even better when you use the services of an outsourcing company that specializes in ensuring the procedure is smooth and aligned with industry standards.
During the revenue cycle management process some claims are denied and as a billing company you need to handle this appropriately. This involves promptly notifying medical personnel and the patient of the situation in order for them to decide on the next course of action which could be getting billing experts or looking for other payment alternatives just to mention a few.
The back end and support now come into play and they involve taking care of patients’ balances including deductibles and co-pays among others. As a billing company you probably need assistance because some patients could have several cycles and all these will need to be consolidated before the final payment statement (e.g. medical insurance verification), which charges patients from their credit cards or paychecks, is issued. There are two ways an efficient outsourcing company would be of benefit: consolidating the balances and collecting the revenue.
As a billing company it is also your responsibility to monitor the payments as they flow from the insurance companies to the hospital accounts whether in paycheck form or solid cash as well as reporting regularly on payment results and statistics. These are healthy practices for any financial institutions.
Revenue cycle management typically ends when the patient remits the entire amount expected from them and the hospital gets their revenue in full amounts but there are other prior processes that are important as well to understand the whole concept of a healthcare revenue cycle.
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