According to an article, a healthcare organization’s revenue cycle is its financial circulatory system. With healthcare as one of the most progressive industries in the world with advanced technology, improved training for personnel and state of the art global-partnered hospitals, it is no wonder that few organizations have perfected their revenue cycle process.
A hospital’s revenue cycle management (RCM) is the process that manages claims processing, payment and revenue generation. This process begins as soon as a patient calls in for an appointment and ends when their due amount is zero.
According to MedPage, RCM is a process for healthcare to ensure that the hospital (and its doctors) get paid for what they do and that they get paid in a timely fashion. After all, we may say that a hospital runs on its state-of-art equipment, world-class health professionals and compassionate care, but without money financing everything, all of these would be worth nothing. Revenue is what keeps a healthcare organization’s operations running and this is why RCM is extremely important.
Ralph Bernstein, senior vice president of US Bank Healthcare Payment solutions said, “Without some critical changes to provider workflow and revenue cycle management practices, providers will, in coming years, spend even more time and money chasing patient receivables and dealing with increased levels of uncollectible patient responsibility dollars.”
The revenue cycle, based from its name alone, goes through different touch points or aspects to complete its cycle. We can analyze the cycle in this way:
A patient (known as customer) goes through a process that requires medical care. He goes to the hospital and needs to go through different areas in the hospital (aspects) to be able to get the healthcare he needs. The hospital departments most often included in traditional revenue-cycle operations teams include payer relations, scheduling, registration, case management, coding, billing, and denials management.
In a hospital context, the purpose of revenue-cycle management is to optimize the patient financial experience along the entire continuum of care. This means that various patient financial touch points — including insurance contracts and the collection of co-pay and deductible expenses — require the patient’s active involvement. Hospitals retain a strong incentive to harmonize the patient financial experience to improve patient satisfaction and to reduce the risk of denied charges by insurance companies.
Managing a Healthcare Organization’s RCM
An article mentioned that for revenue cycle management to be effective, it needs to gather data correctly and comprehensively, verify eligibility when it comes to insurance claims, use the right numbers for accurate patient registration and billing and automate the RCM process as much as possible.
Note that the RCM begins with data collection. Managing a revenue cycle effectively requires a solid workflow process in data gathering and collection. It is not only imperative but crucial to accurately capture patient demographics and insurance. Many hospitals track several different core measures related to the patient financial experience. For example, registration team tracks the accuracy of staff because inaccurate collection of data can lead to denials or compromise patient safety. Leaders also watch the coding backlog — the longer it takes to get a discharged patient’s bill to the insurance company, the longer it takes to be reimbursed for care already delivered. Billing leaders monitor denied-claim rates and benchmark them against industry averages.
Healthcare reforms have also shifted patient care to being value-based so hospitals are encouraged to make patient experiences – from the first call to discharge or follow-up – a pleasant experience. RCM plays a big role in this patient experience. It doesn’t help that contemporary billing has become almost as complex as the practice of medicine itself and is only becoming more complicated with recent legislative changes and ICD-10 on the horizon.
An article featured Jane Sarasohn-Kahn, health economist, management consultant and Health Populi blogger saying that today’s health providers need to focus on revenue cycle workflow because they will be caring for patients over the long term, not episodically. “That means looking horizontally at the value-chain of care, from pre-encounters through to the post-encounter administrative tasks,” she said. “At the front end, the provider must capture and clarify the insurance and payment provisions for the patient.
“Throughout this chain, RCM systems can help health providers pinpoint areas for cost improvement in real time. The systems should also be able to integrate clinical and care management information along with the financial information along the patient’s journey.”
Should Revenue Cycle Management be Outsourced?
RCM needs have become more complex. It needs to take care of the business side of things when it comes to patient care (appointment setting, billing charges, reimbursement, follow-up and discharge) and needs to be coordinated with the clinical aspect of things too. On top of this is dealing with different insurance carriers, complex medical encoding and ever-changing technology.
Integration is the key.
A good revenue cycle management needs to have a three-pronged approach: process, analytics and technology. It needs to harmonize business practices across the revenue cycle and seamlessly integrate it in the clinical aspect of patient care.
Because improvements take time, especially when it’s not your core competency (especially in healthcare), partnerships with an outsourcing company that handles this effectively is an important strategic option.
When a healthcare organization decides to outsource their revenue cycle management, it can concentrate on their core competencies. They will be utilizing a workforce that is knowledgeable in security and compliance metrics. They will get unbiased monitoring and compliance measurement when it comes to information protection.
Furthermore, nearly half of all patients seen in an average specialty practice are comprised of Medicare patients. Improving the efficiency of collections is vital.
When a healthcare organization decides to outsource their revenue cycle management, they are provided to reduce their business overhead and improve cash flow because of increased efficiency in data gathering and billing collection. This allows them to focus on delivering quality patient care.