What Is Revenue Cycle Management In Healthcare (RCM)?

Your business relies on its income, and the revenue you obtain helps you keep it afloat and (hopefully) growing. But, to keep an eye on your revenue, you also have to focus on revenue cycle management, a 17-step process.

Getting To Know Revenue Cycle Management (RCM)

Revenue cycle management (RCM) helps your healthcare organization get paid for services rendered. Patient scheduling is the first step. The final step is payment reconciliation, which allows the business to get paid.

Defining Revenue Cycle Management in Healthcare

In healthcare, revenue cycle management (RCM) has 17 steps broken down into three sections. The first section, order to intake, includes the following steps:

1. Scheduling
2. Pre-registration
3. Clearance
4. Financial counseling
5. Arrival
6. Pre-service payment (such as a copay)

The next section includes care to claim steps such as:

1. Level of care
2. Case management
3. Utilization review
4. Charge optimization
5. Medical coding
6. Acuity capture

Finally, there is the claim to payment section, which includes steps such as:

1. Medical billing
2. Patient payments to the healthcare organization
3. Denials management
4. Customer service
5. Reconciliation

Ensuring all these steps can take place with few, if any, hitches improves the chances of healthcare providers getting paid for their services within a reasonable amount of time. Additionally, the process ensures that accurate patient information is gathered and that patient care can be delivered as intended.

What is the purpose of RCM?

In healthcare, the purpose of the revenue cycle management process is to be sure a patient receives complete interaction throughout every part of the experience. From the start, it’s necessary to ensure patients are addressed during the initial inquiry and throughout each stage of their lifetime with the provider or healthcare organization.

The Revenue Cycle in Healthcare

The revenue cycle in healthcare goes through 17 steps, each one with its own importance. Sometimes, those steps can be combined, such as in the case of billing, coding, and charge capture. Here is more about each of the steps and what you should expect during them:

Scheduling

Scheduling is the first step of the revenue cycle and involves the intake of a new patient. It doesn’t necessarily include collecting patient information, which occurs during pre-registration or patient registration. Scheduling requires the patient to be placed on the schedule, which will happen simultaneously with, before, or after pre-registration.

Pre-registration

Pre-registration is the step that involves collecting patient information before they come to their appointment. This step is important because it allows healthcare organizations to collect insurance details and demographic information up front rather than waiting until the appointment date. This patient information is necessary for the patient’s file as well as other data collection needs.

Patient Registration

Patient registration is another step in the revenue cycle management process. During patient registration, healthcare organizations can collect pertinent patient information, including their medical history and other details.

Insurance Verification and Authorization

Healthcare organizations have to verify a patient’s insurance and obtain pre-authorizations. Verifying insurance is important for several reasons, including claims processing and reimbursement later in the medical billing process.

Charge Capture and Coding

Charge capture and coding are other steps that help identify the services that have been performed for the purposes of medical billing and reimbursement. Insurance claims use ICD-10 and CPT codes, for example, as well as others in claims processing. Healthcare organizations and their accounts receivable departments should be up-to-date on the latest codes, all of which are standardized in the industry to make the claims management process more straightforward.

Claim Submission

Following charge capture and coding, claims can be submitted to insurers for reimbursement. Billing software can simplify claim submission, as medical billing is a regular part of the revenue cycle management (RCM) process.

The payer will need to go over the claim to identify if it’s one it will cover. If so, it may be covered in part or in full. If it is denied, then it’s necessary for the healthcare organization to have a denial management process in place.

Denial Management

Denial management is the process of managing denials and appealing those denials through the insurance company. Denials can happen for many reasons ranging from improperly coding the procedure to the service not being covered by the insurance policy at that time.

Payment Posting

Payment posting happens after the insurance provider covers the cost of the procedure in full or in part. The payment is posted to the patient’s account, and any remaining debt is then billed to the patient as a part of the patient billing process.

Patient Billing

Patient billing is necessary when there is a portion of a service’s cost that is not covered by insurance. Patients may be billed charges such as fees for copayments, deductibles, or services not covered (or not covered in full).

Collections

Unfortunately, there are times when healthcare organizations are left with a difference between the amount billed and the amount received from insurance providers and patients. Often, patient care is delivered, but payments aren’t made on time or in full. It is necessary to take a patient or other party to collections to attempt to collect that debt. However, the collections process also involves sending reminders about the bill being due and working with patients to create affordable payment plans.

Reporting

Another step of the revenue cycle management process is analyzing key performance indicators (KPIs) and reporting on the health of the entire RCM process. By looking into this data regularly, it is possible to flag areas in RCM that require improvement or more attention, which can, in turn, improve revenue.

Healthcare Revenue Cycle Management: 9 Best Practices

From tips for claims processing to knowing how to provide better patient care through good communication, healthcare providers should follow these guidelines to ensure a consistent and well-adjusted revenue cycle management process:

Collect and Verify Data

The first thing to do is collect patient payments and patient information prior to the point of service. That means you should collect patient details and insurance information before a procedure or treatment is ever performed. Doing so limits the risk to your healthcare organization and helps start the patient’s case and file with accurate information.

Be Compliant With the Law

Before you collect patient data or begin claims processing for reimbursement through your accounts receivable department, ensure that you have reviewed all relevant regulations. You should be aware of patient privacy laws as well as other compliance measures you need to take to avoid regulatory penalties.

Invest in Coding

Your staff needs to know commonly used medical codes, and they should have training on appropriate coding for services. Inaccurate codes can lead to denied claims. Invest in continuing education to ensure correct coding.

Use Automated Claim-Scrubbing Tools

Automated claim scrubbing tools are excellent for identifying and correcting mistakes that could lead to insurance denials or delays in receiving reimbursement.

Systemize Claim Submissions

By systemizing claim submissions, it’s possible to submit both accurate and complete claims within a standard turnaround. By doing so, you’re accelerating the rate of reimbursements through accelerated submissions.

Track Claims

Track claims as they move through the reimbursement process. If there are any denials or you get a request for additional information about a procedure or patient, having a tracking system will let you respond rapidly to reduce delays.

Have Stellar Patient Communications

To improve the patient experience and improve your healthcare organization’s revenue cycle management processes, keep patient communications open. Patient access to billing information and ways of paying bills via text or other methods helps ensure they know when a bill is due and can ask questions if they have them.

Offer Exceptional Customer Service

When patients reach out to your healthcare organization, creating an excellent patient experience is the key to keeping them coming back. As a part of revenue cycle management, remember that patients are at the core of all the steps you’ll take. The goal is to bring them into the practice and to keep them returning to your providers for improved value over time.

Invoice Patients Promptly

Finally, ensure you are always invoicing patients promptly when you receive the reimbursement from their insurance provider. Automating billing can help with this process. If there is a difference between the reimbursement and the original cost of the procedure, that cost should be passed onto the patient. Reach out early, and discuss potential solutions if the cost is more than the patient can handle. Payment plans are just one option you may want to have ready to help if a patient asks for more information.

Build a Better Patient Experience With Podium

Revenue cycle management is a normal part of running a healthcare organization, whether you’re running a hospital, family practice facility, or other kind of clinic. From handling patient intake to correctly coding medical billing and claims, the way you handle RCM can make or break your patient relationships.

Podium is a convenient way to manage patient communications, reviews, and billing. From finding new patients to communicating about upcoming appointments or billing requests, Podium helps streamline your operations. Watch a demo.