A car engine can't run without fuel; similarly, healthcare facilities can’t operate without healthy finances. No matter how excellent your providers and medical personnel perform, it won't be easy to maintain the superior standard you have built without paying close attention to your finances.
Understanding healthcare Revenue Cycle Management and what it entails is a significant step in the right direction in maintaining strong finances in your facility. Financial leaks often come from the inability of healthcare administrators to manage the facilities' healthcare revenue cycle effectively.
Revenue Cycle Management (RCM) is the financial process healthcare facilities use to track patients' medical procedures and payment information from registration to scheduling and final patient invoices.
Revenue Cycle Management requires a unification of the clinical and business branches of healthcare by using administrative data (such as patients' personal information and insurance details) alongside the healthcare service provided to the patient.
RCM may not be complex, but it is a process that passes through different hospital departments, and it needs to be effectively carried out for the numerous patients in your healthcare facility daily.
Therefore, breaking down RCM into bits is necessary to have a firmer grip and control on your revenue cycle. Simplifying this process will also make it easy to quickly assess, track and correct revenue leakages within your facility.
Depending on the structure of your facility, the first thing to do is to choose a suitable RCM approach. You can either outsource the process to third-party software or use RCM software.
An average billing office is provided with 2.7 billing staff per physician by the Medical Group Management Association (MGMA). Over 7% of a practice's total revenue is spent on revenue cycle management and medical billing because of this staffing size.
After choosing the RCM approach you want to take, it Is necessary to train your staff on the methods and processes involved.
This allows every team member to understand what is expected of them and reduces human error and mistakes while carrying out the process.
Before patients get enrolled into the system and get an appointment/schedule, their basic information like; name, medical history, insurance details, payment mode should be collected.
Pre-registration usually occurs before the patient's first visit to the hospital. It saves time for the patient and creates preparedness for both the provider and patient on what is expected.
Since payment information is communicated to patients in this phase, you can expect your prospective patient to pay on time and avoid unnecessary debt.
This is the phase where all data collected during pre-registration are cross-checked against the filled registration to clarify any errors or mix-ups. Errors detected should be brought to the patient for correction before it escalates. Most times, errors in patient data cause long delays when you want to receive reimbursements from payers.
Verification of patient benefits from the insurance companies is another step to be taken to confirm the limits to your patient's insurance benefits. This can be a tedious process for your insurance staff, especially if it is done over the phone.
However, the RCM software solution will automate the verification process through secure internet channels.
Pre-authorization is a decision made by the insurance company concerning the medical necessity of a prescription, medical procedure, equipment, or service a provider intends to use on a patient. The pre-authorization process may not be carried out on patients brought in an emergency.
Pre-authorization doesn't mean a plan will cover the insurance cost; you still need to clarify any doubt you might have about your patient's insurance coverage.
This step involves providers taking an inventory of the medical services they render to the patients and sending them to the insurance companies. Taking this step enables your facility to receive total compensation from the insurance companies.
Before commencing service rendering to patients, the patients should be required to pay their deductible and copayments.
Hospitals' wide range of health services makes it necessary to use medical codes to translate service descriptions, processes, items, and individual requirements into numeric or alphanumeric codes.
This process is known as medical coding. Medical coding is used internally to create a map for various processes.
Medical billers majorly use codes to prepare insurance claims for patients and providers.
Preparation and submission of claims are among the most critical steps in revenue cycle management. The revenue cycle team should carefully prepare claims and make sure it is error-free to avoid unnecessary delays in payments.
To get faster reimbursements, the team should conduct claim scrubbing. Claim scrubbing ensures that your claims are clean and pass the correct channels into the insurance panel.
The process includes sending claims from your management system to a clearinghouse. The clearinghouse takes in the claims and sends them to different payers.
Reimbursed claims are sent to the patient after the insurance company concludes all formalities and necessary verification.
It is important to note that not all claims get reimbursed; therefore, you should prepare for denial management. Denial management involves reviewing and correcting allegations that are not returned.
Similarly, a review should be done immediately if the amount claimed differs from the amount reimbursed.
Any amount eventually left unpaid by the insurance plan should be directly billed to the patient.
Without detailed reports, you cannot effectively identify or track revenue leaks in your RCM process. Losses can be detected and prevented if your accounting and process reporting system must be functional.
Using RCM software can help your team avoid the hassles and errors associated with manual reporting. RCM software will automatically generate real-time reports, thereby enhancing your team's productivity.
Incident reporting improves safety for all healthcare participants. The main reason incident reporting exists is to ensure that everyone interacting with the healthcare facility (patients, staff, community, and facility) can live in a safe environment.