Revenue cycle management (RCM) is the financial procedure that healthcare institutions employ to track patient care events from registration and scheduling appointments to the final payment of a balance, and it makes use of medical billing software.
How does RCM Apply to Healthcare?
Revenue cycle management brings together the business and clinical elements of healthcare by connecting administrative data, such as a patient’s name, insurance provider, and other private details, with patient care and their healthcare data.
Likewise, RCM’s relationship with health insurance providers is crucial. The hospital or doctor’s office staff will typically check the patient’s stated insurance coverage before the visit.
From there, a healthcare professional or coder classifies the type of treatment offered. When a patient receives treatment for a certain condition or disease, relevant ICD-10 codes are reported with the insurance company. This guarantees they are charged for the appropriate care and enables the patient to eventually pay any required copays. Your practice can benefit from the coding and billing assistance of a trained medical coder and/or biller from MedCore. After the hospital or care facility sends the patient’s insurance company a summary of care with ICD and Current Procedural Technology codes, the patient is then charged for any additional expenses. This also helps determine what percentage of the patient’s care is covered by insurance.
Purpose of Revenue Cycle Management
Furthermore, the Healthcare Financial Management Association (HFMA) defines the revenue cycle as the sum of all administrative and clinical tasks involved in the identification, control, and collection of patient service revenue.
Moreover, in healthcare an efficient RCM process guarantees that every interaction with a patient is managed efficiently. This starts from the first question to the last payment. What does this mean? Essentially, reliable data is acquired and documented, patients are only billed for the services actually provided, third-party payers are immediately notified, and payments are collected.
Key Components of the Revenue Cycle
The revenue cycle serves the following functions:
- Charge capture: The conversion of medical services into reimbursable costs.
- Submitting claims to insurance carriers for chargeable expenses.
- Diagnoses and procedures must be correctly coded.
- Determine patient balances and collect payments for patients.
- Before a patient comes for inpatient or outpatient procedures, preregistration information is gathered, such as their insurance coverage.
- Gathering more patient information during registration to create a medical record number and satisfy different regulatory, financial, and clinical obligations.
- Application of or rejection of payments made through remittance processing.
- Getting money from third-party insurers by following up with them.
- Utilization review: Analyzing the need for medical services.
Giving patients excellent care is frequently the top priority in medical settings. To make sure a hospital or medical practice can continue to provide such treatment for years to come, it’s crucial to pay attention to the financial resilience of the organization.
While dealing with yearly increases in administrative and service delivery costs, doctors are always challenged to provide patients with affordable treatment. Profitability can be considerably impacted by preventing and minimizing unpaid claims, increasing point-of-service collections, keeping healthy accounts receivable, and correcting ineffective coding and billing procedures.
While this process may seem extremely complex, MedCore can help simplify this process for your practice. MedCore’s certified medical coders and billers can help reduce any billing or coding errors and make sure that the RCM is running smoothly.
References
Health IT. (2017, February 28). What is Revenue Cycle Management (RCM)?: Definition from TechTarget. Retrieved from https://www.techtarget.com/searchhealthit/definition/revenue-cycle-management-RCM
MedCore Solutions. Medical billers. (2023, April 25). Retrieved from https://medcoresolutions.com/medical-billers/
R1 RCM. (2020, May 8). What is revenue cycle management in healthcare?. R1 RCM – Revenue Cycle Management Company. Retrieved from https://www.r1rcm.com/news/what-is-revenue-cycle-management-in-healthcare