Many complex elements dictate how payments are processed within the healthcare industry. Wrapping your head around Revenue Cycle Management can be an overwhelming task, but it’s one that we’re here to help!
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There is a multitude of complex elements that dictate how payments are processed within the healthcare industry. Wrapping your head around how each of these works can be an overwhelming task, but it’s one that we’re here to help with! Revenue Cycle Management (RCM) refers to the process of tracking a patient’s experience within a healthcare business, from their pre-appointment registration through to the payment of a balance. RCM usually utilizes medical billing software, which uploads and analyzes relevant data. This information includes basic details, like the patient’s name, address, age, medical history, and insurance provider, as well as the details of the specific service or treatment that they received.
The actual revenue cycle process involves several different important steps that we will explain in-depth in a little while. Having an understanding of how each of these processes occurs will allow you to not only maximize your business operations, but also improve patient relations. Further, we understand that healthcare businesses will have their own personal preferences regarding how finances are managed, including offering online payments, using billing software, or being a value-based care business. Regardless of these differences, we believe having a full understanding of how RCM works will be greatly beneficial to both you and your patients.
As you know, medical billing is complicated. Unlike most other industries, in healthcare, the patient is required to pay for their service after they have received it. This is due to a variety of reasons, but especially because healthcare is such a fluid and unpredictable industry. The role of a medical biller is to determine the right amount to charge a patient, based on the services they received and their insurance policy. This information leads to the production of a medical claim, which is sent to the payer, who may be either the patient or an insurance provider. Given the complexity of this process, different factors can contribute to a more effective claims process:
Implement regular training programs for staff to ensure every employee is equipped with the necessary information and your practice is completing HIPAA compliant medical billing processes.
Unfortunately, the number of denied claims has been steadily increasing in the US health industry. Unlike a rejected claim which is based on easy-to-fix errors, a denial is a claim that has been deemed unpayable by the insurance company due to wider issues. Although denied claims can be fixed, resubmitted, and successfully processed, they cause a massive delay in the cash flow for healthcare practices, leading to various problems. One of the best ways to avoid denials is to familiarize yourself with some of the most common reasons why they occur, including the following.
Different insurers will require pre-authorization for certain procedures, and you must be aware of these before delivering services to a patient. Whilst retroactive certification or authorization is possible, it is significantly easier to receive it before the procedure.
This is an easy issue to avoid, but unfortunately, it still occurs significantly frequently. To ensure you don’t miss a deadline for claim submission, you should have calendar alerts reminding you of when each claim is due. It is a good idea to get in the habit of submitting claims as soon as possible to avoid missing the deadline.
In order for a procedure to be reimbursed, the insurer needs to determine that it was medically necessary. Whilst this can be a difficult issue to solve, it highlights the importance of maintaining good documentation and communication throughout the healthcare process.
Different insurance networks can change annually, so it is a good idea to stay on top of these alterations. To ensure that your patient’s insurance provider belongs to the network your practice uses, you should collect this information before their appointment.
As you can tell, there are a variety of complex elements that are involved in perfecting the payment process for healthcare businesses. With Revenue Cycle Management, these processes can be streamlined, leading to a variety of different benefits for both practitioners and patients.
At the end of the day, delivering high-quality healthcare services to patients isn’t enough to keep you in business; you also have to be successfully managing your finances. To do this, you must have a thorough understanding of each step involved with revenue cycle management.
RCM software or outsourcing processing
The first decision your practice will have to make is whether it will outsource its payment processing or use a specific software. This decision will largely be based on the size of your business, and the growth you are expecting to see. Managing payments internally can take a lot of time and resources, especially for larger businesses, so looking into outsourcing options might be a good idea.
Pre-authorization refers to whether or not a healthcare insurance provider deems services or procedures to be medically necessary. As the healthcare provider, you need to determine pre-authorization for all of your patients before delivering any services, to ensure you will receive reimbursement for this work.
Eligibility & benefits verification
Different patients will apply for certain benefits, and it is your responsibility as the healthcare provider to determine the eligibility of these. If your clientele is small, checking eligibility and benefits over the phone can be achievable, but there are also specific RCM software that can run this process for you, saving a significant amount of time.
Submitting claims is a necessary requirement in order for your business to receive reimbursement. Whilst submitting claims manually is possible, we would highly recommend utilizing practice management software. These systems automate the process, minimize the risk of errors, and ensure that every single claim is submitted prior to the deadline. Streamlining the claims submission process helps to reduce the likelihood of claim rejections and denials.
Payment posting occurs after a claim has been successfully submitted, and it allows patients to finally pay for the services they received. Features of RCM help to streamline this step and improve patient collection by generating billing statements, automating messages to send to patients, and offering the option for online payments.
We covered quite a bit about how to successfully manage claim denials, and we just want to emphasize here how important it is for you to have specific processes in place to mitigate these occurrences. Focusing on denial management can provide valuable insight into the specific areas that require improvement, leading to increased reimbursement rates and fewer overall denials.
Generating thorough reports that detail your revenue cycle management is a critical component of successfully working through your finances. RCM software will provide your practice with tools that automate these reports and ensure they are as thorough and detailed as possible.
Understanding the revenue cycle in healthcare is complicated, and can be both stressful and overwhelming. Nevertheless, it is absolutely essential that you and your employees are familiar with how these processes can be optimized. Revenue cycle management is a great way to minimize the risk of claim denials, whilst boosting the efficiency of your processes and streamlining otherwise time-consuming tasks.