Hospitals and other healthcare facilities play a critical role in saving lives, treating and reassuring patients. The backbone of any healthcare facility is its effectiveness in financial management.
A healthy financial policy reassures the patients that all their payment is received and processed to ensure accountability. An efficient claim processing procedure guarantees healthcare facilities that all administrative functions, clinical systems generate income as expected.
What is Healthcare Revenue Cycle Management?
Revenue Cycle Management (RCM) system tracks revenue for services obtained from a health facility using medical billing software. It captures all payments from the initial doctor’s appointment to the final settlement of their hospital dues.
The revenue cycle management starts when a patient secures an appointment at a facility and ends when the hospital gets reimbursed for all services rendered. The revenue cycle is a repetitive and complex process.
Steps in Revenue Cycle Management System
The healthcare revenue management cycle has seven stages. These stages are:
- Pre-registration- patients give their pre-registration details, such as the insurance coverage provider. This happens before a patient arrives for either inpatient or outpatient procedure and confirms eligibility by the insurer.
- Registration- The patient provides personal information to track past medical record numbers to establish if the client meets clinical and financial requirements.
- Charge capture- and coding- Involves converting medical services into billable charges according to the hospital’s fee regulations.
- Submission of the claims- Claim submission refers to submitting the claims to the insurance provider in question.
- Remittance processing and coding- This stage involves applying or rejecting payments by the insurer through remittance processing.
- Insurance provider follow-up– involves collecting payment for medical services rendered to clients from a third-party insurer.
- Patience collections and clearance– involves determining a patient’s balances and collecting payments for services rendered.
Why Invest In Healthcare Revenue Cycle Management System?
- Enhanced patient experience
An effective RCM streamlines the running of a healthcare facility. It reduces the workload of the administrative organs by eliminating redundant processes and simplifying complex tasks.
Working with automated systems ensures each patient journey through the hospital touchpoint is smooth and payments settled by the relevant insurer. Consequently, the hospital staff concentrates on providing the best care to the patients by providing efficient services.
- Relieves administrative of mundane activities
Outsourcing an automated revenue cycle management system allows a hospital to reassign new roles to its staff.
Maintaining hospital finances includes registration, billing, coding, claim preparation, and These activities are tedious. However, an automated RCM allows more time for the staff to focus on other duties to enhance patient outcomes.
- Eliminates human errors and redundancy
Often, hospital facilities running manual billing make provision for human error. A slight mistake can cause wastage and losses within the facility.
However, outsourcing RCM services from a reputable provider guarantee the hospital that medical billing and coding services are free from errors and redundancy. Therefore, the health facility maximizes all the revenue collected to enhance the healthcare services it provides.
- The reduced claim denial rate
Using automated RCM reduces error and redundancy. Therefore, very few payment claims are denied by the insurer. Therefore, the hospital gets timely payment for services rendered.
- Simplified payment processes
The automation of revenue cycle management simplifies the hospital payment process. Typically, the pre-registration and registration process occurs at the front desk, where patients start their treatment process. The payment process then moves to the back office, where coding, billing, claims, and follow-up with third parties continue.
When used along with Electronic Health Record System, RCM improves all the stages to deliver timely payment to the hospital facility. Efficient systems ensure a smooth billing process, thus increasing the revenue collected.
- Maximizes revenue collection
A reliable healthcare facility is keen to provide consistent, high-quality services to all its clients. Obtaining top-notch healthcare services can only happen if the hospital cost-effectively collects all revenue.
Automated RCM helps the staff handle all the incumbent tasks and other pending tasks such as payment denials and third-party follow-ups. Using an effective system ensures timely service delivery and reimbursement.
And because of reduced human error, accuracy is enhanced. Thus, revenue collected also improves.
Insurance verification takes less time than manual procedures when an automated RCM works together with software applications and relevant tools like coding. Insurance verification takes less time than manual procedures. A highly automated, optimized workflow results in maximized revenue collection.
- Enhanced collection process
Automated revenue collection process enhances service delivery to patients. Typically, it’s the responsibility of the administrative workforce to feed patients’ demographics, send reminders and follow-up claims from third parties and make charge entries.
However, an automated RCM system enhances efficiency in revenue collection. The turn-around time for an individual patient is significantly reduced, thus allowing the hospital to serve many clients per time.
Efficiency is possible because bills are ready in less time, and claim submission time improves revenue collection.
- Improved visibility
A significant benefit of using RCM has enhanced visibility. An automated RCM process examines data and identifies problems. The administrative staff can isolate the problem raised and resolve them immediately.
- Provides tangible value
A hospital is an institution with many shareholders like donors, investors, and other strategic partners. Each of the shareholders attaches their input to the strength and performance of the healthcare facility they co-own.
An automated RCM provides instant data necessary for evaluation and evidence for excellent performance. The system can also give data required for strategic management and decision-making. Ultimately, RCM aligns the organization’s goals with stakeholders for mutual excellence.
- Enhanced communication
An automated RCM system enhances communication between patients and the administrative staff. Payments details can be sent and received through email and text messages on smart devices.
These platforms can accommodate a direct link to authorized payment portals via interchange tools. This enhances a patient’s experience, especially when combined with an individual’s health record and financial management tools.
Healthcare Revenue Cycle management reduces redundancy, human errors and promotes efficiency towards improved revenue collection. It reduces wastage of resources in claim submissions, leaving data professionals to maximize revenue.