Revenue cycle management (RCM) is a critical process in the US healthcare system that helps every healthcare provider to be paid for the services it provided. It encompasses the activities of a healthcare setup right from patient registration to payment reconciliation. Every healthcare facility needs an efficient RCM process to maintain its financial viability and thereby offer quality healthcare to its patients.
Why RCM Process?
RCM process involving various aspects such as medical coding, medical billing, collections, and data analytics aids in the efficient running of a healthcare facility leading to better financial outcomes and improved patient care. Poor billing practices in a healthcare facility can lead to monetary losses resulting in a potential decline in the quality of care being provided; thus, it becomes critical for every healthcare facility to have a robust RCM process in place.
An effective RCM process ensures that right from the moment a patient comes to a facility for initial inquiry to the time when the final payment is received, the patient interaction is managed competently. The various aspects of the RCM process ensure that all the essential and appropriate information is collected and documented accurately aiding in billing only those services that are provided. Further, the RCM process enables contacting the payers or patients timely and collecting the due payments promptly avoiding denials and bad debts. After all, nobody likes bad debts and losses.
However, revenue cycle management involves multiple and complex patient interactions and mismanagement of any of these interactions can adversely affect the patient and clinical satisfaction scores damaging the reputation of a facility, halting its growth, and creating uncertainty for its financial performance. This is the reason every healthcare facility, irrespective of its size or health system, must prioritize revenue cycle management and revenue collection.
Steps of the RCM Process
- Preregistration: This is the first and most crucial step of the RCM process that allows a healthcare facility to collect important patient information including demographic data, insurance information, and eligibility for insurance. This step helps the facility check the patient’s insurance coverage, deductibles, co-insurance, and co-payments.
- Registration: This step further strengthens the aspect of collecting accurate information from the patient. The patient’s details such as phone number, address, date of birth, and insurance details are verified every time a patient is provided treatment regardless of whether the patient is new or established. This step, if performed diligently, can help avoid many issues at later stages.
- Charge capture: This is the step where medical services provided are transformed into billable charges. Accurate documentation of every service plays a critical role since these need to be submitted for payment from patients or insurance providers.
- Claim submission: In this step, information is sent to the insurance payer after entering the charges where it will be verified if the diagnosis and procedure performed are aligned.
- Remittance processing: This step involves applying or rejecting payments where allowable and write-offs are determined.
- Insurance follow-up: This is the step where the healthcare facility analyses the paid and unpaid amounts through the accounts receivables report.
- Patient collections: This is one of the toughest parts of the whole revenue cycle process where patient balances are determined and the amounts are collected from the patients.
A healthcare facility gets paid for the services delivered only when all these steps are performed diligently and accurately. Thus, the RCM process aligns the clinical care aspects with the business aspects and helps the healthcare facility function efficiently and successfully.
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