Revenue cycle management (RCM) is the management of finances, a crucial process that keeps an organization going on a daily basis. Medical billing plays a major role in the efficient functioning of the RCM process and thus the healthcare facility. If facilities do not focus on their financials they would be floundering no matter how excellent their patient care would be. Without an effective revenue cycle management process, healthcare facilities cannot sustain their functions and treat patients.
What is healthcare RCM?
Healthcare RCM is the financial process of healthcare facilities that is used to manage various administrative and clinical functions related to medical billing viz. claims processing, payments, and revenue collection. The process begins from the moment a patient seeks medical services with an appointment and ends when all payments associated with the services provided to a patient are collected either in the form of insurance claims or patient payments. The process can be performed with in-house employees or can be outsourced to RCM services providers.
A key aspect of the RCM process is that RCM services professionals unify the commercial and clinical aspects of a healthcare facility by collating the administrative data along with the personal information of a patient with that of the details of the treatment the patient receives. Another key aspect of revenue cycle management is communication with insurance companies that is carried out by RCM services providers or the in-house medical billing employees. Every time a patient visits a healthcare facility and asks for an appointment, the hospital staff or the RCM services professionals communicate with the insurance providers and cross-check the insurance coverage of the patient before providing the services. Thereafter, upon providing the services, they categorize the services according to the ICD – 10 and CPT code sets and sends them to the insurance companies as insurance claims for reimbursement of the costs incurred on the services provided to the patient. In cases, where the insurance coverage is not sufficient, the patient is billed for the remaining amount.
There are numerous factors that affect a healthcare organization’s revenue cycle management. These include –
- Accurate patient information – all the relevant patient information needs to be collected at the time of registration and before providing services.
- Utilization review – the necessity of medical services has to be reviewed and determined.
- Applying codes – accurate codes have to be applied to all the services provided including diagnoses and procedures performed.
- Charge capture – all medical services need to be rendered into billable charges.
- Claim submission – appropriate and timely claims for the services rendered have to be submitted to the insurance providers.
- Insurance collections –amount receivable from the insurance providers has to be collected.
- Patient collections –balance amount has to be determined and collected from the patients.
Every healthcare organization has to deal with all these influencing factors and a healthcare facility can have control over the internal influencing factors like providing a good patient experience, the productivity of the employees and fee collected, etc. However, it cannot exert control on external factors like insurance companies’ claim reviews and patient collections. Hence, it is essential that every healthcare facility has a robust revenue cycle management process in place.