What are the key steps in Revenue Cycle Management?

Steering the revenue cycle towards successful healthcare organizations helps enhance your practice’s overall fiscal responsibility, ensuring collections occur promptly so that doctors can concentrate on patient care. Accordingly, your organization and health system must have an acute understanding of revenue cycle management processes to recognize the challenges facing their practices and address them effectively. In this article, I will present 11 important steps for managing a revenue cycle that can help staff streamline their operational procedures to aid in getting value-based reimbursements.

Significant Steps in Revenue Cycle Management

In case you want to know how the system works, healthcare revenue cycle management has a bunch of functions that can help you understand it better. Here are the key steps in Revenue Cycle Management that are vital for enhancing efficiency and financial performance:

1. Deploying a cloud-based and transparent RCM model

According to federal health care authorities, the No Surprises Act and Price Transparency laws require health systems to enhance patient experience through greater transparency on pricing and RCM billing results. The transparency mandates in these rules require medical providers to engage in transparent discussions with patients, who must also know beforehand what they are getting into before choosing any treatment option.

For these reasons, it is essential to select an appropriate revenue cycle management (RCM) system that comprises practice management software for your healthcare organization.

2. Train your staff

After the latest version of the practice management system has been put into place in your organization, the realignment of the staff is what should be your main concern. This is the 2nd most important step in Revenue Cycle Management (RCM), where one has to periodically train employees so that they can become fully acquainted with the system, just as they are good at dealing with finances since they do ground-level RCM. Delegate all aspects of practice management to a partner who specializes in this area so that it aligns with your current RCM software, and make sure there are some internal staff members you select who can communicate with them.

3. Patient scheduling

Patient scheduling is a crucial component of revenue cycle management, directly impacting the efficiency and profitability of a healthcare practice. Effective patient scheduling ensures that appointments are managed efficiently, reducing no-shows and optimizing the utilization of medical staff and resources. Self-scheduling can maximize patient satisfaction because doctors will no longer have to spend hours sitting behind the desk to book appointments for their clients but will rather deal with them.

4. Patient Registration

The subsequent stage in revenue cycle management is to gather patient demographic data accurately after confirming their identity. Any modifications in insurance cards must be diligently updated. Suppose this first touchpoints procedure is carried out inaccurately. In that case, it will result in a chain of unresolved problems, including disgruntled patients who might opt out of seeking treatment with such overcrowded staff.

5. Patient's EOB and insurance verification

The crucial and most important part of revenue cycle management is the Patient’s Explanation of Benefits. In this process, you receive EOB documents that show how your insurance carrier processes claims for services provided. In practice management, you have to confirm the following information:

Services provided by the physician.
Charges by the hospital for services rendered; these charges also include medical instruments used in carrying out medical procedures.
In what treatment category is the patient eligible for compensation from an insurance carrier?
What your insurance carrier agreed to pay?
Copayment.

If there are any inconsistencies during the verification process, it is necessary to contact the patient beforehand to maintain transparency. Additionally, it’s important to revise insurance coverage plans so that patients do not end up making out-of-pocket payments.

6. Copayment collection and deductibles

The patient must pay a fixed charge upfront before receiving medical care, which is known as a copayment or co-pay. Additionally, if the insured’s expenses surpass a certain limit, he will need to pay a flat amount, which is called a deductible. The responsibility of the revenue cycle management team is to collect all copayments before these procedures can take place, hence, during their appointments. Reimbursement specialists suggest collecting cash at the beginning of every visit rather than including it in the check-out process. After patients leave the room, recovering due to bills becomes harder and costlier.

7. Charge entry and capture coding

Accurate charge entry and capture coding are vital steps in Revenue Cycle Management. It refers to a stage in RCM where physicians convert their services into billing charges. Attaching procedural medical codes to the claim is considered a crucial step in the revenue cycle. Any wrong move here can result in reimbursement claims being denied.

Quality medical billing and coding will simplify charge capture since workers can use coding tools to achieve accurate coding that makes timely payments possible.

8. Claim scrubbing, submission, and processing

Managing claim processes creates a revenue cycle workforce that is responsible for looking up claims, managing charges, and analyzing medical procedures. Concerning healthcare procedural coding implications. Electronic medical billing and coding software often performs this task. Before an appropriate insurance company receives a claim, the software processes it through the scrubbing stage. Where it prepares its own review of the submission document and ensures its cleanliness and correctness. The scrubbing process involves running a claim through an algorithm. This detects duplicate charges, typos, unreadable content, or erroneous information and confirms all CPT codes have been correctly specified.

9. Claim Denial management

Claim denial management is a very important aspect of revenue cycle management (RCM) that aims to identify, analyze, and resolve denied claims so that insurers can maximize reimbursement. Once a claim has been submitted, it can either be accepted or denied and also consequently paid for. If information is missing, coding mistakes are made, or there are coverage problems, it will result in denial.

The dedicated denial management team investigates these cases, comes up with the underlying cause, corrects the errors, and then resubmits them into the system. Where necessary, they appeal against the rejection by providing further pieces of evidence. By keeping track of patterns of denial in the system, the team can put in place preventive measures against such instances hence maximizing revenue generation in a practice and maintaining its financial soundness.

10. Account receivable follow-up

Account receivable follow-up has to do with various complicated procedures. The revenue cycle management team actively tracks the prompt payments of accounts receivable.

The following collection includes certain procedures belonging under the umbrella of Account Receivable Management:

Identifying denied/unpaid claims
Re-filing the corrected claims
Minimizing AR days
Eliminating aged AR

11. Payment posting

The most important step in revenue cycle management is the payment posting. This stage entails visiting the financial picture of a medical practice and its payments. In addition, it also involves entering these payments into medical billing software. Moreover, it has the following phases:

Posting insurance information from EOBS and ERA: When health insurers process claims, they prepare an explanation of benefits (EOB). An EOB provides patient names, service dates, procedure codes, allowed/denied amounts, deductibles, and co-pays before issuing a payment check.

Claims Reimbursement: The Payer reimburses healthcare providers when a patient signs an assignment of benefits document; otherwise, the money goes to them.

12. Data analytics and reporting analysis

The revenue cycle management ends after the healthcare provider has obtained compensation from the insurance company for performing medical procedures and services. Failure to keep track of your medical practice’s revenue cycle management data implies that workflow processes will continue. But the efficiency will be highly artificial. Therefore, your healthcare organization must invest in machine learning applications for detailed data analytics. This helps to diagnose the problematic areas in medical methodology and optimize profit margins. By utilizing big data, organizations can gain insights into how each type of data analytics contributes significantly to the revenue cycle ecosystem. It enables them to optimize operational processes to reduce costs.

Conclusion

Healthcare organizations must learn the essential steps in Revenue Cycle Management (RCM) to stay financially stable and deliver the best services possible. Healthcare providers can accomplish this by implementing a transparent RCM system, training employees, simplifying patient registration and scheduling, and ensuring accurate coding and claim denial management. These strategies enhance healthcare providers’ financial operations. To further improve reimbursements and minimize administrative workload, healthcare providers use timely collections of copayments and effective denial management alongside strong data analytics that enable seamless revenue cycles. An effective RCM enables healthcare providers to devote their energies to offering high-quality care to patients without compromising their fiscal viability.