06 Jul Revenue Cycle Management: End-to-End Best Practices
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What exactly is Revenue Cycle Management (RCM)?
The Long Answer
RCM is the process by which a healthcare organization submits and receives payment for medical services performed.
But between the “submits” and the “receives payment” part, there are a lot of steps that have to be completed to exacting specifications with comprehensive documentation in order to create a clean claim that avoids a denial.
The Short Answer
RCM billing services are the lifeblood of a practice’s bottom line, and should be handled by professionals with deep knowledge of the best practices and procedures for every step in the RCM process.
Here’s a look at each one of those steps and the documentation required.
Steps #1 through #11 should make it clear why step #12 is the only one to take next.
The revenue cycle begins when a patient seeks medical services. During the registration process, the patient’s demographic and insurance information is collected. This step involves verifying the patient’s insurance coverage, determining eligibility, and gathering necessary documentation.
If certain procedures or services require pre-authorization from insurance companies, the healthcare provider initiates the pre-authorization process. This involves submitting documentation and obtaining approval from the insurance company before the services are rendered.
After the patient receives medical services, the charge capture phase begins. It involves documenting the services provided, including procedures, treatments, medications, and supplies. Accurate and detailed documentation is essential for proper billing and coding.
In this step, trained medical coders review the documentation and assign appropriate diagnostic and procedure codes based on coding guidelines, such as ICD and CPT manuals. The coded information describes the patient’s condition and the services provided.
Once the medical coding is complete, the medical billers use the coded information to prepare claims. The claims include itemized lists of services rendered, along with the corresponding codes. The claims are then submitted to the appropriate payers, such as insurance companies or government programs, electronically or through paper submission.
After the claims are submitted, the insurance companies or payers review them for accuracy and compliance with their policies. This process is called claim adjudication. The payer determines the amount they will reimburse for each service based on the patient’s insurance plan, deductibles, co-pays, and coverage limitations.
Once the claims are adjudicated, the healthcare provider receives payment from the insurance companies or payers. The payment is posted to the patient’s account in the provider’s system, reflecting the amount received and the remaining balance.
In some cases, claims may be denied due to errors, missing information, or coverage limitations. Denial management involves investigating and resolving claim denials by providing additional documentation, correcting errors, or appealing the decision. This step aims to maximize reimbursement and minimize revenue loss.
If there is a patient responsibility portion, such as co-pays, deductibles, or services not covered by insurance, the patient is billed for the remaining balance. The patient receives an invoice or statement detailing the services provided, the amount due, and any outstanding balances.
The final step involves collecting payments from patients. This can include various methods such as cash, credit cards, checks, or payment plans. The provider’s staff may follow up with patients to ensure timely payment and handle any inquiries or disputes.
Throughout the revenue cycle, accounts receivable management is critical. It involves tracking outstanding payments, monitoring aging accounts, and following up on unpaid claims or patient.