An End-to-End Approach to Revenue Cycle Management

Your practice exists to help people. But without a steady, organized influx of income, you can’t stay afloat long enough to make a difference.

That’s where Revenue Cycle Management (RCM) comes in. RCM simplifies and strengthens revenue collection while keeping patient satisfaction rates high.

With that in mind, efficient RCM is essential to the financial health of medical practices.​ Without an effective approach to RCM, you’ll spend more time chasing payments and less time with your patients.

The Fundamentals of Revenue Cycle Management (RCM)🔗

So, what is RCM in medical billing?

Revenue Cycle Management (RCM) is the process of submitting and obtaining payment for medical services performed. RCM in medical billing spans from when a patient schedules their appointment to the moment you receive the funds, whether they come from an insurance provider, the patient, or another source.

There are three key RCM phases:

• Order to Intake – This “pre-service” stage ensures patients are eligible and financially ready.
• Care to Claim – This phase follows patient care and involves capturing, coding, and submitting claims.
• Claim to Payment – The final stage includes the management of payments, denials, and revenue reconciliation.

Each phase contains several steps that must be completed to exacting specifications. As such, RCM billing services are the lifeblood of a practice’s bottom line. These solutions streamline the revenue cycle from start to finish.

Billing services should be handled by professionals with deep knowledge of the best practices and procedures for every step in the RCM process.

Key Steps in the Revenue Cycle Management Process🔗

If you want to stay solvent, organized, and compliant, understanding the entire RCM process is a must. With that in mind, we’ve outlined the steps below.

1. Patient Scheduling and Registration🔗

The revenue cycle begins when a patient first seeks medical services. During registration, the patient’s demographic and insurance information is collected.

This part of the process also includes:

• Verifying the patient’s insurance coverage
• Determining eligibility
• Calculating copays and deductibles
• Gathering necessary documentation

2. Pre-Authorization🔗

When procedures or services require authorization from insurance companies, your practice is responsible for securing insurance approval. Always submit documentation and obtain approval from the insurance company before rendering services.

Missing pre-authorization can lead to claim denials, so this step is vital.

3. Charge Capture🔗

Once your patient receives medical services, the second phase (Care to Claim) begins. Charge capture involves documenting the services provided, including:

• Procedures
• Treatments
• Medications
• Supplies

Accurate documentation is essential for proper billing and coding. As such, be sure to record all details carefully.

4. Medical Coding🔗

In this step, trained medical coders review your submitted documents and assign appropriate diagnostic and procedure codes based on coding guidelines. Depending on the service, they may convert your submission into standardized medical codes, such as ICD, CPT, or HCPCS.

For compliance purposes, it’s important to avoid errors like upcoding (billing for more expensive services) and downcoding (minimizing a service.

5. Claim Submission🔗

When the coding is complete, medical billers use the coded information to prepare claims. The claims include itemized lists of services rendered and the corresponding codes.

Claims are then submitted to the appropriate payers, such as insurance companies or government programs, electronically or via paper submission.

6. Claim Adjudication🔗

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 outcome of the claim based on the patient’s insurance plan, deductibles, copays, and coverage limitations. Potential claim adjudication outcomes are:

• Full payment
• Partial payment
• Denial (due to errors or non-covered services)

7. Payment Posting🔗

Once the claims are adjudicated, the healthcare provider receives payment from the insurance companies or payers. Payment is posted to the patient’s account in the provider’s system, reflecting the amount received and the remaining balance. Remaining balances become the patient’s responsibility.

8. Denial Appeals & Management🔗

In some cases, claims may be denied due to errors, missing information, or coverage limitations. At this point, the third stage (Claim to Payment) begins.

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.

9. Patient Billing🔗

If there is a patient responsibility portion, such as copays, 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.

10. Payment Collection🔗

The final step of the process involves collecting funds from patients via various payment methods, such as:

• Cash
• Credit cards
• Checks
• Online billing platforms
• Payment plans

Clear communication can improve collection rates. With that in mind, your staff may need to follow up with patients to ensure timely payment, handle inquiries, and resolve disputes.

11. Accounts Receivable (A/R) Management🔗

As an ongoing “step” outside the three phases of RCM, A/R management involves tracking outstanding claims and payments. Throughout the revenue cycle, accounts receivable management is critical, as it maximizes revenue collection.

Automated A/R processes can help you monitor aging accounts and follow up on unpaid balances.

Challenges in Revenue Cycle Management🔗

With so many steps to keep track of, RCM can be challenging, especially for smaller practices. Understanding the most common challenges can help you avoid them.

Some of the obstacles that medical providers face in managing their revenue cycle include:

• Claim denials – A denied claim leaves your patient without reimbursement. Denials can lead to difficult conversations with frustrated patients and cash flow issues.
• Coding errors – Even though medical coders are trained to convert procedures into industry-standard codes, mistakes can happen on either side of the process.
• Delayed payments – For various reasons, insurance companies delay payments. While delays aren’t as problematic as flat-out denials, they can still trigger revenue issues for your practice.
• Regulatory changes – Medical regulations are constantly changing, and keeping up with them is no easy feat. However, regulatory compliance is necessary. Unfortunately, mistakes caused by shifting policies can slow processes and lead to denied or delayed payments.

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Strategies for Effective RCM🔗

Practices of all sizes need practical strategies to rise above these challenges. Thankfully, there are several ways to improve your RCM.

First and foremost, consider investing in robust billing software, automation, and AI solutions. The right technology can save your team countless hours and help eliminate user errors.

With that extra time, you can conduct regular staff training on coding and billing practices. Regular employee updates help keep human mistakes to a minimum. To monitor how your team is implementing new strategies, you can measure key performance indicators (KPIs) like:

• Net collection rate
• Cost to collect
• Days in Accounts Receivable
• Claim denial rate

Finally, you may find it worthwhile to engage patients in the billing process. An educated patient is less likely to ask questions or miss payments.

Optimize Your RCM With Medusind🔗

Overall, RCM is crucial to running a successful practice. With proper RCM strategies in place, you can minimize your revenue loss and maximize patient satisfaction, all while saving your staff time.

If you need assistance implementing or improving RCM strategies, outsourcing your billing to Medusind may be the perfect solution. Our medical billing services streamline every step of the RCM process, ensuring you can focus on serving your patients—not on your financial health.