The revenue cycle has a significant impact on how successful healthcare organizations become. If your practice does not have a strong billing department, you could be losing a lot of money from patient payments and payer reimbursements, among other things. Understanding and executing excellent revenue cycle management is required if your company is to succeed. The steps of revenue cycle management are as follows.
Eligibility Verification and Pre-Authorization
During this step, you will collect insurance and financial information from your patient. Using automated eligibility verification devices can help you figure out how to get paid for various services. The patient benefits as well because they will immediately understand their financial obligations.
Services and Charge Capture
After services are rendered to patients, the next step in the revenue cycle management process is to have all services rendered transcribed into billable charges. This is accomplished through a process known as charge capture. This is an important step because it is at this point that a medical billing code is assigned to the claim. If you have enough medical billing software, your staff will be able to use coding tools that will allow everyone to code more precisely. This helps to ensure that reimbursement is received in a timely manner. Your claims will be coded more accurately thanks to claims scrubbing technology. As a result, you will save a lot of money on administrative costs and claim re-work.
Submission of Claims and Management of Denials
Following that, you must file a claim. Following the charge capture process, you must submit a properly coded claim to the payer. This step can be made more efficient by using practice management software, which allows you to track your claims in real time at any time of day. This allows you to stop claims before they are denied and ensures that you submit as many clean claims as possible.
After your patient’s insurance company has reviewed your claim, the cost is posted, and the patient should be prepared to pay. If you have an integrated billing solution, patients will be able to view and pay their bills through their patient portal. You can also have your solution remind patients when they have payments due and encourage them to do so. As a result, you will most likely receive more payments on time, and they will be paid in full. This step works best when quality collections services are provided by your revenue cycle management vendor.
Reporting of High Quality
Receiving payment from the patient is the final step in the revenue cycle management process. However, it is best for your practice to have adequate reporting technology because it will keep you on track and prevent you from making costly mistakes. It becomes easier for your practice to identify common problems in its revenue cycle management process that prevent it from generating as much revenue as it could. It is advantageous to have the right vendor or software because they can assist you in determining which trends are causing you to lose money.
Reasons Your Revenue Cycle Might Struggle
Hospitals have historically maintained healthy profit margins. However, what happens if those profit margins begin to shrink? While it is widely acknowledged that healthcare reform is required for U.S. hospitals, getting there is proving to be a significant challenge. Hospitals that are struggling with their margins face a slew of issues, including layoffs, difficulty hiring and retaining staff, and providing lower-quality care to patients. It’s not always easy to get out of situations like this, but if you don’t know where to start, certain factors may be affecting your revenue cycle. Here are some reasons why your revenue cycle may be struggling.
Recruiting RCM Staff Is Difficult
You won’t be able to focus on improving your revenue cycle if you don’t have the necessary staff. It can be difficult to find qualified candidates for these positions. You can increase your chances of recruiting them by offering sign-on bonuses and funds for those who continue their education and training. It is also a good idea to ensure a competent revenue cycle management (RCM) leadership team that values its employees.
A revenue cycle management team must learn a lot of things, such as the complexities of payer contracts. Meanwhile, the workload continues to grow, and it can appear to be insurmountable. Consider getting contract support or outsourcing services to a third-party company to alleviate some of the workload. While you will have to pay more money up front, you will find that it is a worthwhile investment if you find the right people.
The vast majority of hospitals will spend their innovation budgets to improve the quality of care they provide to their patients. While there is nothing wrong with this, revenue cycle management in technology and innovation departments can be overlooked. Fortunately, technology exists to assist this department. Hospitals will be able to significantly improve their RCM department with the right technology.
Pressures from Payers
Payers must also make significant efforts to transition to value-based care. As a result, they face similar challenges in navigating this new domain of care delivery. They also include new advanced technologies that detect problems faster. All of these factors combine to make contracts more complicated, which leads to more denials. This can be taxing on revenue cycle management teams.
How to Maximize Your Revenue Cycle
Today, effective revenue cycle management is critical for healthcare organizations. It is required for accepting payment methods, processing claims, and generating revenue. All too often, practices lose money because they do not take a proactive approach. There are several steps that businesses can take to make the most of their revenue cycles. Continue reading to learn how practices can improve their payment collection.
Consider Overhead Expenses
Each medical practice has its own set of fixed expenses. It is critical to recognize that certain aspects of the organization are nearly impossible to eliminate. Staff reduction may appear to be a logical step; however, it may increase infrastructure costs. At the end of the day, what matters is the return on investment. Allow the numbers to speak for themselves and calculate which moves will bring your organization the most revenue. You will then be able to make necessary adjustments.
Concentrate on Your Workflow
A successful medical practice maintains a consistent pace while prioritizing its work. Accounts should be organized by dollar amounts and dates by staff members. If your practice is not bringing in enough money, you may want to reconsider how it prioritizes its operations.
Determine the Root Causes of Denials
There could be a variety of reasons why you are not receiving payments. It is critical for an organization to identify the causes of denials in order to correct the situation. Common reasons for denials include duplicate claims, missing information, and charges that are not covered by the payer.
Is your company’s collection process well-defined? It is critical that you define terms clearly with your patients so that there are no grey areas. Many practices are redesigning their collection processes and moving to electronic mailing statements. This speeds up and simplifies collection.
Accounts Receivable Needs the Right People
People who are currently working in collections may be impeding your practice. They must be self-starters who can handle being pulled in multiple directions. They must be able to switch their focus between multiple patient accounts, so they must be good multitaskers.
Providers’ Revenue Cycle Mistakes
Payments from patients and insurers are usually due sooner rather than later in primary care and other types of practices that are more office-oriented if operations are to run smoothly. If providers do not properly manage the revenue cycle, their finances will suffer. While a mistake with one claim may appear minor, consider how many visits you receive in a week. Your finances continue to suffer as claim errors increase. Here are a few examples of revenue cycle mistakes that providers may make.
They do not keep up with payer requirements
You can’t just read your insurance company’s newsletter and call it a day. There are numerous instances where simply resubmitting your claim is insufficient. Instead, you must update your system to support the payer’s modification.
In short, if you fail to update your payer requirements, your cash flow will suffer and you will receive more claim rejections. If you want to ensure that your payer requirements are always up to date, working with a third-party medical billing company can be beneficial.
Failure to monitor the entire claims process
Something is obviously wrong with the claims process. What isn’t always as simple is determining which part of the claims process needs to be tweaked. You won’t know where things went wrong unless you monitor the entire claims process. This makes developing an effective solution difficult.
If you’re wondering what went wrong with your claims process, consider developing a business process that includes thorough follow-ups. Find out what tools you can use to create proactive alerts to any problems with your claims process. Being proactive and identifying problems as they occur is far superior to having to spend hours researching potential causes.
Failure to Recognize Trends
Large administrative workload practices typically process one claim at a time. Addressing claims one at a time, on the other hand, can be difficult for administrators because it becomes more difficult for them to see certain macro trends, which may cause them to make certain process mistakes multiple times.
It is beneficial to have workflow tools in place that will record any recurring trends for denials. This improves both your long-term and short-term revenue cycles. Understanding errors is the first step toward correcting them and filing additional claims.
You should also look into vendors who offer proactive reporting and auditing tools, as well as modern coding information and payer relationships. This provides your team with all of the resources they need to streamline daily revenue management, and it improves your practice’s performance significantly.
How Can Technology Affect Revenue Cycle Management?
We live in the digital age. It’s nearly impossible to walk down a city street without seeing someone engrossed in their smartphone. Hospitals and healthcare organizations are relying on technology to improve revenue cycle management components, which should increase profitability. Revenue cycle management (RCM) is a billing strategy used by healthcare organizations. It will be used by healthcare organizations to handle administrative tasks such as claim processing, revenue generation, and payment acceptance. Increasing profitability is always the goal, and several factors should be considered when assessing an organization’s financial strength. Here are some of the ways technology can improve revenue cycle management.
Human Error Is Reduced
Human error is, unfortunately, unavoidable at times. It frequently occurs when collecting patient information because there is so much of it. The consequences of their mistakes can ultimately result in a loss of profits for a company. However, newer technologies reduce the possibility of errors by streamlining the patient information collection process. It also saves time and usually results in better overall results. Management software is used by hospitals and healthcare organizations to keep track of all patient information. This information includes the patient’s medical history, address, billing information, and insurance information. When information is changed (for example, a new home address), the system will automatically update to reflect the changes.
Many aspects of healthcare revenue cycle are repetitive and consume valuable time during the day. Because some RCM processes are unavoidable, technology is frequently used to automate them. To begin, scheduling can consume a significant amount of time during the day. Many employees are required to spend a significant amount of time on the phone each day for scheduling purposes. Many organizations are now utilizing patient portals to enable patients to schedule appointments online. Another example would be claim submissions. Claims can now be submitted automatically for review in newer systems. We also have software that monitors each patient’s account, and certain functions can be pre-programmed.