Many healthcare providers view revenue cycle management (RCM) as the means by which they realize revenue. Invoices go out, and cash comes in. Yet the complexity of the RCM process goes far beyond cash flow.
Because RCM encompasses documentation, coding, data entry, billing, claims, and compliance, it’s truly the backbone of any practice. Getting it right is imperative for success. Understanding how far RCM stretches into total practice operations can have a profound effect on the way providers approach this all-important process.
RCM starts with processes
Revenue cycle management isn’t just about revenue. True RCM looks at the entire financial cycle of a healthcare practice, from the time a patient schedules an appointment to the time the practice receives payment for services rendered. As a result, there are multiple facets to consider across the practice’s scope of operations.
For example, does your process for scheduling and checking in patients make it easy to capture insurance information? What safeguards do you have to document treatments and guarantee they’re coded correctly? What is your process for receiving and reprocessing denied claims? While these appear to be siloed concerns within a practice’s operation, RCM is the thread connecting them all.
A well-defined RCM process with clear responsibilities is crucial for any practice’s financial success. It enables providers to identify improvement opportunities, optimize workflows, and allocate resources so revenue comes in without issue.
The main steps in RCM
If solid processes are the backbone of successful RCM, the question becomes where to construct them. Below are the core steps in RCM and the areas where strong frameworks can come together to establish not only better financial practices but also an enhanced patient experience:
- Preregistration: Gathering information from patients and verifying their eligibility and insurance coverage upfront is a simple way to improve RCM. This step plays a vital role in improving patient experience — especially if price transparency is built in.
- Registration: Collecting patient demographic and insurance information and having a well-defined method of correlating this information to each visit can help ensure billing and claims processing are efficient and accurate.
- Charge capture: Data integrity is critical when recording all services and procedures performed during a patient’s visit. Don’t just focus on service capture; check and double-check transcription and coding as well.
- Claims submission: Claims submission must happen in a timely manner post-visit, and providers should know how to submit claims to various payers. It helps to establish points of contact and relationships with insurers.
- Remittance processing: Reconciling payments from insurance providers with submitted claims also must occur in a timely manner. This ensures payments are accurate and accounted for correctly, which can reduce errors.
- Insurance follow-up: Denied claims require monitoring and follow-up for prompt processing and reimbursement. Building efficient processes can minimize revenue loss and improve cash flow.
- Patient collections: Practicing early-out strategies, having proactive communications, and offering price transparency help guarantee direct-pay accounts become realized revenue and not bad debt write-offs.
Managing and monitoring RCM
Besides the actual RCM process, healthcare providers also need to track key performance indicators (KPIs) to help them manage revenue operations effectively. Metrics such as accounts receivable aging, denial rates, and clean claims rate (CCR) can provide valuable insights into the performance of an RCM process.
Providers must also monitor their cash flow and bad debt to understand the financial impact of their revenue management changes and improvements. By tracking these factors, they can identify potential issues early and take proactive measures to address them.
Changes in healthcare regulations and the introduction of new technologies require providers to adapt and improve their RCM processes continually. Improvements to individual RCM processes must also be constant to close gaps and keep pace with the evolving healthcare landscape.
The importance of RCM
RCM is essential to the financial success of a practice, primarily because it touches every operational aspect. By understanding the breadth of RCM and the best practices and challenges associated with it, providers can optimize not only their revenue collection processes but also their patient care models to ensure industry compliance, financial stability, and patient satisfaction.
Learn more about the scope of RCM at trubridge.com.