Revenue Cycle Management (RCM) is a crucial aspect of running a successful healthcare organization. It involves managing the financial processes involved in getting paid for the services that are provided, from appointment scheduling and eligibility verification to billing and collections. Effective RCM is essential for ensuring that healthcare organizations receive timely and accurate payment for the services they provide, and it can significantly impact their bottom line.
As a healthcare organization, effective RCM is also crucial for ensuring financial stability and success. But navigating the complex processes of billing, coding, and insurance reimbursement can be challenging.
Whether you're a medical practice looking to streamline your billing and collections process or a medical billing company managing billing for multiple practices, this guide will help you maximize your revenue and improve your overall financial performance.
The Revenue Cycle Process
The revenue cycle process can be broken down into five main stages that can present opportunities for errors. These errors can halt or delay the service provider reimbursements from the patient and/or insurers’-service activities, service delivery, and post-service activities.
1) Pre-Authorization and Eligibility Verification
It involves the collection of the patient financial insurance information for authorization. Automated eligibility verification tools give the healthcare provider insights on how they will be paid for the different services and prepares the patients to take on financial responsibility.
2) Service Delivery
The patient visit clinical information is transcribed and coded to update the healthcare provider and insurers on the supplies and procedures of the claim. The billable charges in the claim are known at the “capture”. This process is vital because it assigns the medical billing code to the claim.
3) Claim Submission and Denial Management
Involves the submission of an accurately coded claim to the payer after completing the charge capture process. RCM services vendors track claims in real time to stop any denial and ensure that the facility submits a clean claim. In case of denial, the RCM service identifies the errors in the coding for correction and mitigation to prevent future denials.
The patient’s insurer reviews the claim and posts out-of-pocket costs for the patient to pay. An integrated billing solution gives access to a patient portal where they can view and pay their bills. The RCM vendor also provides quality collection services to help you optimize patient payments and keeps a patient on track to recovering the medical debt.
5) Quality Reporting
As the last step in the revenue cycle, quality repotting keeps you on track to avoid costly mistakes. Practical quality reporting tools enable you to identify common errors that lead to the loss of revenue for mitigation.
Challenges in RCM
There are a number of challenges that healthcare organizations can face when it comes to managing the revenue cycle process. These include:
- Lack of standardization in billing and coding practices: Different insurance companies and payers have their own unique billing and coding requirements, which can make it difficult for healthcare organizations to correctly submit claims and get paid.
- Complexity of insurance reimbursement processes: The process of getting reimbursed by insurance companies can be complex and time-consuming, with numerous rules and regulations to follow.
- Increasing patient responsibility: As high deductible health plans become more popular, patients are increasingly responsible for paying a larger portion of their healthcare costs. This can lead to challenges in collecting payments from patients.
Changes in Medical Billing and Coding in 2022
Since October of 2015, ICD-10 has been the standard “handbook” for medical coding and billing of internal classification of diseases. In January 2022, The World Health Organization and it's member states implemented ICD-11.
ICD-11 has 4x more codes within it than ICD-10, and a problem with careless mistakes made by billers and coders already exists. If practices aren't coding properly, they could potentially be leaving millions on the table by not coding to the most up to date standards.
The Financial Cost of Denials
A recent study estimates that over 262 billion dollars of claims get denied every year. That boils down to about 5 million dollars per provider! 32% of these denied claims are due to coding errors that are either classified as “avoidable” or “potentially avoidable.” When you factor in the cost to resubmit a claim is $25 dollars on average, the cost of recouping lost revenue can add up quickly, especially for independent practitioners. Its no wonder that roughly 65% of denied claims don’t get resubmitted.
Outsourcing to an RCM Service
One way that healthcare organizations can address these challenges and improve their revenue cycle process is by outsourcing RCM services. RCM services can include billing, coding, and claims management, and they can help healthcare organizations ensure that their claims are submitted accurately and efficiently, maximizing reimbursement, and avoiding potential compliance issues.
There are several benefits to outsourcing RCM services:
- It can help healthcare organizations save time and money by allowing them to focus on their core competencies, rather than having to devote resources to managing the revenue cycle process.
- It can also improve efficiency by leveraging the expertise and technology of a specialized RCM service provider.
Choosing an RCM Service Provider
When selecting an RCM service provider, there are a few key factors to consider. These include reputation, experience, and technology. It is also helpful to ask potential providers about their billing and coding expertise, their processes for handling denied claims and collections, and their pricing and contract terms.
One RCM service provider that healthcare organizations may want to consider is BillFlash. BillFlash is a cloud-based medical billing software-as-a-service (SaaS) provider that offers comprehensive RCM services to medical practices and medical billing companies. Their services cover every step of the payer journey, including billing, payment services, collections, and revenue cycle management.
BillFlash's RCM services are designed to help medical practices and medical billing services improve their billing and revenue cycle by ensuring that claims are submitted on time.
Implementing RCM Services
Once you have chosen an RCM service provider, there are a few steps you can take to ensure a smooth transition:
- Assess your current billing and revenue cycle processes. This involves analyzing your current practices and identifying areas for improvement. This will help you better understand your needs and ensure that you choose the right RCM service provider.
- Choose the right RCM service provider: As mentioned above, it's important to select an RCM service provider that has the expertise and technology to meet your needs. Consider factors such as reputation, experience, and technology when making your decision.
- Train your staff: Ensuring that your staff is trained on the new RCM systems and processes will help ensure a smooth transition. This may include training on new software, procedures, and processes.
- Implement the new RCM services: Work with your RCM service provider to implement the new systems and processes. This may involve transferring data, setting up new accounts, and establishing new procedures.
- Monitor and optimize: After implementation, it's important to monitor the results of the new RCM services and make any necessary adjustments to optimize their effectiveness. This may include analyzing data to identify trends and areas for improvement and making changes to your processes as needed.
Maximize Your Revenue with BillFlash
Revenue cycle management (RCM) is an essential part of managing the financial aspects of healthcare. It involves managing the entire process of getting paid for healthcare services, from appointment scheduling to billing and collections. Outsourcing RCM services can help healthcare organizations and medical billing services save time and money while improving efficiency and maximizing ROI. When choosing an RCM service provider, it's important to consider factors such as reputation, experience, and technology and to ask potential providers about their billing and coding expertise, processes for handling denied claims and collections, and pricing and contract terms. By following a structured process and working with a reputable RCM service provider like BillFlash by NextTrust, healthcare organizations can improve their billing and revenue cycle management processes and maximize their revenue.
If you are interested in improving your revenue cycle management process, consider using BillFlash. BillFlash offers end-to-end RCM services that manage everything from pre-claim services to patient payments and collections. Our team of experts will manage every aspect of your insurance and patient billing revenue, so you and your staff can focus on what matters most—providing top-quality patient care. Contact us today to schedule a demo.