Understanding the 13 Steps of Revenue Cycle Management

Give your practice the jumpstart it needs to improve its understanding of the 13 steps of revenue cycle management with this guide.

Revenue Cycle Management—three simple words. But these words form the backbone of financial management in healthcare. These words also hold plenty of frustration for independent healthcare providers. Many independent healthcare practices struggle with understanding Revenue Cycle Management (RCM), given its complex nature. In an industry where every dollar counts, though, it's important for healthcare providers and their practices to fully understand the process.

By breaking down this process into 13 steps, we hope to give your practice the jumpstart it needs to improve its understanding of revenue cycle management and lay the groundwork for a more efficient and profitable future.

Step 1: Pre-Registration

Before patients even step one foot in the facility, the revenue cycle begins with pre-registration. This first step involves gathering and verifying patient information and eligibility details. Failing to nail down accurate information here can lead to costly claim denials as well as unhappy patients down the line.

Best practices include:

  • Use systems that can quickly obtain information from insurance companies for real-time benefit verification
  • Create easy-to-use online portals for patients to enter their data
  • Give patients options by offering multiple pre-registration channels—online, by phone, in person, etc.

Step 2: Registration

Efficient registration is the key to a smooth patient experience. This step also involves formally checking patients into the healthcare facility, and reviewing and updating demographic and insurance information as needed.

Best practices include:

  • Ensuring accurate capturing of patient information
  • Continually educating staff on the importance of thorough data collection
  • Regularly auditing registration procedures to reduce data errors
Revenue cycle management strategies - Hospital staff assisting a senior man during his consultation.

Step 3: Charge Capture

Accurate charge capture ensures that all services provided to patients are properly documented and billed. This step in the revenue cycle management involves recording and coding all procedures, treatments, and supplies used during patient encounters.

Best practices include:

  • Leveraging user-friendly technology platforms that allow staff to enter charges as they happen
  • Scheduling routine charge audits to catch anything that may have fallen through the cracks
  • Having a highly detailed process for cross-checking coding to ensure no billable item gets missed

Step 4: Claims Submissions

Timely and accurate claim submission is also crucial for maintaining a steady cash flow. Once charges have been captured, claims must be prepared and submitted to payers for reimbursement.

Keep the following strategies in mind:

  • Regularly monitor claim submission data for errors or rejections
  • Utilize technology to streamline the submission process
  • Partner with an electronic claims clearinghouse

Step 5: Proper Coding

Proper coding is also essential for accurate billing and reimbursement. Certified coders assign specific codes to diagnoses, procedures, and services provided to patients.

Prioritize the following actions:

  • Auditing coding practices to identify and correct errors
  • Providing ongoing training for staff on coding updates and best practices
  • Employing certified medical coders

Step 6: Patient Billing

After payers have processed claims, any remaining patient responsibility (co-pays, deductibles, or non-covered services) must be billed to the patient. If one of your patients receives a confusing or inaccurate bill, this can lead to frustration, payment delays, as well as potential damage to the provider-patient relationship. This not only impacts the practice's cash flow but also undermines the patient's trust and overall experience.

To optimize the patient billing process, implement the following strategies:

  • Offering multiple payment options 
  • Maintaining transparent billing practices to build trust with patients
  • Sending bills promptly and regularly to avoid delayed payments

Step 7: Payment Processing

Efficient payment processing is also necessary for capturing revenue promptly. This step in the revenue cycle management involves posting payments received from payers and patients accurately and reconciling any discrepancies. Payment processing systems that are plagued by errors will lead to misapplied payments, incorrect balances, and a host of other issues that can completely disrupt the entire revenue cycle.

Consider the following best practices:

  • Implementing an efficient payment processing system to reduce errors and delays
  • Give patients the convenience of online payment channels
  • Diligently reconcile every payment against services rendered 
13 step of revenue cycle management - Financial reports on a table with a calculator and a doctor’s stethoscope.

Step 8: Insurance Follow-Up

Timely follow-up with insurance companies is crucial for resolving denied or underpaid claims. This step also involves identifying the root cause of denials, gathering supporting documentation, and resubmitting claims for proper adjudication. 

Best practices include:

  • Regularly following up on outstanding claims to ensure timely payments
  • Building as well as maintaining good relationships with insurance providers to speed up the process
  • Using software to track claim status and identify any delays or denials

Step 9: Denial Management

Effective denial management is “a must” if you want to truly maximize reimbursement and reduce revenue leakage. This step involves analyzing denials, identifying trends, as well as implementing process improvements to prevent future denials. 

Best practices include:

  • Understanding common reasons for denials and addressing them
  • Training staff in effective denial management strategies
  • Recording and analyzing denial patterns to prevent future occurrences

Step 10: Appeals

In cases where claims are improperly denied, practices may need to initiate the appeal process. This step in the revenue cycle management involves gathering supporting documentation, following payer-specific guidelines, and submitting appeals within designated timeframes.

Best practices include:

  • Documenting all communication and correspondence related to the appeal process
  • Utilizing data and evidence to support the appeal and increase chances of success
  • Staying organized and escalating the issue if necessary
Revenue cycle management strategies - Medical professionals reviewing their practice’s reports and data.

Step 11: Patient Collections

Collecting outstanding patient balances is another critical step of revenue cycle management. This step involves implementing effective strategies for communicating with patients, offering flexible payment options, as well as escalating delinquent accounts appropriately. 

Consider these strategies:

  • Use a patient-friendly approach while reminding them of outstanding balances
  • Offer flexible payment plans to patients based on their financial situation
  • Have a clear and transparent payment policy in place

Step 12: Reporting and Analysis

Comprehensive reporting and data analysis are also needed if you want to identify areas of improvement and drive strategic decisions within the revenue cycle. 

Consider the following strategies:

  • Identify and track relevant KPIs such as denial rates, days in A/R, and collection ratio
  • Regularly share reports with relevant stakeholders for transparency and accountability
  • Utilize data analytics to identify areas for improvement and increase efficiency

Step 13: Compliance

Compliance with regulations around coding, privacy, billing, etc. is non-negotiable. Even one slight lapse can result in major fines and reputational damage. 

Consider the following strategies:

  • Invest in dedicated compliance teams or external consultants
  • Carry out regular audits and risk assessments
  • Provide training to ensure all staff understand the latest compliance requirements

Get Revenue Cycle Management Right With BillFlash

While each step of the Revenue Cycle Management process presents its unique challenges, BillFlash understands how to navigate the ins and outs to optimize the revenue of your practice. BillFlash RCM Services have been designed to address these steps head-on and eliminate the headache that is often involved with claims submissions.

From pre-claim services that ensure that submitted claims are error-free to final payment collection, our solutions streamline processes, ensure accuracy, and improve cash flow. Your dedicated account manager also meets with you monthly to review detailed reporting and provide insight and strategies for enhancing revenue, reducing denials, and boosting your RCM efficiency.

Schedule a demo today to learn how BillFlash RCM services can reshape your practice’s financial health and open the door for new avenues of profitability and growth.

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