Understanding the healthcare revenue cycle of practice

The Healthcare revenue cycle is what keeps a practice financially strong. It is a process that encompasses all the activities leading to the payment of services. So, right from patient registration, healthcare insurance eligibility verification, and claim submissions to reimbursement- revenue cycle management runs along.

Revenue cycle management isn’t just that. The process involves communication with insurance companies, patients, and government payers like Medicaid and Medicare.

What exactly is a revenue cycle?

The clinical and administrative functions that contribute to the capture, management, and collection of patient service revenue, are called the revenue cycle. Simply put, this is the entire existence of a patient account, from creation to payment. 

A healthy revenue cycle should adhere to best practices in billing and collection to ensure that bills are submitted under payor prerequisites and that all services provided are appropriately billed. The last thing any practice wants is to provide services without any compensation.

What are the components of a robust healthcare revenue cycle?

In every healthcare system, the revenue cycle management devels more than just providing the services or filing a claim. The most efficient revenue cycle teams are focused on answering that one primary question that patients want an answer to ‘How much do I have to pay for my care?’ Teams like that keep looking for ways to facilitate patient-centric communications and financial engagement.

That being said, most healthcare practices tackle revenue leakage at many points. Any leakage in the revenue cycle hampers the total cash inflow and weakens the financial base. 

Points of Revenue Cycle Leakage 

There are numerous leakage points in the revenue cycle, but the following are the most common: 

• Absence of authorization
• Errors in registration, coding, or billing 
• Unverified insurance
• Denied appeals
• Underpaid claims

A walkthrough of the Revenue cycle management 

Outsourcing Processing or RCM Software 

The primary step in the revenue cycle is deciding how to handle the processing. You may consider installing RCM software on your servers if your scope is relatively limited and you have a decent IT team and staff proficient in using dedicated software for healthcare billing services. 

However, outsourcing the process to third-party experts may be the best option if you run a larger organization, such as one with multiple providers across multiple offices. Practices with limited RCM staff expertise will also benefit from outsourcing this task to focus on their core competencies and in-patient treatment.

Pre-Authorization 

The pre-authorization is the next crucial step in revenue cycle management. Pre-authorization is approval from any health plan needed before a patient gets a service or fills a prescription. Patients require pre-authorization for the service or prescription to be covered by the insurance plan. 

(Pre-authorization is waived off in cases of a medical emergency.)

It’s important to remember, however, that pre-authorization for a procedure or medicine does not always imply that the insurer will cover the cost. Therefore, patients and healthcare providers must double-check if coverage is doubtful.

Verification of Eligibility and Benefits 

Checking on eligibility and benefits for patients is one of your front office staff’s drudgeries. It can be a time-consuming and grueling experience over the phone, resulting in low employee morale. 

Modern practice management software also includes automatic checking of patient eligibility through the internet over secure channels, implying that using dedicated RCM software offers excellent outcomes that expedite the verification process of whether or not a patient is eligible for a specific benefit.

Submission of Claims 

Payment won’t be processed until your office correctly submits claims for the services you provide to your patients. In this situation, Practice Management (PM) software is invaluable. It is used to submit claims automatically, with the option to do so in batches. Because human error is always a factor to consider when submitting claims, you’ll want to position PM software tools that detect and explain errors so you can learn and fix the problem. Then you can resubmit the claim right away. 

It will be easier to accelerate the billing flow in your organization once you have tighter control over claims and tools to weed out common errors and improve total billing in your revenue cycle management process. All of that is achievable and easy when a practice partners with a well-versed healthcare revenue cycle management company.

Payment Posting 

After the claim is settled by the insurance company, the payment that is received is posted in the patient’s account. Again, RCM service and related software can help with the convenience it provides for generating billing statements and the overall collections experience. 

Practices can also use the system to send electronic messages to patients with a “click here to pay” option to encourage patients to pay more quickly. Billing over such networks is accomplished through Electronic Data Interchange.

Denial Management 

How frequently are claims denied for services provided outside of your facility? If the quarterly reports show a drop in revenue due to too many denied claims, it’s time to look into the situation. If revenue has recently been slow due to problematic claims, properly executed denial management will ultimately boost earnings. 

Incorporating denial management into your cycle can help your practice recover revenue that would have otherwise gone unnoticed due to incorrectly filed forms to health insurance companies. In addition, you may notice patterns, such as more denied claims when certain people work together, billing issues for specific procedures, or members of the patient population.

Reporting 

Without detailed reports, medical practices or hospitals may have hidden problems that are worsening. It would help if you created a variety of data reports for your meetings. To determine whether your staff is meeting benchmarks, use the RCM software tools to create customized reports that include financial data, information management services, and key performance indicators. RCM automation can also assist in this regard. 

Furthermore, when using a modern, cutting-edge RCM system, you can generate reports without worrying about slowing down processing for other users. As a result, your practice will become more productive.

Why Capline Healthcare Management?

There is no doubt that your revenue cycle can benefit from dedicated assistance software. But is that all you need for solid financial backing? If you ask people on the ground, they might say otherwise. 

Any software cannot be your superhero when saving the revenue cycle. For starters, your RCM support software will need skilled staff to utilize its capacities to the maximum. You will have to spend a good amount of resources to keep this going. Even after all this, there is no vouched way to tweak the functionalities according to your convenience. That is where outsourcing can help.

 

Capline Healthcare Management is one of the most renowned healthcare assistance companies in the United States. Our expertise has helped hundreds of practices streamline their revenue management cycle and pull up some impressive numbers on board. In addition, our RCM experts can help you streamline your backend to keep the cash inflow positive for a robust revenue cycle.

Contact us today for healthcare credentialing prices, healthcare IT services, healthcare digital marketing, medical billing, and more.