What is revenue cycle management?
Revenue cycle management is the process that hospitals and independent provider offices utilize to track and manage the revenue generated from services rendered to patients. The cycle begins when a patient schedules an appointment and ends when the funds for the services rendered are fully collected and registered. It is important to complete each step of the cycle accurately to maximize revenue.
What are the steps of the cycle?
The revenue cycle for a provider’s office begins when a patient gets in touch to schedule an appointment. The cycle has various administrative and clinical steps that act as parts of a puzzle. The accurate completion of these parts allows providers to communicate the services they rendered to the patient, for the patient’s unique needs, to the insurance plans; and get compensated for these services correctly.
Collection of Information
RCM starts when a patient is scheduling an appointment. The office should collect and verify information related to demographics, insurance coverage, and medical history of the patient at this step in the cycle. It is essential to capture the information in this step in order to mitigate problems with coverage and coding and avoid denials related to demographic inaccuracies. Once the patient comes in for their appointment, this information is verified.
Coding, Claims Submission, and Rejection Management
Upon the delivery of services, the procedures should be appropriately coded into billable charges and submitted to the correct insurance company, in the form of a medical claim, based on the information collected on the patient’s coverage. If all of the steps of the cycle, up until this point, have been accurately completed, the claim should make it to the insurance company. However, inaccuracies in previous steps in the cycle can result in rejections from the clearing house. It is important to keep track of any rejections to make the necessary corrections and adjustments to the claims so that they can be resubmitted.
Payment Processing and Denial Management
Once the insurance company finishes processing the claim, the office receives remittance advice that details the adjudication of the claim. The remittance advice should be posted and carefully reviewed. If a denial could be appealed or could be submitted for reconsideration, it is important to provide the reasoning and all necessary supplemental documents that can clarify the reasoning of your appeal. If the denial stems from any errors on the claim like coding errors or demographic errors, a corrected claim should be submitted.
Patient Collections
Depending on the type of insurance plan that the patient has, there might be a certain amount of payment responsibility that falls onto the patient. This information should be reviewed carefully and the necessary amount should be collected from the patient.
What is the importance of RCM?
Failing to accurately complete any of the steps in the cycle can disrupt payments and quality patient care. It is, therefore, crucial to have mechanisms in place to mitigate errors, provide patients with the care they need, and optimize practice profitability.
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