What is revenue cycle management (RCM)? And why is it so important in healthcare?
What is Revenue Cycle Management?
Healthcare revenue cycle management (RCM) is the force behind any effective healthcare system, ensuring patients seamlessly receive the high-quality care they deserve.
The scope of RCM ranges from customer service, coding, and documentation to insurance coordination, billing, and utilization review – all of which work on a non-clinical level to make sure healthcare facilities can operate efficiently, resources are not wasted, and most of all, patient care is not compromised.
Case managers, medical coders, clinical documentation specialists, billing and payroll experts, health information management (HIM) technicians, patient access representatives, medical social workers, and more skilled RCM experts handle all the coordination, documentation, and communication needed to optimize efficiency and deliver a smooth and positive patient experience.
The revenue cycle itself begins when a patient schedules an appointment or walks into a hospital and ends when the final bill is paid and a report has been made to reflect on the efficiency of the process.
Here’s a breakdown of the revenue cycle and how RCM supports each step.
Patient Registration
The start of the revenue cycle is when a patient schedules an appointment or walks into a healthcare facility for the first time. This is when patient demographic information is documented and a medical record number (MRN) is assigned to the patient, ensuring the facility remains compliant with clinical and financial regulations.
Pre-Authorization and Eligibility Verification
Upon registration, patient insurance information is collected by the healthcare provider, and coverage is verified. This helps to ensure the patient is billed the correct amount, that they are aware of any out-of-pocket costs, and that the bill is directed to the proper insurance provider (or patient).
Patient Experience and Care Delivery
While clinicians provide direct care to the patients, revenue cycle management teams work to ensure patients receive exceptional customer service, their care plan is communicated, treatments offered to them are covered by insurance, a safe timely discharge plan is arranged, and they are satisfied with the care they receive.”
Clinical Documentation
This is a critical step in the revenue cycle, wherein details of the patient, their visit, and all necessary details are documented swiftly, correctly, and according to regulatory standards. This is not only vital to patient care in the way that symptoms, warning signs, and the like are tracked – but also essential for billing and insurance tracking. Improper, missing, or incorrect documentation can impact the care a patient receives or result in unbilled medical services and more out-of-pocket expenses for the patient.
Charge Capture
Charge capture is when the information obtained through the clinical documentation process is converted into billable charges.
Medical Coding
Medical coders use the information documented during the patient’s encounter and properly code the services and procedures. This determines how much reimbursement the provider will receive from the patient’s insurance and prevents claim denials.
Claim Submission
At this step, services and procedures are broken down into billable charges and sent to the patient’s insurance provider in a timely manner. The previous steps of the revenue cycle are vital to ensuring this step goes smoothly for all parties involved.
Payment Collection
If the payment is approved by the patient’s insurance provider, the healthcare facility will be reimbursed in accordance with the patient’s eligibility. If a balance remains, the healthcare facility will send that bill to the patient and manage the process going forward.
Denial Management
Insurance claim denials are a common roadblock in the revenue cycle. Effective RCM teams will begin denial management, which includes concurrent and retrospective appeal processes. The cause of the denial will be investigated, then it will be determined whether a new claim submittal, reconsideration, or appeal is needed.
Reviewing and Reporting
While the bill may be paid, the revenue cycle is not quite over. The final step in the process is to perform a utilization review, examining whether the services the patient received were necessary, where resources may have been wasted, and how the cycle can be optimized to minimize unnecessary expenses on the sides of the patient and healthcare provider.
Why is Revenue Cycle Management So Important?
To answer this question, we talked to GHR's director of Compliance for Case Management and Social Services, Patrick O'Boyle, RN, BSN, ACM-RN, CMAC, CCM. Patrick has over 20 years of experience in revenue cycle management and was recently named president of the Florida chapter of the American Case Management Association (ACMA)! Here's what he had to say:
Revenue cycle management is an essential function of any healthcare provider. It connects the clinical and non-clinical aspects of a patient’s time under the care of a healthcare facility, allowing little opportunity for miscommunication and error across the entire continuum of care. The result is maximized efficiency, improved fiscal well-being of the healthcare provider, streamlined communication between the clinical and non-clinical aspects of the patient experience, and, most of all, high-quality care for patients.
Want to learn more about revenue cycle management at GHR?
"Our specialty of revenue cycle management is providing you with trusted coding & auditing resources to ensure quality metrics are met or exceeded. We support front-end coding and denial management. From billing to denials management and everything in between, GHR RevCycle can help with supplemental staffing and managed solutions."