Optimizing Hospital Revenue Cycle Management: A Key to Financial Sustainability
Revenue management is the core of a healthcare facility’s finances. A streamlined and efficient revenue cycle management at hospitals ensures that patient bills are properly handled, medical billing is correct, and payment is made quickly.
In simple phrases, revenue cycle management in medical billing involves all financial actions hospitals take from when patients make an appointment until they receive treatment. Additionally, it involves the steps patients take when being charged for services, resolving an insurance claim, and finally settling their bills. Any interruption or failure can greatly impact a hospital’s financial health.
Effective revenue cycle management optimization is crucial for hospitals striving to maintain financial sustainability in today’s evolving healthcare landscape. By streamlining processes such as patient registration, insurance verification, charge capture, and claims submission, healthcare providers can minimize errors, reduce denials, and accelerate reimbursement cycles.
The reason why the need to optimize RCM was never vital
Although it’s always vital for healthcare providers to enhance RCM within their facilities, taking action now can help them survive and get through this difficult time. COVID-19 has impacted many healthcare providers. While some were able to receive bailouts worth billions, others were forced to shut down for good. Others struggle with the financial loss. However, as the number of in-person visits is rising, the future looks better for caregivers, provided they’re adopting strategies to optimize RCM from the beginning.
In this regard, let’s examine some methods for maximizing the effectiveness of Revenue Cycle Management.
How can revenue cycle management help healthcare operations?
Healthcare organizations depend on RCM to ensure the stability of their finances, improve efficiency, and better healthcare for patients.
The financial stability RCM helps ensure a stable revenue stream for healthcare professionals through taking care of and securing payment quickly for services provided.
Cost reduction and efficiency: Cost reduction and efficiency: Efficiency and reduced costs: RCM process helps to reduce the time and energy that are used to handle administrative tasks, like billing and coding. This allows staff to concentrate on the patient’s care.
Better patient experience: A managed RCM system that is well-managed will facilitate efficient billing and faster payments, which reduces confusion and improves overall experience for patients.
The components and stages of the revenue cycle for healthcare
The revenue cycle for healthcare has multiple stages that make sure that healthcare providers get paid for the services they provide.
Pre-registration: Collecting the patient’s demographic information and insurance information prior to their visit.
Registration of the patient: Obtaining additional details about the patient, including the patient’s personal details as well as medical background.
Insurance verification and authorisation: Verifying the insurance coverage and obtaining authorizations for procedures.
Coding and capture of charges: Recording all procedures and services completed and changing the documentation into bill codes (e.g. ICD-10 or CPT codes) to be used in insurance claims. These codes are common across the entire industry and determine the amount that a healthcare professional is paid.
Submission of claims: submitting codesd requests to the insurance company for reimbursement. The insurer will assess whether the claim is in compliance with agreement and policies for payment and determine whether to pay in full or partially, or deny or decline the claim.
Reporting: Analyzing the data and performance indicators as well as providing information on overall condition of a provider’s revenue cycle as well as flagging potential areas for improvement.
