For all medical practices, whether small or big, revenue cycle management is an important process with a direct impact on profitability and efficiency. By definition, revenue cycle broadly encompasses all administrative and clinical functions that contribute to the capture, management, and collection of revenue from patient services. Anything that is connected to a patient’s financial account with a medical facility is part of the revenue cycle.
While it sounds deceptively simple, the revenue cycle is a complicated process. A small discrepancy at the time of account creation can become a chaotic mess at the time of payment. For this reason, revenue cycle management (RCM) is crucial and is one of the fastest growing sectors in the healthcare industry. The intricacy of the process and its compelling effect on profitability is the reason both CFOs of large institutions and managers of smaller practices choose to outsource RCM to companies with a deep-seated knowledge of medical finances.
The root of the revenue cycle lies in healthcare data. Data in a medical organization is generated at a number of sources including clinical, financial, human resource, and patient feedback. Establishing trends in this data helps create good revenue cycle management. An efficacious RCM system allows you to see the financial standing of your practice or institution at a glance. It also reveals trends and unravels the cause for any negative trends. In addition to trends and the bigger picture, RCM also allows inspection of individual patient accounts to resolve any problems that crop up with insurance or billing. The ability of an RCM system to delve deep into data is fundamental to an undisturbed revenue stream.
Staff involvement in revenue cycle management is essential for the effortless flow of finances in any medical practice. Front office staff interacts with patients on a daily basis and are the best resource to rectify any problems that are identified by the RCM. Training staff in new practices and policies is an important part of the RCM strategy and a powerful way to keep finances running smoothly.
A good RCM system also monitors the payers. It ensures appropriate compensation is being received and keeps a tab on accounts receivable. It identifies payers who are routinely denying or rejecting claims. Once trends in rejections and denials from a particular payer are identified by the RCM, the payer can be contacted to facilitate a solution.
Patients also have a role in RCM. An efficient practice where patients feel well cared for will have improved patient compliance with paperwork and administrative needs. A good RCM includes online payment options with an easy user interface to make it a hassle-free experience for patients, and this makes it more likely that accounts will be kept up-to-date.
Automation and using the Internet for data transmission is indispensable to a streamlined RCM. Compared to manual claim submission and management of accounts, an application saves time and money by performing these processes efficiently and automatically creating the required documentation. An online presence allows patients to easily check their financial standing with the medical practice, and staff can explain any account activity quickly and efficiently.
A medical practice or hospital is a business at the end of the day, but with a very personal component to it. The right revenue cycle management solution can make seamless accounting and finances a reality, so the focus can remain on the patients.