As a healthcare organization, ensuring a smooth flow of revenue from patient to provider is a complex process that plays an important role in the financial health of your organization. Revenue cycle management, or RCM, encompasses the various steps that providers take to ensure they receive payment for their services. Here’s an overview of how RCM works in a healthcare setting and how it can impact your organization.
Why Is Healthcare RCM Important?
Managing revenue isn’t easy for any business, but it’s particularly challenging in a healthcare setting where insurance claims are such a big part of collecting timely payments. Errors at any point, from collecting accurate patient information to submitting precise medical codes, can lead to delays or denials that put your financial health at risk.
Having a solid RCM system not only eases day-to-day operations, but it also ensures you receive timely payment for the services you provide.
Steps to Revenue Cycle Management in Healthcare
Every organization is different, so there’s no one-size-fits-all approach to RCM. However, there are a few key steps that can improve your operational efficiency and RCM efforts:
1. Detailed Patient Registration
Capturing accurate patient information lays the foundation for billing later on down the road. Key information such as name, address, insurance, and whether the visit may be tied to a worker’s compensation claim will make it easier to bill properly and reduce your risk of an unaccepted claim.
2. Eligibility and Benefits Verification
Verifying patients’ insurance coverage and benefits ensures that services rendered are covered. Doing so before a visit rather than afterward will ensure that the patient is covered by the payer. This step should also include handling prior authorization or pre-certification for specific medications or procedures.
3. Coding and Claim Submission
Properly documenting which services are provided and applying the appropriate medical codes is crucial for accurate claim submission to insurance companies. Ensuring precision at this step isn’t easy, but staying up-to-date on changes or having a compliance manager can help ensure your billing is submitted properly.
4. Denial Management
Handling claim denials and rejections efficiency is essential for maximizing revenue. Poor denial management could do more than just delay your payment; it could jeopardize your ability to collect payment at all, which can take a large financial toll over time.
5. Patient Billing and Collections
Issuing invoices to patients for any remaining balances and managing collections to ensure timely receipt of payment is another key step to focus on.
How Is RCM Different From Medical Billing?
At first, RCM and medical billing seem very similar—after all, they’re both important to collecting payment for your services. However, medical billing is just one step in the greater RCM process. Effective RCM is a meticulous coordination of financial processes that touches the entire lifecycle of a patient account, from the initial encounter to the final payment.
Importance of Medical Billing and Coding in RCM
Coding and billing may be just one part of RCM, but they are important to the overall financial health of your organization. Medical billing specialists work to create accurate submissions to insurance companies, and precise coding reduces your risk of billing errors or claim denials that can lead to big financial losses. Improving your medical billing process can certainly enhance your greater RCM process.
Important RCM Metrics in Healthcare
When it comes to RCM, data is one of your biggest tools. While there are hundreds of metrics you can analyze to get a picture of your organization’s revenue management and overall financial health, these are some of the most important numbers to focus on:
- Number of claim reimbursements per week
- Average time to get paid
- Claim denial rate
- Net collection rate
- Number of accounts receivable over 60 days
Why Use an RCM Software?
Navigating revenue cycle management can be overwhelming, especially at first. Implementing an RCM software solution can help you get started by providing you with automated tools that handle several of these steps for you. Not only that, but RCM software is often backed by specialists who have in-depth knowledge about the billing and revenue management process, so you can identify and address areas for improvement.
Optimize Your RCM With EnableComp
At EnableComp, we believe you deserve to get paid for the work you do, and we’ve helped over 1,000 hospitals and health systems across the country recover over $5 billion in claim reimbursements. Our intelligent automation platform, E360 RCM™, is designed to optimize your specialty revenue cycle — integrating directly with your system to offer streamlined support without the hassle of a separate software.
Ready to streamline and optimize your revenue cycle management? Contact us today for a free consultation and discover how our specialized RCM platform can benefit your healthcare organization.
