Revenue cycle management is the procedure of tracking and collecting revenue from patients in healthcare. RCM encompasses everything from scheduling a patient for a clinical encounter to final payment for healthcare services rendered. As defined by the Healthcare Financial Management Association (HFMA), the Revenue Cycle is “all administrative and clinical functions that contribute to the capture, management, and collection of patient service revenue.” Utilizing revenue cycle best practices ensures that you reimburse services at their total value.
It is a cycle that describes and explains the patient’s life cycle and the subsequent revenue and payments that occur during a typical healthcare encounter, from admission registration to final amount or adjustment of accounts receivables.
At Sullivan Management & Consulting Group, we assist organizations in reversing negative behaviors, implementing new services and revenue streams, and establishing the framework for ongoing sustainable growth. Whether you’re looking to enhance your current practice, accelerate growth, or position your business for private equity or a merger, we can develop and implement the processes necessary to propel your practice forward.
Benefits Of A Properly Planned Revenue Cycle Process
For some healthcare facilities, the RCM responsibilities can become overwhelming and conflict with other office duties, including managing employees, keeping up with government programs, and other administrative tasks.
Among the benefits of revenue cycle management are the following:
- An increase in the average percentage of claims paid following the initial submission
- Reduced rate of denial
- The average percentage of current shares increased (0-60 Days)
- A more significant proportion of clean claims
- Payment of claims more quickly
- Increased the practice’s net revenue
- Reduced the number of outstanding receivables
- Reduced number of denied claims
- Improved care quality by allocating additional time to patient care issues
- Correct patient information is available, and your staff is relieved of stress.
Compliance requires software technology and a centralized billing/coding system for healthcare providers. Combining revenue cycle management processes into an organization’s overall business strategy frequently results in increased reimbursement, accurate billing compliance, and superior clinical outcomes.
By partnering with Sullivan Management & Consulting Group, healthcare clinics can operate more efficiently, providing more medical services to those in greatest need.
Difficulties To Experience When You Lack A Proper System In Place
In general, the health – care revenue cycle is vibrant and ever-changing. As a result, healthcare professionals responsible for revenue cycle management frequently face various challenges, ranging from billing errors to a lack of established processes and policies. Providers must consider ways to improve their revenue cycle.
The following are the top five most common revenue cycle pain points for hospitals and private practices, along with tips for providers to avoid financial distress:
Challenges In Health Information Technology
Revenue cycle management in private practice and hospitals necessitates healthcare professionals’ use of information technology to track claims throughout their lifecycle. It is essential to ensure payment collection and the resolution of denied claims.
Healthcare Providers and private practices should consult with information technology consultants to assist them in making decisions.
Inadequate Staff Training
If healthcare staff members are not adequately trained, they may not bill correctly or accurately capture patient data. Billing staff must understand how to adequately capture a patient’s demographic information on the front end and then translate that data into successful insurance claims.This applies to both hospitals and private practice.
To learn how to code effectively, coding staff should complete a 60-hour training session in four-hour increments. A well-trained staff can help reduce billing errors and streamline the billing process.
Incorrect Billing And Collection
Lack of attention to a payment process can cost hospitals and private practices tens of millions of dollars and may also surprise patients with enormous debts they cannot repay.
A healthcare provider must employ an efficient, well-trained medical billing staff that understands the critical nature of the data they handle daily.
Absence Of A Financial Policy
Certain healthcare and private practice facilities do not have a financial policy manual available to employees. These policies are critical components of revenue cycle management. They should be made electronically or in writing open to employees. Additionally, they should need evaluation by legal advisers.
Health care providers and private practices should put in place policies that will govern their staff and clients.
Poor Communication Between The Physician And The Financial Staff
If the practice’s lead physician is not actively involved in the revenue cycle process, they can become detached from the practice’s financial health. Minor issues can quickly escalate into larger ones, and significant revenue can disappear due to flawed business processes involving rejected claims, unaccounted payments, and slow turnaround.
The majority of hospitals and private practice strategies must recognize revenue cycle management to continue fulfilling their purpose of providing high-quality patient care. While outsourcing is a complex process, it is one way to overcome RCM’s challenges and free up healthcare staff to focus on their strengths. Get in touch with Sullivan Management & Consulting Group to discuss setting up a Revenue Cycle Management system at your practice.