Healthcare revenue cycle is a financial process that helps the healthcare provider to manage and keep track of the administrative aspects of their practice such as patient claims and payment revenues. The revenues thus obtained are utilised by the healthcare practice to maintain and provide consistent quality healthcare services for their patients. A well-defined heath care revenue cycle would consist of sequential steps that would capacitate complete reimbursements for a healthcare provider.
These successive steps that enable an efficient RCM process are as follows:
This step involves the collection of patient information regarding their medical history, demographic information, insurance information etc, prior to patient appointment with the physician. This step would enable the patient to have an idea on their total medical bill. Thus, the patients would be able to plan accurately and pay their medical bills on time. There would be no need for the patient to fill any patient information forms since the medical provider already has it. The medical provider would also benefit by this step by securing a payment guarantee from the patient’s end.
This is the step after pre-registration and involves collecting subsequent patient information and validating data collected. If any error is noticed by the healthcare provider while reviewing the collected patient data, this step enables the medical practice to bring such errors to the patient’s notice. Therefore, healthcare providers can prevent small errors from getting inflated into larger and irreversible problems as the healthcare revenue cycle proceeds.
In this step, the patient’s healthcare insurance provider decides whether a medical procedure, prescription or the use of a medical equipment is medically necessary for the patient. If the insurance provider does pre-authorize a medical procedure, it does not guarantee insurance coverage for that respective procedure. To gain clarity regarding a patient’s insurance benefits, the patient must double check their insurance coverage plan and policies. The only exception is that, this step is skipped during medical emergencies.
Patient Eligibility Verification
The health insurance eligibility specialists confirm the patients benefits on every visit to the healthcare practice. This is because, the patient might be proven eligible for a medical service on a certain date of service. But, on their subsequent visits for medical attention, their demographic data, insurance coverage plan, or prior authorization requirements might have not remained the same, which would disrupt the revenue cycle management process. Therefore, patient eligibility must be verified on every patient visit to the healthcare provider.
In this step, medical coders translate the patient’s medical diagnosis, procedures and equipment used into compliant medical codes. These alphanumeric codes are coded according to the medical coding classification systems such as CPT, HCPCS, ICD, etc. These codes must be specific and accurate since any errors in medical coding can cause the medical claim to be denied after claim submission.
In this step, the charges are captured into medical bills, for the services rendered to patients. These bills are called medical claims, and they are generated and submitted to the insurance providers directly by medical billers, or automatically through a practice management software. These claims once submitted might be rejected or denied for having detected errors in the information filled into the claim. These claim denials usually occur due to human errors or delayed claim submissions. The medical billers must resolve all errors to enable re-submission of the denied claims.
Insurance Payment Follow-Up
Once the claim is successfully submitted and received by the insurance provider, the medical practice follows up with the insurance providers to collect payments covered on behalf of the patients. These payments fall under the insurance coverage policy and are payed according to the terms agreed by the insurance company and the patient. This step would successfully recover the payment overdues from the insurance providers on time.
After receiving payments from the insurance provider, the payment balance owed by the patient is posted in their accounts. This step enables the patient to proceed to pay their balances that were not covered by the insurance plan. The Explanation of Benefits are also posted on the patient accounts that gives the details of all the services that were covered by the insurer, the amount that the patient is responsible to pay, reasons for adjusted charges etc.
Once the complete payments are secured from the patient and insurer’s end, detailed reports are maintained by the medical practice. This step is also known as medical documentation. These reports give complete details of the patient’s clinical history, medical practice’s financial data, key performance indicators, management information etc. These reports help the healthcare provider to gain an insight into the performance of their revenue cycle management. Since minute errors can get amplified as the RCM process proceeds, it is essential for medical practices to prioritize the process accuracy and accountability.
To achieve it, medical practices either recruit a dedicated team of medical billers and coders, invest on an effective revenue cycle management software or outsource their needs to a reliable third-party service provider. By carrying out an effective healthcare revenue cycle process, the healthcare practice can guarantee complete reimbursements.