As healthcare providers, it’s your duty to be focusing on top-quality healthcare to your patients, but let’s not neglect the financial side of your practice too. When running a business in the healthcare industry, revenue cycle management (RCM) is a vital part of your accounting that can’t be overlooked.

Within this article, we’ll explore all there is to know about the RCM process and its implications on your practice’s financial health.

From understanding the 13 steps of revenue cycle management to implementing effective strategies, we’ll go over all you need to know to save on costs and overall improve patient satisfaction.

1. Verify Insurance Eligibility & Benefits

The first of the 13 steps of revenue cycle management is the patient registration process to verify your patient’s insurance eligibility and benefits. This step is fairly crucial, as you need to know if their insurance company covers the medical services rendered by your practice.

There’s various ways you can do this, but medical billing companies can be an effective means of completing the verification process.

2.  Collect Patient Information

Next, ensure you have the right patient information in order to streamline the billing process and avoid costly errors. If there’s a claim submission with incorrect patient data, the entire revenue cycle management can suffer due to the resubmission process, so ensure you’re collecting accurate data.

Make sure you’re collecting things like:

     –  Patient demographic

     –  Insurance information

     –  Any medical history that may impact the services provided

3.  Check For Medical Necessity

Medical necessity is generally determined by the patient’s medical condition and the various services you’ve provided.

To actually ensure medical necessity, it’s vital for healthcare organizations to check their patient’s medical records thoroughly in order to verify what service is most appropriate for their condition.

4.  Charge Capture

This part involves documenting the different types of services you provided your patient. It’s crucial that you’re always making an effort to avoid things like under-coding or over-coding, as these are common, but easily avoidable, errors.

Make sure your practice is making a note of all your services rendered in real time in order to properly charge capture.

5.  Coding

In order to be properly reimbursed for your services, it’s vital your medical coding is both accurate and using up-to-date codes to properly reflect the procedures the patient has received.

You can easily receive denials for incorrect code usage, so it’s worth outsourcing to a medical billing company that handles denial management and is well informed regarding the latest coding guidelines.

6.  Claims Submission

When taking on this important step of the revenue cycle, make sure you’re only ever submitting accurate patient data and service data in order to prevent slowing down the payment process.

7.  Claims Processing

Now that you’ve actually submitted the claim, keep an eye on it to see if there’s any rejections or denials so you can take instant action to resolve them.

8.  Payment Posting

Posting payments involves taking note of the payments you’ve received from insurance companies or patients. Make sure your practice is posting payments accurately and efficiently as well as tackling any discrepancies or underpayments.

Be vigilant here, as this step is crucial for proper revenue recognition.

9.  Denial Management

Managing denials is a critical part of your healthcare revenue cycle and as a healthcare provider you should be identifying the root cause of denials so you can take the right steps to appeal them. This can include everything from reviewing coding practices to verifying medical necessity, so make sure you cover everything.

10.  Accounts Receivable Follow-up

Following up on any outstanding accounts receivable is essential if you’re looking to increase the speed of your patient collections. Try to prioritize any follow-up efforts you make based on the age of the account and how likely they are to make the payment without any trouble.

There’s no harm in sending reminders or contacting patients directly too.

11.  Patient Collections

As mentioned, you should try and maintain communication with your patients when looking to manage payment collections. If they’re struggling to make payments for whatever reason, it’s best to chat with them about payment plans or even any discounts you can offer in exchange for prompt payments.

12.  Reporting & Analysis

Afterwards, it’s crucial you’re scrutinizing each of the 13 steps of revenue cycle management so you can identify any trends or areas for improvement. Keep an eye on key performance indicators like A/R days or denial rates so you can get an idea on where specifically would benefit from some development.

13.  Continuous Improvement

Finally, revenue cycle management is an ongoing process that requires continuous improvement. Healthcare providers should implement a plan to scan for areas for improvement in order to optimize financial performance.

This can include regular audits of coding and billing practices, staff training, and process improvements.

PMN

To make sure you’re adhering effectively to the 13 steps of revenue cycle management, consider PMN to improve your practice’s financial performance! Our medical billers and coders have a strong focus on reducing claim denials and submitting claims accurately and promptly, helping you receive faster claim reimbursement.

If you’re interested in finding out more, consider having a chat with one of our helpful support members today at our office in Laguna Hills, Orange County, California! Alternatively, you can contact us over the phone at (949) 215-5055.

FAQs

Why Is Revenue Cycle Management So Important For Small Medical Practices?

Aside from ensuring your practice receives swift payments from health insurance companies, effective revenue cycle management can help reduce the administrative workload on staff, freeing up time and resources for patient care.

What Are Some Common Challenges Small Medical Practices Face?

Streamlining your revenue cycle is no easy task, and you’ll often find small medical practices can struggle with:

     –  Navigating complex insurance billing and reimbursement processes 

     –  Managing large volumes of claims and denials

     –  Keeping up with changing regulations and compliance requirements

     –  Having limited resources for effective revenue cycle management