Optimized revenue cycle management is a set of processes that help hospitals and healthcare businesses better manage their income.
In a nutshell, it involves collecting customer payments, disbursing payments to vendors, and reconciling invoices. By implementing proper processes, healthcare companies can effectively weigh their business's financial performance and make intelligent decisions that give them a competitive edge in their industry. By automating specific functions such as billing and collections, companies can streamline operations and minimize costs while ensuring accuracy and transparency.
Definition of Revenue Cycle Management
Revenue cycle management manages all activities related to collecting and disbursing funds from customers and vendors. This includes invoicing, payments, collections, accounts receivables, accounts payables, reconciliations, and financial reporting. Revenue cycle management aims to improve a healthcare business's cash flow by streamlining processes and providing accurate financial information. Additionally, it helps ensure accuracy by eliminating manual processing errors.
Benefits of Revenue Cycle Management in Healthcare
There are several benefits associated with incorporating an organized revenue cycle management plan for healthcare organizations. First, implementing a successful revenue cycle management plan includes accurately completing front-end tasks to ensure claims get paid following their original submission. Insurance verification, accurate patient information, and proper coding during patient intake can save time and ensure payouts are handled correctly, mitigating repeated tasks.
Of course, another benefit of revenue cycle management in healthcare is increased practice collections and revenue overall. With a system in place, RCM can help uncover claim denial patterns. By recognizing these patterns, practices can work to avoid claim denials in the future so that they can receive timely reimbursement.
Having an RCM plan in place can also help save time and money in correcting errors and appealing claims. This allows practices to put more time and money into the quality of care they provide. Revenue cycle management can help providers transition to value-based reimbursement practices instead of traditional fee-for-service practices. With a greater focus on patient outcomes, patients can expect to receive more comprehensive and targeted healthcare, reducing their likelihood of re-admittance.
Impact of Covid-19 on Revenue Cycle Management
The COVID-19 pandemic has significantly impacted revenue cycle management for healthcare. With the decrease in patient visitation, providers have been forced to modify their billing and payment processes to accommodate the new environment. With more patients seeking treatment through telehealth services, providers have to adjust to virtual payment processes and implement additional coding and documentation requirements.
Additionally, providing flexibility in payment options is vital due to the financial concerns that many hospitals and health systems face due to lost revenue caused by canceled elective procedures. As a result, providers must keep up with changing regulations while utilizing best practices for collecting payments from insurance companies, government payers, and patients promptly.
Challenges and Best Practices for revenue cycle management in healthcare
Some of the challenges facing healthcare providers concerning revenue cycle management include increasing patient responsibility, dealing with complex coding, managing denial volumes and denial resolution, and improving patient collections. Additionally, providers must continue to adjust to the rapidly changing regulations due to the COVID-19 pandemic.
All of these put pressure on administrative staff that is responsible for scheduling appointments, establishing or updating patient information, and verifying their insurance. With a revenue cycle management system in place, these front-end tasks are streamlined so that administrative staff can work more efficiently and focus on what they do best.
Best practices for improving revenue cycle management in healthcare involve streamlining processes such as automated claim submissions and eligibility verification, ensuring accurate coding and billing processes, employing patient payment estimator tools, automating payment plans, implementing a self-pay system, providing online bill payments and engaging in open dialogue with insurers. Providers should be proactive when it comes to understanding changing regulations and reimbursement models so that they remain compliant.
Advata can help you with healthcare revenue cycle management now. Our technology can automate your business workflows to keep costs down and improve revenue cycle performance. And we go beyond just that. We leverage our advanced analytics to continuously learn from your data, drive insights, and help you address your most pressing RCM issues. We’ve developed an eBook for you and your team to streamline revenue cycle management to help you become familiar with it. We’re here to discuss solutions to help you transform your revenue cycle.