The healthcare revenue management method has been in operation specifically in the US for many years. The process manages the entire revenue generation of healthcare facilities. The cycle includes revenue production and tracking of patient bills, claim submission to insurance providers, and rectification of any objection made by the payer to get the reimbursement.
But ever wonder why most hospitals consider RCM systems as an essential component? The answer is that conducting healthcare operations with the help of a system organizes the cash flow and helps hospitals remove any inaccuracy that occurs during the process.
Here you’ll know the top advantages of healthcare revenue management systems. That will make you understand why this has become an essential part of the medical industry.
Steps Of The Healthcare Revenue Management Cycle
In general, there are around 10 steps in the medical revenue cycle management. Some health facilities also extend it to 13 stages. But to give a quick overview, here are 5 steps that thoroughly describe the entire healthcare revenue management cycle:
- RCM cycle starts with patient information collection and keeping its record by the hospital staff. Claim payments highly rely on this step, as any incorrect detail may lead to substantial revenue loss in the form of claim denial.
- When the treatment is completed, medical coders capture the charge for each health service taken by the patients. These codes help classify each health service. So that insurance payers know how much they have to pay.
- Once the bill is made ready by incorporating accurate codes, the claim application is prepared and sent to the insurance payer.
- Even after submitting the claim, the healthcare revenue management cycle is not done yet. Hospital staff has to maintain a proper follow-up on the applications. This way they can keep a record of paid and rejected claims and they can re-submit incomplete claims.
- When the insurance organization has paid the reimbursement, the remaining bill that the patient owes is sent. It is also essential to follow up on these payments to obtain revenue appropriately.
Introduction to RCM Systems
By improving financial procedures and maximizing revenue production, healthcare revenue management play a significant role. From patient registration to claim filing and payment collection, these solutions are made to manage the full revenue cycle. Let’s examine the meaning and goals of RCM systems, go through their essential elements and features, and highlight the benefits of putting such systems in place in healthcare organizations.
Purpose of these Systems
RCM systems are a collection of integrated software tools and procedures that make it easier for healthcare organizations to manage their financial operations. These systems’ main goal is to make sure that patient billing and claims are processed accurately and quickly, maximizing income while minimizing mistakes and delays.
Revenue cycle management (RCM) solutions automate a number of processes and workflows, freeing up healthcare providers to concentrate on giving their patients high-quality treatment.
Key Components and Functionalities of RCM Systems
RCM systems are made up of a number of essential parts and features that cooperate to enhance revenue cycle management. These consist of:
Patient Registration and Eligibility Verification
To ensure correct billing and reimbursement, RCM systems collect and retain accurate patient personal data as well as confirm insurance eligibility.
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Coding and charge capture
Healthcare revenue management systems make automated coding processes possible, ensuring that the correct codes are assigned accurately for procedures and services provided, preventing coding errors and maximizing reimbursement.
Processing and Submission of Claims
These systems automate the claim submission process by creating electronic claims and sending them to insurance payers, minimizing manual effort and enhancing speed and accuracy.
Denial Management
RCM systems also assist in locating and resolving claim rejections, allowing healthcare organizations to file claims as soon as possible and stop income leakage.
Payment Processing and Reconciliation
To ensure correct and timely financial transactions, RCM systems automate payment posting, manage unpaid balances, and reconcile payments with remittance advice.
Benefits of Adopting an RCM System
For healthcare organizations, implementing an RCM system has a number of benefits.
Its significance can be elaborated by the following 8 advantages:
1. Flawless Medical Coding
One of the major challenges that healthcare providers face is claim denials, which can lead to significant financial losses. Claim denials can occur for various reasons, but one of the most common causes is improper coding.
Besides, coding errors may lead to delayed payments and increased administrative costs for healthcare providers. This is where the RCM system comes in.
The healthcare revenue management system can help healthcare providers identify and resolve coding errors that may result in claim denials. By doing so, they can help ensure that healthcare providers receive payment for their services and avoid financial losses.
2. Minimized Effort
Healthcare revenue management systems require no proper supervision. The system itself conducts RCM tasks one by one, in a strategic way. This means that healthcare sectors can perform other tasks without struggling to get a claim application approved.
Once the RCM process is set up, it can be automated to a large extent, reducing the need for manual intervention and freeing up staff to focus on other critical tasks.
3. Low Fraud Risks
Potential fraud is a big challenge faced by health facilities during RCM. Fraud can lead to significant financial losses for healthcare providers and can also compromise patient care.
One of the ways the RCM system minimizes fraud is through patient eligibility verification. This process involves verifying a patient’s insurance coverage and determining their eligibility for the services provided. By doing so, hospitals can ensure that they are billing the correct insurance provider and that the services provided are covered under the patient’s plan.
4. Increased Revenue
Proper RCM can help ensure that the claim submission process is streamlined and efficient, with fewer technical issues. This can lead to timely revenue from payers, which can increase the financial strength of healthcare providers.
One way the healthcare revenue management system can reduce technical issues is by implementing a standardized process for claim submission. This can involve proper coding and billing practices, ensuring that all required information is included in the claim submission.
These systems also use technology solutions to automate and streamline the process.
5. Automation
Another great thing about RCM systems is that you can save your efforts. Automation reduces the burden when applied to any assignment. In healthcare revenue management, automation too has proven to be efficient. When you optimize your RCM and let the system complete the cycle, it yields better results than manual operation.
Health reports will be automatically created. No need to waste time preparing the reports while you can generate reports even when you are not operating.
6. Enhanced Patient Service
When all your payment collection and health charges recognition is streamlined, your staff will be able to provide exceptional health services to the patients. Not only your staff but also patients will get benefit from the RCM system. As their payments and medical bills will be paid electronically.
This way you can make your service the best in town, which will help you enhance your reputation.
7. Low Claim Denial Ratio
Healthcare revenue management systems offer the most error-free claim denials. These systems already know the claim accepting and rejection ratio, based on which each of your claims is made error-free by the system before submission.Â
Additionally, where manual claims double the chances of containing mistakes, systematic claim submission guarantees a much less denial rate than manual ones.
These systems also help you keep records of your claims. So you can better have an idea of what mistakes lead to rejection and how to avoid it.
8. Save Training Efforts
Since each hospital operates differently, there is a training period that your facility has to spend. You have to educate your staff about RCM and make them skilled enough to perform healthcare revenue management. It takes much of your time and financial resources as well.
But with the help of an RCM system, you can save yourself from spending additional resources on hiring staff and educating them. Even your trained staff might perform some mistakes that result in huge revenue loss. Revenue management systems handle all those functions and complete the RCM with full accuracy.
Supercharge Your Medical Billing
As you can see healthcare revenue management systems provide these considerable benefits, start using this procedure in your medical billing today. Don’t put your revenue at risk and make use of RCM systems to automate and streamline your operations.