The success of any business depends on several factors, including its ability to manage revenue. It’s through revenue management that a business ensures that it’s making enough money to meet all its expenses. Therefore, Revenue Cycle Management optimizes the process of healthcare practice management.
RCM plays a crucial role in the healthcare system. It helps protect your cash flow through medical billing, uses medical coding to represent your work, and helps enlarge your network via managed credentialing. Also, RCM solutions can help you stay on the right track through AR Cleanup.
In this article, we will cover important information about the importance of RCM solutions to the healthcare system, what’s RCM, and how Revenue Cycle Services enhance operations in the healthcare sector.
What’s the Meaning of Revenue Cycle Management?
RCM involves handling, processing of payments, and collection of revenue. The revenue cycle is a recurring process that starts with billing and ends by collecting payments from a patient or clearing the bill. However, in some organizations like retail stores, this process is simple and is concluded instantly, unlike in the health sector.
Revenue cycle management ensures that your health practice has a solid foundation of incoming revenue in the form of cash to enable you to meet all your expenditure.
How Revenue Cycle Services Enhance HealthCare Practice Operations
RCM solutions are not only central in other businesses, but they optimize the success of the healthcare organization. Let’s look at what’s included in the health business revenue cycle;
Claim preparation; the information of a patient is collected prior to submitting a claim. The information is captured before scheduling the patient’s first appointment. But for anesthesia providers, patient details are collected on the day of the surgical procedure. Also, the insurance coverage and patient’s eligibility ought to be verified.
Claim Submission; this stage involves creating the claim, entering the charges, and coding after which the claim is sent to the patient’s insurance company.
Claim management; this is the stage where one follows up an insurance company response. Also, appropriate payments are posted during the claim management step.
Receivable collection; It is at this point when any relevant payments from the patient are collected. It’s all about issuing statements and submitting the bill to collections.
Data analysis and evaluation; this is the last stage. The billing stakeholders collect and evaluate RCM software data.
Essentially, RCM systems are crucial as they reduce errors in the health practice system to ensure that payment is made, not to mention that it helps evade aging accounts receivable. Furthermore, it optimizes the efficiency of claims and reconciles costs and revenues to enhance uninterrupted cash flow.
Why are RCM Solutions Important to the Healthcare System?
Handling billing, payment processing, and collecting revenue processes is complicated, especially in the health practice. Without an effective RCM, there could be a delay in service provision and collection of payment. Worse still, mistakes and confusion could occur.
Therefore, every hospital should have an effective RCM. Making mistakes after including patient’s data in the revenue cycle could trigger serious legal consequences. Applying revenue cycle management reduces the chances of making any errors.
Finally, consider outsourcing your health practice physician RCM to a skilled third-party provider. By so doing, you’ll enjoy such benefits as greater visibility, improved value, simplified processes, and better revenue performance.