Revenue Cycle Management and Why It is Important for Physicians
For practitioners, billing cycle efficiency is as important as delivering quality patient care.
Nothing “hurts” a medical provider more than a service rendered that never get reimbursed.
Getting paid is the goal, unfortunately, it is not easy.
Physicians graduate medical school as trained medical professionals, business management isn’t necessarily a skill they inherit from all those years of education.
Enter Revenue cycle management, the primary role of which is to ensure the financial well being of a medical practice.
Often confused with medical billing, it is in fact, a system employed by most healthcare organizations to manage the entire process, right from the moment a patient makes his initial appointment to the moment an insurance payer reimburses the healthcare organization for the services provided.
Making Ends Meet
Revenue Cycle Management can be broken down into small sub-sets, each requiring different skills.
Everyone in the administrative team is involved in each of these steps.
The process begins at front-desk, moves to medical coders and then to A/R management staff.
Although not advisable, small practices still manage all the functions themselves, for bigger practices, a third-party Revenue cycle management expert is often a necessity.
Following is a brief about the various steps involved in a Revenue management system.
The steps are universally applicable with an exception of one or two depending on the size and nature of the practice.
Scheduling and Patient Registration, How it all begins:
A patient calls a practice to schedule an appointment.
Revenue cycle management begins at that, effective management at this stage eliminates problems down the line.
Front desk staff is responsible for procuring the details of the patients such as DOB, address, sex and phone number. In case of a new patient, the information is collected and a patient chart is generated, for old patients, the records are updated.
Why this matters?
A good percentage of insurance denials are because of problems with demographics, Clerical errors are still the major cause of insurance denials.
Clerical staff needs to be skilled, adept at handling both new and old patients.
Insurance eligibility and verification:
Physicians need to make sure the services rendered by them are covered by the insurance payer, it also helps to determine the patient’s share of the charges incurred.
New patients are checked for their insurance eligibility, a process that can be accomplished on payer websites or on the phone.
The insurance eligibility is confirmed along with the coverage plan opted by the patient.
For old patients, any change in details are accounted for and pending payments are recorded.
Once again, it’s the responsibility of front desk to ensure verification is done before any services are provided to the patient. Both Patient registration and verification constitute the first step in Revenue cycle management.
Examination and documentation:
Once the details are obtained, the patient examination is performed, the services rendered are documented.
Certified coders make note of the services and once all the documentation is completed, the patient is discharged.
Coding and Charge Capture:
Part of the documentation process, the services rendered are documented in compliance with the current ICD regulations.
CPT (Current Procedural Terminology) and ICD (International Classification of diseases) are protocols for the services and the diagnosis provided by the physician.
Both the diagnosis and services are documented under separate ICD and CPT codes.
Physicians get reimbursed based on the codes they document, the codes become a standard of payment for the insurance payers.
Coding is also a crucial step a Revenue Cycle Management system, incorrect codes lead to insurance denials right away.
It is imperative that a certified staff takes care of the coding process.
Claims Submission:
The patient data, diagnosis and service codes all are combined to form a superbill that is then submitted to the insurance company. If the claim is approved, the practice will receive the payment form the insurance payer.
Coding and claim submission are parts of claim processing, once a claim is sent for review, the insurance payer processes it, depending on the information provided the claim can be approved or denied by the payer.
The payer can deny paying for claims because of many reasons.
Denial management is an important part of Revenue cycle management because on average, 30% of the claims get denied. The percentage of denied claims is even higher for certain payers.
Managing these denials becomes important for physicians since the backlogs of denials keep piling up, claim after claim.
The backlogs can become a serious problem over time as the cash flow gets halted.
Denial needs to be acted upon quickly.
Claim information has to be sent correctly to begin with, front desk staff, medical coders need to ensure clean claim submissions, still, if the payer denies, an optimum time window to act on it is 3 days.
A relentless follow-up ensures speedy claim processing and timely payments. Once a claim is filed, claim submissions are confirmed with payers and a regular follow-up is done on the current status of the claim.
On an average, 15 billion claims are filed each year, delays in processing lead to A/R increase and many physicians never follow up. Neither on denials nor on pending claims.
In an effective revenue cycle management system, A/R is constantly monitored, regular follow-ups ensure A/R stays low and a steady cash-flow is maintained.
Payment Received/Collections:
Once the claim is approved, Physicians are reimbursed for the services provided marking an end to the payment cycle.
A regular cash-flow is necessary for any business, medical practices are no different.
In the absence of a system in place, physicians simply end up providing more without any assurances of a payout later.
This is further complicated by the fact that insurance payers do not reimburse right away, as such, a steady cash inflow ensures a practice is able to sustain its operations.
Effective Revenue cycle management can take medical businesses a long way, the competition for private practitioners grows day by day and practices have evolved to not only manage the processes effectively but cut down on overheads costs as well.
Our blog resource is filled with such articles on how to save overheads and bring down operation costs, you can read about them here.
Revenue cycle management is necessary and in the right hands can save you the money and time.
It deals with the business side of a practice.
Delivering quality care is pivotal but the series of small steps ultimately leading to being paid is also necessary for the business to sustain itself.
Bikham has been the pioneer at providing end to end Revenue cycle management services to physicians all across The United States.
Our comprehensive solutions have helped physicians dramatically increase their cash collections and bring theirs pending A/R down.
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