Importance of Revenue Cycle Management in Healthcare Industry
Revenue cycle management (RCM) can be defined as the process of handling claims, processing payment and generating revenue in the healthcare industry. It begins just at the time when a patient makes an appointment and continues till the balance on his account becomes nil. It includes various steps like checking patient insurance eligibility and coding claims.
Benefits of Revenue Cycle Management (RCM)
• A well-designed RCM system tracks patient care simplifies the billing and collection cycles, by registering, appointing, scheduling and processing the payment.
• With the help of RCM, communicating with the EHR and accounting systems becomes easier.
• Revenue cycle management links administrative data like a patient’s name, insurance provider and other personal information along with the treatment received by a patient.
• It bridges the gap between the business and clinical sides of healthcare.
• Healthcare providers take help of revenue cycle management systems for preserving and managing patients’ billing records.
• It reduces the time between offering a service and receiving payment for it by interacting with other health IT systems like electronic health record systems and billing systems.
• It enables the RCM system to perform duties automatically. As this was previously handled by employees, RCM has been able to save healthcare practices time.
• RCM is responsible for all administrative tasks including informing patients of an upcoming appointment, reminding payers and patients of an existing balance and questioning insurers, when a claim is denied.
• It save providers money by reducing the amount of denied claims and enabling patients to pay their bills online.
• It allows healthcare staff to enter all the information required for claims processing, and avoids the revision or resubmission of claims.
• With the help of RCM, an organization can buy analytics software and use dashboards to determine or analyze revenue goals.
- The organization can also check where its revenue cycle has the scope of improvement by arranging billing data and producing corresponding reports.
How Does a Revenue Cycle Management (RCM) Work?
Communicating with health insurance companies is an important aspect of RCM. When a patient books an appointment, the healthcare center typically checks the patient’s described insurance coverage before the visit.
After an insured patient gets diagnosed, he supplies applicable copay. A healthcare provider or coder classifies the nature of the treatment as per the ICD-9 or ICD-10. The hospital submits the care summary with ICD and Current Procedural Technology codes to the patient’s insurance firm to see the procedure of treatment covered by insurance.
In The End
The revenue cycle management (RCM) system can make or break a hospital or physician practice. Hence, Revenue cycle management should be selected very wisely.