Revenue cycle management (RCM) is the financial method that use medical billing technology to manage the functions associated with claims processing, payment, and revenue generation. It also helps healthcare facilities to keep track and maintain patient care records from registration, appointment scheduling to the final billing.
Healthcare revenue cycle management
RCM manages the financial process by combining the administrative data such as patient's details, insurance details, patient history records of treatment etc. Healthcare revenue cycle management is the procedure that healthcare organizations use to handle the bills. Without RCM the key financial process, healthcare systems cannot have their doors open to treat patients.
Interacting with health insurance firms is a key element of RCM. As a part of RCM, the physician, hospital staff or front end staff check the patient information about insurance coverage when the patient schedules an appointment. Once the insured patient receives the treatment and provides any applicable copayment, a healthcare provider or coder updates the type of treatment provided according to ICD-10 codes. Then hospital sends the care summary with ICD and Current Procedural Technology codes to the patient's insurance company to check what part is covered by the insurance company and the rest is billed on patients.
Revenue cycle
According to the Healthcare Financial Management Association (HFMA), the revenue cycle covers all the regulatory and clinical duties that combine with the management and collection of patient service revenue.
Here is what's included in the revenue cycle:
- Charge recovery: Providing medical assistance into billable costs.
- Claim submission: Submitting claims of billable fees to insurance companies.
- Coding: Correctly coding investigations and procedures.
- Patient collections: Managing patient insights and managing payments.
- Preregistration: Managing preregistration information, such as insurance coverage, before a patient comes for inpatient or outpatient procedures.
- Registration: Managing subsequent patient information during registration to build a medical record number and reach various regulatory, financial and clinical conditions.
- Remittance processing: Using or rejecting payments through remittance processing.
- Third-party follow up: Collecting fees from third-party insurers.
- Utilization review: Considering the lack of medical services.
Factors that challenge the revenue cycle
Many internal and external factors affect how revenue is managed. A healthcare system can handle any control over internal dynamics, such as provider productivity, patient volume and service fees. However, it is more challenging to control external factors, such as patient payments or claims from insurance companies.
