The best healthcare revenue cycle management (RCM) systems keep money flowing to providers and information flowing to patients. When it comes time for healthcare providers to choose RCM partners, there are distinct factors to consider that set the best RCM solutions apart from middling systems in the healthcare industry.
Providers wondering what to look for in an RCM partner should ask themselves the following:
- Does this partner have a customized/customizable strategy?
- Is this partner totally transparent?
- Does this partner possess a comprehensive understanding of the marketplace?
- What is the partner’s denial management strategy?
- What is the partner’s ROI?
Read on to learn more about each of these factors in-depth.
Revenue Cycle Management: The Basics
Healthcare revenue cycle management is the system that identifies, manages, and collects payments from payers and patients for services rendered by a provider. The RCM system kicks into gear the moment a new or returning patient schedules an appointment with a provider.
The life cycle of a claim can be complex, especially if errors are made at any point in the process. In order to keep patients happy and coming in the door and to make payments to payers, providers need to implement a seamless RCM system.
The typical revenue cycle management steps looks like:
- Patient pre-registration – When a new patient makes an appointment with a provider, a thorough, correct patient account needs to be created. This account should contain all the patient’s pertinent personal information, medical history, and insurance details. If a patient’s insurance is not accepted by the provider, this needs to be cleared up immediately, otherwise complex claims denials will bog down the system later on.
This step also includes patient access, which boils down to: the easier it is for a returning patient to access their own information and scheduling history, the more likely it will be that they’ll frequent this provider.
- Claim creation – Once a patient has been seen by a provider, a claim is created. This claim contains information about the patient, the provider, and the services rendered at the appointment. All medical procedures are then translated into ICD-10 codes by providers.1 These codes are used for a variety of reasons, including statistics and claims reimbursements.
- Claim submission – Claims are submitted (typically electronically) either directly to payers or through a third-party clearinghouse. This third party will translate the claim into whatever format the payer prefers (this differs vastly from payer to payer).
- Claim processing – Once a claim has been processed, the provider will learn whether their claim will be paid in full, partly remitted, or denied completely. This denials management stage will be key when considering RCM partners.
- Final payments and statements – The end of the claim cycle includes sending a statement to the patient outlining whatever out-of-pocket costs they still need to pay after insurance has covered all or part of their bill.
Top RCM Partner Factors to Consider
Healthcare providers’ RCM partners must be forward-thinking and flexible so that they can best adapt an RCM solution to the ever-evolving healthcare organization landscape.
More and more transactions take place electronically, and technology is allowing more and more providers to enter data into one, easily accessible control center. But this doesn’t mean that providers can sit back and let computers handle the delicate RCM process.
Read on to learn more about what providers should look for—and come to expect—from the top RCM partners on the market.
#1 Customized strategy
The best RCM partners will be able to implement a model that best suits the provider—strategies in the healthcare field are not one-size-fits-all. This means that if a provider has plans to expand, their RCM partner should be able to grow with them.
RCM partners should be able to grasp the nuances of different providers. This may involve dissecting the providers’ current system and suggesting upgrades, or determining how best to work within the framework of an imperfect system.
Potential partners should be able to prove to providers that their RCM model can interface with all provider systems, and if anyone on staff needs training to best execute the new revenue model, partners should be able to offer assistance.
#2 Trust & Transparency
It may be difficult for providers to allow RCM partners to get their hands into all of a facility’s sensitive financial records. Finding a partner you can trust is essential, as you will have to step back and let your partner access any and all information related to the revenue cycle.
When shopping for an RCM partner, it’s also important to consider whether they can provide data in real time. This kind of visibility will help providers spot widespread trends and potential issues within their own system.
Another facet of transparency is clarity—will this RCM partner present the provider with easy-to-understand data, or complex jargon that will put even more work on the provider’s already shrinking plate?
#3 Understanding of the marketplace
As the fee-for-service model has continued to shift to a value-based care payment model, providers and their RCM partners need to rethink their revenue systems.2
Strong RCM partners will have a fundamental understanding of this shift, as well as an understanding of RCM terminology, various payer rates, and regulations.
When choosing an RCM partner, providers should look for the same level of expertise they expect when bringing on a new healthcare professional.
RCM partners should understand the healthcare system and the complexities of the billing process and compliance—providers should expect a lot from potential partners on this point.
#4 Denial management strategy
Unsettled financial transactions can be deleterious to a provider’s revenue cycle, and ultimately to their business as a whole.
Grappling with denials is the bane of all billers, which is why finding an RCM partner with denial management acuity is so important.
Claims can be denied for details as minute as a patient’s name being misspelled or an ICD-10 code being entered incorrectly. In fact, the American Hospital Association found that 43 percent of hospitals spent more than $10,000 in the first quarter of 2016 to manage claim denials.3
Strong RCM partners should be able to understand and address why claims are being denied—is there a trend that continues to take place on the payer or provider end? The best RCM partners will manage these denials so that the provider can increase revenue.
#5 Return on Investment
How quickly can your potential RCM partner deliver financial results? Time is money, so finding an RCM partner with a proven track record of turning around billing and payments in a short time frame is crucial.
Providers—especially smaller providers with tight budgets—who choose to invest in an RCM partner need this partner to prove their revenue cycle management vendors are worth whatever the provider is paying them.
Negotiate the Best Payer Contracts with Healthcents
The healthcare revenue cycle management system is the backbone of all providers.
Implementing and maintaining a strong RCM system with the help of a competent and forward-thinking RCM partner is critical when it comes to maintaining the financial health of any provider. From total transparency to proven ROI, there are key factors to consider when choosing the best RCM partner for your business.
No matter how efficient your RCM partner is, though, if you are saddled with unfavorable payer contracts, your business will suffer. Third party contract management firm Healthcents can help your facility negotiate and sign better contracts, setting you up for success as you secure the best rates with payers.
- CDC. Internal Classification of Diseases. https://www.cdc.gov/nchs/icd/icd10cm_pcs_background.htm
- Becker Hospital Review. Fee for Service vs Value Based Care. https://www.beckershospitalreview.com/finance/fee-for-service-vs-value-based-care-6-points-of-debate-raised-by-health-policy-experts.html
- Revcycle Intelligence. What is Healthcare Revenue Cycle Management? https://revcycleintelligence.com/features/what-is-healthcare-revenue-cycle-management
- Healthcare Financial Management Association. Delivering Scalable, Patient-Focused Revenue Cycle Management Services. https://www.hfma.org/topics/hfm/2020/september/delivering-scalable-patient-focused-revenue-cycle-management-services.html
- Healthcare Innovation. Rethinking RCM Strategies in an Evolving Payment Landscape. https://www.hcinnovationgroup.com/finance-revenue-cycle/revenue-cycle-management/article/21044750/rethinking-rcm-strategies-in-an-evolving-payment-landscape