For healthcare professionals, delivering high-quality, patient-centric care is easier said than done. Its complexity depends on the fact that you have to juggle a variety of critical business processes that are indirectly related to care provision. Among these, none are more critical than revenue cycle management.
Put simply, the efficient management of the revenue cycle is the lynchpin to an organization’s ability to deliver value-based care. It could mean the difference between success or failure.
This is why many healthcare providers are outsourcing revenue cycle management to specialist vendors.
With the right RCM partner, such as Healthcents, you could reduce clinical costs while improving the patient experience.
What is Revenue Cycle Management?
RCM is the process healthcare providers use to keep track of every patient’s case throughout the relationship.
The billing cycle begins the moment a new patient walks into your clinic. Along the way, you must verify insurance coverage, determine copayments, send claims with specific codes, and bill for the remaining balance.
The complete cycle contains many critical—yet time-consuming—revenue cycle management steps and rcm terminology, including:
- Pre-registration – Collecting pertinent patient information, particularly about insurance coverage, prior to arrival.
- Registration – Collecting all other relevant patient payment information required by regulations to establish a medical record number.
- Charge capture – Converting medical services into billable charges.
- Claim submission – Submitting billable claims to insurance companies.
- Coding – Coding diagnoses and procedures according to ICD or CPT procedures.
- Patient collections – Identifying what patients owe after insurance has paid its part and then collecting payments.
- Remittance – Applying or rejecting payments via remittance processing.
- Third-party follow-up – Gathering payments from third-party insurance providers.
- Utilization review – Determining a patient’s need for medical services or interventions.
From registering patients to seeking reimbursements, the purpose of revenue cycle management is to automate and centralize all of this client data. In doing so, you optimize the various administrative and clinical functions tied to claims processing, payment, and revenue generation.
For optimal revenue cycle management, it’s especially important that the initial data gathering processes are conducted thoroughly and accurately. As RevCycle Intelligence notes,1 “Successful healthcare revenue cycle management strategies focus on front-end tasks to help claims move along. Many errors occur in the first stages of a patient’s account, and these issues can carry through the revenue cycle to disrupt claims reimbursement.”
Why Outsource Revenue Cycle Management?
To say that managing the entire revenue cycle management process is difficult would be an understatement.
Simply having enough capable employees on hand to cover the various processes of the revenue cycle may be a strain on your resources. But it becomes an even more daunting task when you also have to account for compliance and the ever-changing rules and regulations governing the healthcare industry.
Hospitals are recognizing that prioritizing revenue cycle management optimization is a necessary step to deliver value-based care. But hiring new employees or overhauling workflows may be cost-prohibitive and resource-intensive.
There’s no doubt that you may be more than capable of improving your revenue cycle management internally. But is that smart resource allocation?
Craig Jones, CFO of District Medical Group had this to say:2
“We’ve always done this [revenue cycle management] and we’ve done well with it, but going forward, should we really be spending our executive-level time on the business office, worrying about where we find more coders, how we get billers to work well, and what about the charge capture? Is that really the best use of our time, or is the best use of our time focusing on growing the providers and the physician practice?”
By outsourcing to professional revenue cycle management vendors, you can create efficiencies in your practice. It allows your medical practice to focus on what they do best, while experts handle the processes that align with their skill set.
RCM Outsourcing Helps Optimize the Revenue Cycle
The revenue cycle is a long process fraught with errors, frustrations, and complications. Hiring an outsourcer could fix such issues, streamlining operations by relieving many of the pressure points within the revenue cycle, including:
- Billing and Collections Errors – Errors in billing make it difficult, if not impossible, to ensure accurate and timely collections from patients. Still, errors account for a significant majority of the issues within the entire revenue cycle management process. An outsourced RCM platform helps eliminate many of the common human-errors involved with data input, including:
- Leftover billing
- Balance billing
- Duplicate billing
- Mismatched diagnoses codes
- Incorrect patient information
Your vendor can simplify billing and collections, ensuring that everything is accurate and your billing cycle is optimized.
- Denial management – Denials are usually the result of errors in medical billing codes, incomplete patient information, or questions surrounding the patient’s coverage. And according to Becker’s Hospital Review, 86% of them are potentially avoidable.3
For staff, following up on denials can be a time-consuming and often fruitless affair. But a premier RCM partner can boost the efficiency of your claims management in several ways, including:
- Instilling a denial management strategy
- Reducing the total number of denials thanks to more accurate data input
- Following up on denied claims
- Charge capture – Charge capture is central to the entire medical billing lifecycle. Prices for services must be continuously updated, otherwise the medical bill could be inaccurate. An RCM vendor can integrate an automated charge capture system that ensures that you have up-to-date and error-free billing information.
- Coding errors – The industry’s compliance standards are subject to rapid changes each year. This makes it difficult to code precisely and accurately according to ICD or CPT. As a result, one of the most common problems with in-house RCM comes down to coding errors. By outsourcing to a qualified vendor, you can avoid resubmissions or denials caused by these issues. The automated systems can review a claim before it’s submitted and then prevent its submission if errors are detected.
- Lack of internal resources – Many healthcare providers don’t have enough employees who are familiar with every aspect of the revenue cycle. If you don’t have the proper infrastructure in place, your RCM efficiency will inevitably drop. But with an RCM partner handling day-to-day RCM activities, you can operate efficiently with less staff.
Benefits of Outsourcing Revenue Cycle Management
To deliver outstanding care, you need to be able to focus entirely on your patients. You don’t have time to stay up with the compliance rules or the various minutiae surrounding the revenue cycle. Outsourcing removes these distractions from your slate and helps with:
- Ensuring timely reimbursements
- Reducing billing errors
- Shrinking the total number of claims denials
- Handling the claims denials that do occur
- Improving cash flow
- Maintaining regulatory compliance
- Optimizing reimbursements
- Following up with accounts receivable
- Streamlining operations
All in all, these actions contribute to increasing revenue, reduced costs, and fewer capital expenditures.
Questions to Ask an RCM Outsourcer
You must work with the right RCM partner—one you can trust to handle all aspects of the revenue cycle. To find that perfect fit, it helps to ask pertinent questions like:
- What is your denial management strategy?
- Do you offer training during the onboarding process?
- Will you be able to alleviate the major revenue challenges? How?
- What does your pricing model look like?
- What KPI do you track to ensure that our organizational goals are being met?
- Do you provide dedicated account managers who are easily accessible and able to resolve issues quickly?
By taking the time to get to know each potential RCM vendor, you can determine whether they are an ideal match.
Outsourcing Revenue Cycle Management
To deliver high-quality, patient-centered care, there should be a healthy balance of handling your front and back end of the practice. Partnering with an RCM vendor makes it possible for you to create efficiencies. Put simply, it’s the solution for enhancing patient care, improving cash flow, and boosting your bottom line.
Have you been wondering what to look for in an RCM partner? For more information, contact us at Healthcents today.
- RevCycle Intelligence. What Is Healthcare Revenue Cycle Management? https://revcycleintelligence.com/features/what-is-healthcare-revenue-cycle-management
- RevCycle Intelligence. Best Practices When Outsourcing Revenue Cycle Management. https://revcycleintelligence.com/features/best-practices-when-outsourcing-revenue-cycle-management
- Becker’s Hospital Review. 86% of denials are potentially avoidable: Strategies to better prevent, manage denials. https://www.beckershospitalreview.com/finance/86-of-denials-are-potentially-avoidable-strategies-to-better-prevent-manage-denials.html