13 Important Steps in Revenue Cycle Management
You are looking to streamline your healthcare management system, right?
Well, that’s why you’ve stumbled upon this post, looking on to know about a dedicated solution, i.e., “Revenue Cycle Management.”
We all are undoubtedly well-aware of the term, aren’t we!
In layman’s words, it’s the method that healthcare systems employ to track revenue from patients from their first visit or engagement with the system through their final payment of the balance owed.
So, what’s the need? Why should we have to have it in our healthcare system?
Let’s understand!
Even for hospitals that use the right management tools, this may be a very complicated and time-consuming procedure that involves a lot of data being threaded through multiple medical departments. As a result, obtaining the most accurate data is vital to effective management.
And there’s nothing better than RCM to handle the burgeoning healthcare issues!
Important Facts & Statistics About Revenue Cycle Management
Here’s the list of the vitals you must know about revenue cycle management:
- In 2021, the software sector dominated the revenue cycle management market, accounting for 66.4 percent of total revenue.
- The global revenue cycle management market was worth USD 243.1 billion in 2021, and it is expected to increase at a CAGR of 11.6 percent from 2022 to 2030.
- Approximately two-thirds of healthcare firms outsource revenue cycle management solutions and services, according to a Med USA article published in 2020.
- There are several key participants in the revenue cycle management market, including Allscripts Healthcare Solutions, Athenahealth, Cerner Corporation, and others.
- COVID-19 has no significant negative influence on market growth and is predicted to create several chances for market expansion during the projection period for revenue cycle management.
Market Scope of Revenue Cycle Management
| Report Attribute | Details |
| Market Size Value in 2022 | USD 273.9 billion |
| The revenue forecast in 2030 | USD 658.7 billion |
| Growth Rate | CAGR of 11.6% from 2022 to 2030 |
| Segment Covered | Product, type, delivery mode, end-use, region |
| Key Companies Profiled |
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COVID19 Revenue Cycle Management Market Impact
| Pandemic Impact | Post COVID Outlook |
| From 2019 to 2020, the revenue cycle management market increased at an annual pace of 18.4 percent. | In the next five years, the market is expected to grow at a CAGR of 12.26% in the next five years. |
| The Covid-19 outbreak drove governments to institute lockdowns and travel restrictions, resulting in patient volume inconsistency and claim volume uncertainty. The increasing complexity of RCM has had a favorable impact on RCM solution outsourcing. | The adoption of virtual engagement technologies such as telehealth, as well as the transformation of healthcare systems toward value-based care, are expected to pave the way for future growth prospects for RCM. |
| Increased strain on RCM professionals and personnel caused by escalating claim denials, continually changing Covid-19 regulations and the establishment of new codes. In addition, the abrupt adoption of remote working resulted in a decrease in inefficiency. | The focus of key participants is on developing automated RCM solutions that include advanced artificial intelligence and machine learning algorithms, which are expected to improve process efficiency and productivity. |
13 Steps Involved in Revenue Cycle Management
With that in consideration, here’s a step-by-step guide to managing the healthcare revenue cycle in 13 easy steps:
Step 1: Outsourcing Processing or RCM Software
The first phase in the cycle is deciding how to handle your processing. What is the size of your medical practice?
You may want to install RCM software on your servers if your scope is pretty small and you have a solid IT team in place as well as people who are well skilled in using dedicated software for medical billing.
However, if you run a larger firm, one with several physicians spread across multiple satellite locations, outsourcing the procedure to third-party professionals may be the best option. Outside help will also be advantageous for practices with little RCM experience, allowing them to concentrate on their core competencies in inpatient treatment.
Step 2: Scheduling
Scheduling is an important aspect of the revenue cycle that, when optimized, will ensure that revenue is generated while allowing healthcare practitioners to provide high-quality care. Prior authorization regulations, cumbersome processes, and long hold times have a negative influence on patient satisfaction and physician referrals.
Considering the convenience of the patients and being flexible in arranging the patient appointment might help you reduce no-shows while still earning good revenue. The patient is involved via online portals and effortlessly maintains the schedule to minimize excessive wait times thanks to streamlined scheduling and automated reminders for emails and messages.
Step 3: Patient Pre-Authorization
The pre-authorization of each patient is the next step in Revenue Cycle Management. The US government defines pre-authorization as health insurance or plan’s determination that a prescription drug, procedure, service, or equipment is medically required. Pre-authorization would be waived in the event of a medical emergency.
It’s vital to remember that pre-authorization for a surgery or prescription does not always imply that the insurance will pay for it. If there is any doubt regarding coverage, patients and clinicians must double-check.
Step 4. Eligibility & Benefits Verification
Checking on eligibility and benefits for patients is one of the drudgeries of your front office employees. It can be a tedious and time-consuming process over the phone, resulting in low staff morale.
Automatic checking of patient eligibility via the Internet over secure channels will be included in modern medical office software, implying using dedicated RCM software.
It has a track record of accelerating the confirmation process for determining whether or not a patient is eligible for a positive effect.
Step 5. Charge Entry and Capture
In medical billing, charge entry refers to the process by which healthcare professionals enter information about their various services to patients and then send the costs to insurance companies. This is an important revenue cycle management metric because it ensures that hospitals obtain full reimbursement from their payers. This can be termed Revenue integrity.
Step 6: Coding: Properly coding diagnoses and procedures
Given a large number of health services and drugs accessible today, coding is required to convert written descriptions of operations, services, goods, and patient situations into numeric or alphanumeric codes.
While these codes have no bearing on the patient, they do assist hospitals in creating a procedural map. These codes are then used by medical billers to establish insurance claims and bills for patients.
Step 7. Claim Submission
One of the most important processes in medical billing is the submission of medical insurance claims. The hospital will submit the claims to the insurance companies during claim entry so that the payment can be transferred according to the contract’s terms.
If there are any errors or other issues with the claim submission, payment processing will be delayed, and the health care providers will not get the claim amount.
Step 8: Remittance Processing:
The hospital’s accounts receivable personnel examine the payment received from the insurance provider or payer to see if it was approved or if there was an issue that caused the payment to be delayed.
Rejected payments are frequently the result of errors in patient registration, which emphasizes the need of ensuring that the data is accurate and up-to-date. If an error is reported, the claim is submitted to the clearinghouse, which is responsible for examining and clearing the claim before sending it back to the payer for the right payment amount.
Step 9. Denial Management
How frequently are claims for services performed outside of your facility denied? If your quarterly statistics reveal a drop in revenue due to a high number of refused claims, it’s time to look into it. If money has been tardy recently due to improper claims, properly implemented denial management will, in the end, enhance earnings.
Incorporating rejection management into your cycle might help you recover revenue that would have otherwise gone unnoticed due to wrongly submitted insurance. You might notice patterns, such as more denied claims when particular personnel work together (or aren’t working as hard when they’re on the same shift), billing issues for specific procedures or members of your patient demographic.
Step 10: Insurance Follow-up
Did you know?
According to the American Medical Association (AMA), one out of every five claims is processed incorrectly, leaving the healthcare business with an accuracy rate of only 80% in processing and paying claims.
This affects the significance of Insurance follow-ups in properly receiving claims. Denials, underpayments, and non-payments are some of the most likely complications in this process. If the hospital is dissatisfied with the reimbursements, the prices might be adjusted during the next round of plaintiff talks.
Step 11: Patient Billing and Collections
Patient balances and liabilities are calculated, and a statement is prepared, in the final step of healthcare revenue cycle management. Outstanding accounts are closely monitored. The balances of various patients’ payments are tracked. With the rise of high-deductible health plans, patient ranges are becoming more important, as they are directly linked to hospital earnings.
Step 12: Cash Posting
By examining payments while also offering a picture of financial habits, cash posting makes it straightforward to spot any difficulties and solve them immediately. When done correctly, cash posting ensures that the major area of development in revenue cycle management is probed, perhaps assisting in revenue generation.
Cash posting can be done manually or automatically, depending on the coverage offered by the patient’s insurance plan and financial capability. Manual posting is time-consuming and prone to a variety of errors, raising the risk level. Auto Posting, on the other hand, is a digital solution that speeds up medical billing while maintaining a consistent revenue stream.
Step 13. Reporting
Without precise data, medical practices and institutions may have concealed problems that are worsening. For your meetings, you’ll need to develop a variety of data reports. To evaluate if your team is meeting benchmarks, use the RCM software capabilities to create customized reports that include financial data, management information, and key performance indicators.
Final Thoughts
As healthcare revenue cycle management evolves, the hospital must maintain the greatest standard of patient-centric care by working as a team. To be fired on all cylinders, each department’s goals must be coordinated.
Because revenue is so important to any healthcare provider’s billing cycle, TopRCM is here to keep you informed about healthcare billing trends, revenue cycle solutions, and more.
To learn more about revenue management solutions, simply visit https://www.toprcm.com/ today!
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References:
Revenue Cycle Management Market Statistics: 2030: Author(s): Kashinath Ghatke and Rachita Rake, Vineet kumar: Feb 2022
Industry-Analysis of Revenue Cycle Management RCM: Published Date: Apr, 2022
Industry Reports of Revenue Cycle Management Market
Industry analysis- Healthcare revenue cycle management market: Report ID: GMI1170 Base Year: 2021
Covid-19 Impact on the Revenue cycle management market: Published Date: Sep 2021 | Report Code: HIT 4017
Revenue Cycle Management Market Size 2021 | Is Expected to Reach USD 258.16 Billion: May 10, 2021 06:02 ET | Source: Fortune Business Insights
Global Revenue Cycle Management Market – Industry Trends and Forecast to 2028
13 Steps In Revenue Cycle Management: 8 June 2021
A Complete Walkthrough of the Healthcare Revenue Cycle Management Steps