What are the benefits of Revenue Cycle Management?

Healthcare providers’ top priority is bringing quality care to their patients. But this requires more than just treating the patient—it also means having an effective strategy to manage administrative and clinical functions so that practitioners are reimbursed for their services.

  HR in SAP   Apr 6, 2024   98  Add to Reading List

That’s where revenue cycle management comes into play.

Revenue cycle management is essential to running a successful medical practice. The benefits that revenue cycle management can bring to healthcare providers create a better experience for patients and administrative staff alike.

Read on to explore the top five benefits of revenue cycle management in healthcare.

Before diving directly into the benefits, let’s first define revenue cycle management, or RCM.

RCM is the process by which healthcare facilities and small practices can ensure they’re paid for their services as quickly as possible. It encompasses the entire healthcare revenue cycle, beginning when a patient makes an appointment with their healthcare provider and ending when all claims and payments for that appointment have been collected.

While this may seem straightforward, it’s anything but. Revenue cycle management is a multi-step process that requires all steps to be completed thoroughly and accurately so as to not result in error.

Errors can delay payments, causing dips in revenue and stress on the whole facility.

The Revenue Cycle Steps

Let’s take a look at the steps that comprise revenue cycle management to better understand how it benefits healthcare professionals.

  1. The first step involves syncing all relevant information between the patient and the administrative staff. This includes patient intake forms and insurance verification forms. RCM emphasizes this first step because all other steps rely upon this information being streamlined and accurate. If any errors occur, this leads to claim denials and a grossly impacted patient payment timeline.
  2. From there, services rendered must be detailed and coded. This process is called charge capturing, and it’s when physicians or care providers transcribe their services into billable charges. Each service has a universally accepted medical code to determine reimbursement amounts.
  3. Once the services have been coded, they’re submitted to the insurance provider as a claim for reimbursement.
  4. Communication with the insurance companies is key at this stage in the billing process. Healthcare providers need to keep up-to-date on what claims have been submitted and where they are in the payment process. Should there be a lot of delays at this stage, ensuring that you have a tight payor contract in place can help guarantee timely reimbursement.
  5. Once the insurance company has paid for their portion of the services, the remaining balance is sent to the patient for collections. This entire process then needs to be reviewed in order to be further streamlined.