A healthy hospital revenue cycle management process helps ensure steady collections, timely revenue, and financial viability for your hospital, allowing you to focus on delivering excellent care to patients.
Unfortunately, many hospitals do not have access to the expertise necessary to maximize the RCM process. Below, we provide a hospital revenue cycle management overview, including the reasons why it is integral to healthcare.
Hospital Revenue Cycle Management (RCM); Key Components
Revenue cycle management is a strategy hospitals and other healthcare providers use to manage administrative and clinical functions involved in the capture, management, and collection of patient service revenue.
The cycle begins as soon as a patient schedules an appointment up to the point that all of the patient’s payments have been collected, and there is a zero balance in their account.
Steps in the revenue cycle management process include, but are not limited to:
- Claims submission – after coding, the claim is sent to the insurance company for approval. RCM keeps track of the claim to ensure it is processed quickly.
- Payment collections – once the claim is approved, the insurer reimburses the provider based on the patient’s eligibility. If after the insurance reimbursement there is any remaining balance, the hospital will be responsible for collecting the outstanding balance from the patient.
The Challenges Hospitals Face With Revenue Cycle Management
The following are the most common hospital revenue cycle management challenges that affect both cash flow and the quality of patient care:
Precise Coding and Accurate Billing
Hospital medical billing and coding are vital to any hospital, and if done accurately and timely, can establish a smooth and successful revenue cycle.
Some of the billing and coding challenges that present themselves in hospitals include:
- Difficulty staying updated on new codes – specialties like Cardiology, Orthopedics, Pain Management, and Nephrology codes change continually, and it’s often difficult for hospitals to stay updated on the latest changes.
- Failure to provide accurate and complete documentation – when documentation problems occur, it slows down your entire revenue cycle, leaves room for inconsistencies in coding and decreases your billable expense reimbursements. Any documentation gaps for procedures can result in the loss of codable components and potential codes. Changes in a procedure can always occur, so it’s essential that providers provide thorough and complete documentation to coders.
- Not coding to the highest degree of specificity – failure to code to the highest degree of specificity can result in lower reimbursement. Providers need to chart all relevant chronic and comorbid diseases completely. hen possible, providers should document the diagnosis, not just the symptom. The difference in diagnosis codes can impact the way care is graded or reimbursed, so coding to the highest degree of specificity has a direct impact on hospital revenue.
Compliance Standards
A revenue cycle management system must uphold Healthcare Insurance Portability and Accountability Act (HIPAA) regulations to protect a patient’s personal information. Any form of healthcare fraud and abuse can result in penalties, which can negatively impact your hospital. You must always safeguard the privacy and confidentiality of protected health information (PHI) by complying with HIPPA’s mandated protocols.
HIPPA requires:
- Standardization of the medical codes
- A regular compliance audit of the facility
- Electronic filing of medical claims
- Foolproof workstations
Inefficiency in Exchange Information
Patient access management allows doctors to easily integrate data with the available records. However, exchanging information remains a challenge due to the complexity of health information with its many segments and nomenclature for various procedures.
Without the right interface ICT tools and strategies, it would be difficult to adopt standardized healthcare terminology and achieve interoperability, which is necessary to solve the data exchange problem between doctors, labs, hospitals, and pharmacies to a large extent.
<strong>Maintaining a Consistent Cash Flow</strong>
A consistent cash flow would translate to a fiscally healthy hospital. But if you have mounting rejected claims and have a slow A/R collection, you will need to find ways to increase collections and boost your cash flow.
<strong>Data Analytics</strong>
Data analytics plays a major role in healthcare delivery. It can organize and streamline health information, as well as optimize a clinician’s time and your revenue. However, most hospitals are slow in tapping the potential of utilizing consolidated data analytics in healthcare. They may be stuck relying on non-technical staff and inexperienced vendors.
<strong>Following-up with Payers</strong>
Around 10% of claims get rejected on the first attempt. If you do not have a skilled hospital revenue cycle management on board, your rejected claims will just continue to accumulate and consequently, impact your bottom line.
<strong>Patient-centered Care</strong>
Any physician must focus their time and effort on caring for their patients rather than managing the hospital’s revenue cycle. You need to provide quality patient care in order to keep your hospital running.
<strong>Why is Revenue Cycle Management Important for Hospitals?</strong>
With so many critical players and rules involved, coupled with the rapidly changing healthcare landscape, committing errors that result in lost revenue becomes increasingly probable.
Improving hospital revenue cycle management is an opportunity to streamline processes, automate tasks, and improve efficiency, enabling your processes to minimize errors that could potentially save millions in realized cash flow. Furthermore, a healthy RCM process gives you a competitive advantage by allowing you to provide the best patient care possible.
<strong>The Benefits of Outsourcing Revenue Cycle Management Services for Hospitals</strong>
Outsourcing medical billing and revenue cycle management services provide hospitals with numerous benefits, including:
Optimized Workflow and Reduced Administrative Burden
Outsourcing RCM helps hospitals remain efficient and productive by having streamlined processes, from patient pre-registration to payment reminders. A hospital that runs like a well-oiled machine will not only ensure steady collections that make your organization financially viable but also lowers the administrative burden on your staff.
An electronic workflow can help streamline all system facets, such as coordinating front and back communication, concluding a patient’s journey with timely payments, and eliminating lost paper documentation. This frees up more time for you to focus on delivering quality care.
Reduced Errors
RCM services can assist hospitals to achieve a more efficient and accurate medical billing process. Having a team of expert billers results in reduced and timely detection of errors.
Faster Collections Process
When your RCM services provider combines the right set of software solutions with automation tools, all the time-consuming tasks, such as data collection, insurance verification, and coding will take significantly less time compared to doing them manually.
By automating the cycle’s steps, from eligibility checks and payment follow-ups to data charge entry, you can expedite the entire process. When you streamline tasks, you become more efficient and effective as you provide a more straightforward system to your administrative staff and fellow physicians, resulting in faster collections and improved cash flow.
Better Claim Scrubbing for Fewer Denials
Denials are the result of payment claim errors. Optimized revenue cycle management brings accuracy to your facility’s system, leaving little room for mistakes. By getting coding right the first time, you get to reduce claim denials and receive your reimbursements faster.
Improved Patient Experience
Skilled revenue cycle management professionals and the right technology will contribute to an efficient process that minimizes standard billing and coding errors. This means simplifying the process and improving all the touchpoints involved in the patient experience.
Coronis Health is a global revenue cycle management company offering specialized solutions to healthcare practices and facilities. By using industry-leading technology combined with high-touch relationship building, Coronis Health allows healthcare practitioners to focus on patient care, maintain financial independence, and cultivate financial success.
Whether it’s collections, billing, denial management, or pre-registration authorization, our experienced group of collectors, billers, and healthcare professionals are ready to work with you as an extension of your current business environment. Attaining RCM improvements on your own can be a slow process. Overworked and under-trained staff, oftentimes, result in lower overall collection rates and shrinking margins.
Hospitals that have a forward-thinking approach to today’s hospital revenue cycle management and healthcare industry challenges give themselves a competitive advantage, and the extended solutions from Coronis allow hospitals to achieve that competitive advantage swiftly.
Are you ready to increase your revenue, reduce denials, and accelerate your cash flow? Contact Coronis Health to learn more about the importance of revenue cycle management in hospitals and how our decades of experience and data-driven solutions can help optimize your revenue cycle. You may also request your free financial checkup today.