- Jul 19, 2023
Revenue Cycle Management connects administrative and clinical data, such as the individual’s identity, insurance information, and treatment data, to help improve staff performance and deliver the best experience. It also helps maximize revenue, prevent loss, and receive reimbursement quickly and efficiently. Further, the same can play a crucial role in patient retention for a prolonged time.
In short, a Revenue Cycle Management (RCM) conducts various functions, such as insurance eligibility verification, healthcare delivery, medical documentation, billing, claim submission, and audit.
Further, it is worth mentioning that from the market perspective, the US-based Revenue Cycle Management for the healthcare industry is expected to grow exponentially at an annual growth rate of 10.3% from 2023 to 2030. Such impressive numbers and positive anticipation from the market give the much-needed moral boost to the RCM providers and enhance the chances of new entrants in the same segment.
Why is Revenue Cycle Management Important?
With each passing day, healthcare costs are getting costlier, posing a significant burden on people’s pockets. Also, healthcare facilities need help to provide an adequate medical facility at a nominal fee. In the meantime, the inefficient management at the hospitals and healthcare centers makes the facilities even more expensive. It might amaze you that in 2020 alone, the healthcare sector lost 16.3 billion due to inefficient revenue cycle processes.
In light of the above points, the need for a positively efficient RCM tool becomes essential to manage the revenue collection and provide a hassle-free treatment experience to the customers.
The below points will further clarify the usability and need for revenue management systems in the healthcare sector:
Efficient Revenue Collection:
A RCM monitors the claims (medical claims) made from the healthcare insurance companies and the denials on a timely basis, addresses all the grievances, and ensures the revenue is collected efficiently without any delay.
Elimination of Redundant Task:
The ease of payment process and administrative tasks saves several hours for patients and healthcare systems as well. In the absence of RCM, one needs to pay repeatedly, and the workforce is also engaged for timely payment, which is simply a waste of time for both. Introducing a Revenue Management System simplifies all these processes and eliminates the need for manual intervention.
Prevent Fraud:
An effective RCM decreases the risk of inaccurate insurance claims to insurance companies. In this way, RCM ensures that the correct health claim is being made and also looks into timely settlements of the same so that healthcare facilities do not need to bear the financial burden.
How is RCM Valuable?
There are several ways in which Revenue Cycle Management (RCM) in the healthcare industry is beneficial. Below some of them are enlisted:
- Capable of collecting payments upfront and thus eliminating any last-minute hassle.
- Automates prior authorizations and pre-appointments for on-time medical engagements.
- Strengthens data capture and also automates manually performed tasks to eliminate any risk of error at the hospital’s front desk.
- Improves medical transcription practices and streamlines the insurance claim tracking and managing process.
- Ensures the delivery of an improved and top-notch audience financial experience during the complete treatment process.
Some Strategies to Improve Revenue Cycle Management in Healthcare Industry:
There are several strategies that can be used to improve revenue cycle management in the healthcare industry. Below are some of them:
- Use data to track and measure revenue cycle performance.
- Automate necessary verification proofs and check eligibility in advance to improve RCM efficiency.
- Focus on front-end improvements to relieve backend stress on the hospital staff.
Use the RCM tool to ensure transparency with patients about billing and expenses.
What Are the Ways to Optimize Healthcare Revenue Cycle Management?
One way to improve healthcare revenue cycle management is by empowering the front desk at your healthcare facility regarding functionality to perform some vital tasks that aid the billing process. Also, forming cross-departmental task forces or strategy groups can help hospitals optimize their revenue cycle management. If denial rates are too high, it is in their best interest to form a monitoring group with the task to determine the causes and develop a viable resolution.
Further, there are several other ways to optimize healthcare revenue cycle management. Some of them are described below:
Use Software and Tools to Maximize Your Productivity:
The use of software and tools can help you automate the revenue cycle management process, ultimately saving time and money. Some of the tools that you can use include electronic health records (EHRs) and revenue cycle management software.
Medical and Administrative Staff Education and Training:
The education and training of healthcare staff can help them understand the importance and usability of revenue cycle management tools and why they are essential to your organization’s financial health. It can also help them identify areas that need improvement and steps required to overcome shortcomings.
Set and Monitor KPIs:
Setting goals and monitoring key performance indicators (KPIs) can help you track your progress and identify improvement areas. Some of the KPIs that you can track include denial rate, claim rate, net collection rate, etc.
Streamline Point of Service (POS) Collection:
It helps you to improve your revenue cycle management by reducing the time it takes to collect payments. This can be achieved by offering multiple payment options, providing customers with clear information about their bills, and training staff to collect payments at the point of service.
Best Practices for Effective Revenue Cycle Management in Healthcare Industry:
Below are some of the strategies to get the most out of the RCM tool:
Verifying Customer Insurance Information and Eligibility:
It is the foremost step in the revenue cycle management process as it is imperative to confirm that the customer has active insurance coverage and that the services provided are covered under their plan.
Optimize the Registration Process:
This includes collecting accurate demographic information, verifying insurance data, and streamlining the process of obtaining necessary authorizations.
Ensure Accurate and Timely Data Feed:
Accurate data feeding is essential for proper reimbursement, and hence it is crucial to ensure that all information regarding every service delivered is fed correctly and submitted promptly in the RCM tool for monitoring and evaluation in the future or when required.
Monitor and Manage Claims Submission and Denials:
Customer claims should be submitted promptly and accurately. Also, if there are any denials on claim requests, then that should be reviewed and appealed if necessary.
Collect Balances:
Collecting customer balance amounts is integral to the revenue cycle management process. Customer should be informed of their financial liabilities before admission to the healthcare facility.
Improved Ffficiency:
RCM tool can help automate many aspects of the revenue cycle management process, including claims submission, payment management, and billing. Accomplishing all these functions in a smooth and hassle-free manner enhances the overall efficiency of a healthcare facility.
Final Words:
The goal of Revenue Cycle Management in the healthcare industry is to eliminate operational inefficiencies in the claims and revenue collection processes. Moreover, it also aims to simplify and streamline the entire medical care journey and other associated functions, such as the claims process, reduce errors and rejections, improve staff performance and optimize revenue tracking.
Today, revenue cycle management is trending in healthcare as it has become an integral part and is vital for ensuring a smooth financial journey for the organization. Also, streamlining other works (hospital & staff) is an added advantage. So, using RCM tools to deliver the best medical experience and maintain overall efficiency in your healthcare facility is crucial.
