Every sector and industry has a revenue management cycle. The healthcare sector is no exception. The revenue cycle management process helps healthcare systems track revenue from patients. This includes everything from their initial appointment or encounters to the balance payment.
The revenue cycle of healthcare begins with an appointment or a hospital visit. It typically ends when the service provider or hospital receives the complete payment for services rendered.
The path to healthcare revenue integrity comprises seven crucial steps. These include preregistration, registration, charge capture, claim submission, processing of remittances, follow-up for insurance and patient collections.
Getting these seven steps right helps providers mitigate miscalculations that can get deemed costly to their bottom line.
Next up is an evaluation of these individual steps.
Preregistration
Preregistration is crucial to the revenue cycle. It enables the medical practitioner to collect real-time demographic information, insurance information and eligibility-related details. These details get evaluated through a clearinghouse while the patient is still on the phone. Once done, they go to the patient’s insurance carrier and flow through the management system. The system informs the provider about coverage, insurance and co-payment, among other details. If required, it even notifies about referrals.
During this step, the practitioner can also discuss the financial expectation of the patient, including the time of payment and no-show/cancellation policy. When lacking a tight preregistration process, several areas can get missed. A robust preregistration process kick starts the revenue cycle process.
Registration
This subsequent step solidifies the process by ensuring the accuracy of patient information from start to finish. During registration, the healthcare provider ensures that the address, contact details, date of birth, guarantors and insurance information are precise. This data must get secured each time a patient undergoes a visit or consultation.
What also happens is that the provider collects the payments. Here, the financial forms get signed, and insurance benefits get assigned. The provider can face severe financial ramifications if the steps go amiss and the practice undergoes an audit.
Charge Capture
This step can get fulfilled in several ways. It can get done through automation as well. Here, the information automatically flows into the practice management billing side. However, much depends on what the provider mentions in their documentation. Alternatively, providers can also opt for the old-fashioned way. The front desk staff enter information or send it to billing, where it gets incorporated manually.
Both these approaches have pros and cons, and charges can get missed. The most common include ancillary services, resulting in revenue left on the table. Hence, one must ensure that transactions get coded correctly and dispensed to the insurance carrier.
Claim Submission
The claim submission step involves sending information to the insurance carrier. However, this can only happen once the charges get entered. Once done, the revenue cycle team assesses these charges, the CPT and the diagnosis codes. They shall also enquire whether the diagnosis supports the performed procedure.
Claim scrubbing is ancillary to the claim submission process. It ensures that the claims are clean, accurate and perfectly matching. The step also includes sending claims from the management system to the clearinghouse, the acting mailroom. It takes the claims and remits them to the individual payers.
Remittance Processing
Once the claims get dispensed, the provider shall get remittances back. The explanation of benefits shows the amounts paid for services rendered. This process also determines the allowables. This is where the provider contracts with the insurance carrier on a service provided.
However, be wary of the common mistake “post and go”. Today, electronic postings have become the norm. And typically, providers can take them for granted by not revisiting the posted remittances.
Another complication is fee schedules. These enlist amounts chargeable for each service. Providers must review them to ensure consistency with the adjusting rates, contracts and allowables. Yet another is write-offs, contractual and non-contractual. The former is inevitable as they involve predetermined rates with carriers and payers. The latter can be avoidable by looking at red flags. Some of these are no authorization, no referral and claim not submitted on time.
Insurance Follow-up
In this stage, the providers look at the items that get paid and those that remain to get paid. So, what happens to the latter? The accounts receivables or A/R report shows everything that awaits in the insurance and patients’ task lists for the extended period. The report shall reveal if insurance follow-up gets broken and why it takes so long to get paid.
A crucial aspect of this step is determining the structure. Some of the questions are next:
- Do the people get assigned specific carriers?
- Are the bills handling team cross-trained?
- Does the practice management team deal with insurance?
- What is the trend with claims? Do they get appealed or resubmitted?
Patient Collections
The most challenging aspect of the revenue cycle is patients’ collections. The best way is when the patient is physically present at the office. It is recommended that the front desk staff get trained for collecting at the time of service.
The best practice is creating a regular statement cycle, wherein patients get one statement every 30 days.
Parting Words
Getting these seven steps right helps providers mitigate miscalculations that can get deemed costly to their bottom line. A glad tiding is the technological advancements that enable providers, hospitals and healthcare systems to store all sensitive and confidential information. These solutions are quick, efficient and easily accessible. However, taking it for granted could result in a cautionary tale.
