Global healthcare organizations have acknowledged the importance of incorporating revenue cycle management in their processes. According to a report by Allied Market Research, the global revenue cycle management market is estimated to reach $329.71 billion by 2030.
Revenue and finance mismanagement can lead to the collapse of healthcare systems, despite good service delivery. For this reason, all steps in revenue cycle management in healthcare must be efficiently performed. These steps start from scheduling initial patient appointment and conclude on finalizing invoice.
Read on as we explain the steps of healthcare billing revenue cycle, below:
Step 1 – Choosing an appropriate revenue cycle management system
The first out of the 10 steps in revenue cycle begins with selecting a revenue management system. Healthcare institutions must pay attention to factors like service requirements, budgetary constraints and resource availability while choosing a revenue management solution. In the case of small organizations with an in-house IT team, it is ideal to choose a revenue cycle management software that runs on servers. Alternatively, in larger organizations, outsourcing the process to third-party providers is the best approach to achieve cost and resource efficiency.
Step 2 – Pre-registration to ensure transparency
The next step in revenue cycle management in healthcare is proper collection of data from patients and providing them with estimated treatment costs. Maintaining such transparency benefits both patients and healthcare establishments. Access to proper patient information helps healthcare organizations deliver better services. Patients can also estimate the potential out-of-pocket treatment costs and determine the payment timelines. Hospitals are able to minimize bad debt by setting clear cost expectations for patients.
Step 3 – Validating collected patient information
In this step, healthcare organizations validate the data collected from patients. Each detail ranging from insurance coverage to patient history, is checked meticulously.. At this stage out of the 10 steps in the revenue cycle management, patients are required to sign financial forms. Subsequently, insurance providers assign them the benefits of coverage. So, validating patient information is necessary to prevent financial compliance issues.
Step 4 – Charge capturing to ensure revenue integrity
Next, healthcare organizations send billing information to insurance providers. The front desk staff may enter the billing information manually or obtain it through automated modes and share it with the payer.
According to a survey conducted by the healthcare technology provider Akasa in 2020, nearly 66 percent healthcare setups in the U.S. used some form of automation in revenue cycle management. Moreover, nearly 90 percent CFOs of leading hospitals’ expressed the need for automation solutions in revenue cycle operations.
This step ensures that healthcare organizations receive the correct reimbursement from their payers to maintain revenue integrity.
Step 5 – Submitting accurate codes for medical services
Healthcare organizations provide numerous medical services and use numeric and alphanumeric codes to describe them. Consequently, these codes are utilized for generating a summary of the medical services availed by patients. Information for diagnoses, procedures and tests are accurately coded, following which a bill is submitted to payers.
Step 6 – Verification of eligibility and benefits by payers
Once healthcare organizations share the coded data, insurance providers check eligibility, verify insurance coverage and assign benefits. This step of revenue cycle management ensures faster bill payments and minimal errors in the claim settlement process.
Step 7 – Submission of claims to insurance providers
After coding and verification, one of the most important steps is to submit claims to insurance providers. This stage also involves claim scrubbing; to eliminate errors resulting in claim denials or underpayment.
Incorrectly captured information in the claim documents can result in delayed reimbursements. For this reason, practice management systems are utilized to detect errors and submit claims. If errors are detected, healthcare organizations can resubmit the claims immediately. Following such systems accelerates the process of claim submission and settlement based on contract terms.
Step 8 – Remittance processing by insurance providers
Upon successful submission and review of claims, insurance providers begin the process of remittance . They determine and process the total payable amount. In this step, healthcare organizations can address their concerns regarding delayed payments to the insurance service provider. Also, of the 10 steps of revenue cycle management, this stage highlights the overhead expenses for patients.
Step 9 – Settlement analysis for receiving correct payment
In the next step, healthcare organizations look at services, procedures and pharmaceuticals for which the insurance provider has paid the charges. They analyze reasons behind non-payment of particular items. The most common issues found as a result of this analysis are payment denials and underpayments. Following extensive analysis, healthcare organizations implement necessary measures to receive the correct payment.
Step 10 – Patient collections to avoid bad debt
The last out of all the 10 steps in the revenue cycle management involves payment collection from patients. The healthcare organization prepares a statement by calculating the balance amount after availing the payment from the insurance provider.
Subsequently, the statement is emailed to patients. Reminders for timely payment and collection are also set by the healthcare institution.
The best time to collect payments from patients is while servicing them. Healthcare setups must have a standard policy for managing co-payments and deductibles to avoid collection backlog and bad debt.
Having explained the steps of the healthcare billing revenue cycle, we understand you may still have some questions. We have attempted to answer some of the frequently asked questions below:
Q. What if there are errors in patient information?
A. If any errors are found in patient information, they can be brought to the patient’s notice. Corrective steps must be taken after thorough verification.
Q. What if wrong coding information is sent to insurance providers?
A. During the verification process, an insurance provider checks eligibility and detect errors in the claim document. It then asks the healthcare organization to resend the document with correct coding information.
Q. What if an incorrect claim amount is processed during the remittance processing step? How will it be cleared?
A. In case of an error, the claim is forwarded to the clearinghouse for review and clearing. Subsequently, the clearing house sends the rectified claim amount to the insurance provider for payment.
Q. What if the healthcare organization is not satisfied with the reimbursement?
A. The organization can negotiate the contract and adjust the fees during the next cycle.
Revenue cycle management ensures business sustenance, revenue integrity, and the time focus on quality services, for healthcare setups across the world. Benefit from HelioNext’s experience of 15 years in providing customizable end-to-end revenue cycle management solution to healthcare setups. Get in touch with us to choose the right revenue cycle management solution for your business. Alternately, we can also help you incorporate the 10 steps in revenue cycle management in healthcare into your business processes so you can increase your practice revenue.