Efficient Revenue Cycle Management: Your Key to Success
- March 3, 2022
- Posted by: Jennifer Skyes
- Category: Revenue Cycle Management
The Healthcare industry has been transformed to highly competitive and customer-oriented. Healthcare organizations or practitioners need to work efficiently and effectively to maintain their revenue cycles in perfect condition.
Medical Revenue Cycle Management
A revenue cycle management is a strategy to collect the payments from the patients and insurance companies based on the services provided. A holistic revenue cycle management is essential to keep a healthcare enterprise’s financial process smooth. A smooth inflow of cash leads to expansion in healthcare services. Poor or inaccurate billing practices culminate in financial losses. Consistent financial losses are a risk for quality healthcare services.
How Does The Revenue Management Cycle Work?
The revenue cycle starts from the patient to approach healthcare practice for the first time, their appointment, diagnosis, and it ends when the healthcare practice is wholly paid. The steps of the revenue management cycles may include
- The initial fee of the physician
- Claim Submissions
- Remittance from the insurance company
- Insurance follow-up.
Each step of this cycle is essential and helpful in keeping the whole cycle running smoothly. A disruption in any step of this cycle may lead to bad financial performance or financial losses.
What Are Revenue Cycle KPIs?
A healthcare enterprise needs to look carefully at key performance indicators of the revenue cycle. KPIs are useful to overcome compliance risk. Following are the KPIs of the revenue cycle management:
Cash Collection (Point of Service)
At the time of appointment, the cash collections as a physician’s service fees are the critical indicator of the medical revenue cycle management. Physician’s fee is non-refundable cash that medical enterprise receives and adds to the accounts.
Time in AR Accounts
The length of time of the claims process and reimbursement is crucial because the reinvestment is dependent on the cash inflows. The more your claim takes to reimburse, the slower will be your revenue cycle. The best time frame of this process should be under the bracket of 30 to 45 days. Insurance companies also entertain the promptly submitted and adequately followed up claims. The cost of the late claims reimbursement is high and sometimes increases the chances of denials if the submission time exceeds the 45-day limit.
Clean Claims Ratio
The ratio of clean claims or reimbursed claims is a crucial indicator of your efficient revenue management cycle. The clean claims ratio indicates the inefficiencies in the claims submission process. Efficient medical billing companies overcome this challenging task using innovative techniques to get faster reimbursements.
High bad debt shows a company’s inefficiencies in collecting the payments. Increased bad debts mean that your company has financially not performed well in the past. As an efficient revenue cycle management service, MediFusion overcome these bad debts.
Cost to collect
The performance indicator “Cost to collect” measures profitability and efficiency. Divide the cost of revenue cycle management by the total cash to be collected to determine the cost to collect.
Net collection percentage
The net collection rate is the capacity of a healthcare enterprise to collect its legitimate payments. The figure of net collection percentage shows the number of bad debts, denied claims, and other adjustments. The net collection rate below 95% is an indicator of the company’s poor financial performance. It is one of the most important performance metrics to monitor.
In the healthcare industry, a rising denial rate is alarming. A high denial rate indicates errors in claims. We eliminate denials by accurately submitting claims after systematically re-checking and verifying.
How to Improve Medical Revenue Cycle Management?
Healthcare enterprises must improve their revenue cycle management necessary for the accumulated cash inflows and reinvestment.
Understand the Requirement of the Patient
The RCM healthcare enterprise should understand the requirement of the patients. A healthcare enterprise should communicate a transparent payment policy to the patients at the appointment time. Patients pay a part of the payment at the appointment time, whereas healthcare insurance companies cover the rest.
Healthcare- providers or hospitals prioritize their patients according to payment. Revenue cycle management follow-up on claims and communicate with the patients to pay the amount they owe to make the reimbursement process faster.
The patient who owes less to the medical practices is usually overlooked. These small chunks of payments pile up to make the bad debts back lock increase. These small payments are often waved off by the end of the financial years. Medical practices should not overlook these small payments.
Fragment the Administration Services:
It would help to fragment your administration department into front-desk and back-office staff to keep your revenue cycle healthy. Both staffs have their priorities and can contribute to “Patient Care.” Improved communication level of the front desk office and the patient is the right start of your revenue cycle management.
An experienced and well-trained back-office staff will accurate the billing and coding process. Your claims are accurately and timely reimbursed.
Prevent Claim Denials
RCM Healthcare providers need to submit claims timely and do follow-ups. Before submission, it is necessary to ensure the accuracy of claims to prevent claim denials. In case of claims denials, a quick resubmission process is mandatory for efficient reimbursements.
The reduced time between claims submissions and resubmissions is essential to reduce the cost and chances of rejection. It is suggested that you hire an efficient billing team that knows the necessary documentation and claims management process. The prompt resubmission after the denial may involve the process of identification of the error and rectification.
Audit, Audit, Audit
An audit is necessary for each step of revenue cycle management. In the first step, an audit of the cash received helps you detect any non-payment. Accurate claim submission requires an audit at the time of claims submission. However, after the denial of the claim, the audit is helpful in accurately detecting the problem and rectifying the issue. The financial process of any healthcare enterprise remains smooth only if a repeated audit is performed on every step.
Get Reimbursed According to the Services Rendered:
Ensure the claims information is accurate and stay updated about the payments received. Keep the counter-check to prevent any possible fraud or abuse.
Work with the Experts.
Medical billing is complex and requires expert billing and coding staff to prepare and submit claims. Your coding staff should have up-to-date knowledge of medical coding. Wrong, erroneous, or obsolete coding is also the main reason for denial cases.
For accurate medical billing and coding services, you need experts. You can maintain the in-house billing and coding team or outsource these services from an experienced and trustworthy billing outsourcing enterprise.
A Trustworthy Team
The team of your healthcare enterprise is an essential player for your revenue management. Your team consists of front desk staff or receptionists, medical practitioners, paramedical staff, billing and coding staff. Every person either adds value to your company or decreases your customer base because of their performance. It is suggested that you should hire front desk staff, medical practitioners, and paramedical staff and outsource the rest of the services to a professional medical billing company.