Healthcare is a competitive and ever-changing industry. As the market changes, so do the needs of patients and providers. One way that healthcare has evolved in recent years is with the introduction of an RCM system for revenue cycle management (RCM). This new system makes billing easier and more efficient by providing a centralized location for all financial transactions. By integrating billing, accounts receivable, collections, compliance, and other services into one comprehensive solution, RCMs have helped providers reduce administrative costs while also improving patient care through increased efficiency. In addition to helping practices work more efficiently on their own end by centralizing operations from start to finish under one call center umbrella, they can also help patients get better service during tough times when finances are tight.

In this article, we will discuss the healthcare revenue cycle flowchart as well as the benefits RCMs can provide to both patients and providers.

What is Revenue Cycle Management?

The article will be about the effect of revenue cycle management on the healthcare industry and how it can be used within that same industry. Revenue Cycle Management (RCM) is a process designed to directly reduce administrative costs and improve patient care by centralizing operations from start to finish under one call center umbrella. RCMs provide providers with direct access to billing, account receivables, collections, compliance, and other services. This way, they can efficiently work on their own end with less administrative overhead. They also offer services that result in better care for patients who are experiencing financial difficulties by providing them with extended credit lines and repayment options based on their individual needs.

According to CMS.gov, RCM is defined as "the collection of activities involved in the process of generating revenue, including data capture; billing and insurance eligibility; claims filing; claims submission reconciliation; claims adjudication; claim payment or provision for credit/collections (where applicable); patient account maintenance (including but not limited to co-pays, account run balances, payment method changes, etc.); and reporting." The RCM industry first began in the early 2000s due to a growing need to provide medical practices with affordable solutions that centralize billing and patient care operations under one umbrella. This allows practices to work more efficiently on their own end, while also providing improved patient care through increased efficiency.

Healthcare Revenue Cycle Flowchart

When talking about the healthcare revenue cycle flowchart in today's digital age, RCMs are an integral part of the United States healthcare system, working in both hospitals and private practices alike. They help to manage all insurance eligibility verification, claims adjudication, billing, collections, and payment processing by utilizing certified coders, medical billers, and patient account managers to handle these processes. This allows practices to focus on providing patient care, rather than spending all their time working in finance or administration.

Click the link to learn more about Enter’s revenue cycle flowchart! 

The Pillars Of A Successful RCM

A revenue cycle management (RCM) system is a great way for providers to reduce their total cost of operation.

The process can be broken down into 4 main pillars:

1) Insurance eligibility verification and data integrity

2) Claims adjudication 

3) Claim and Patient Follow Up

4) Reporting.

Insurance eligibility verification and data integrity: This pillar is the first step in the RCM process because it helps providers identify gaps in insurance coverage and find the best possible match. Most RCMs offer a variety of different information packages that help providers choose the most appropriate level of service based on their goals and needs. Depending on the specific situation in which they find themselves, practices may not need complete coverage from Medicare and Medicaid. It might be enough to find out which insurance companies and programs they do need to work with so that they can focus their efforts on those areas.

Data integrity goes along with insurance eligibility because it will ensure that the patient's insurance data is accurate and correct. It is also vital to accurate patient demographic information about every patient inorder for everything to flow correctly within the system. This includes the correct phone numbers, emails,insurance, and any other important information related to the patient.

Claims adjudication: After the initial eligibility checks have been made, claims adjudication is next. This pillar refers to the process of receiving all necessary data from providers and then processing claims to the correct insurance companies in a timely manner. Depending on the level of service that providers choose, RCMs can either send claims straight to payers themselves or they can work with practices to finalize adjudication—which usually results in higher reimbursement rates due to fewer rejections.

Claim and Patient Follow Up: Is the third pillar of the RCM. All practices have some form of accounts receivable, so having a system in place to help handle them makes sense from both a business and patient care perspective. If a claim is denied- follow up. When a claim is properly paid by the payer, send a patient bill and follow up. In addition to providing customizable billing options for patients who cannot afford to pay their bills or need extended payment plans—which can include everything from in-house financing options to patient assistance programs, RCMs significantly reduce the overall amount of work that practices have to handle on their own. By combining all claims into one solution, providers are able to spend less time on insurance reimbursement and more time with their patients. 

Reporting: The fourth pillar is reporting.

It's crucial for healthcare revenue cycle management to see where their money is coming from and how it is being spent in order to maintain positive cash flow

With the help of RCMs, practices are able to stay on top of this information more efficiently than they would be able to do on their own.

People

A properly implemented healthcare revenue cycle management system should be powered by a team of highly experienced healthcare professionals. At eHealth Technologies, we have the necessary knowledge and expertise to help practices maintain their financial health.

Process

A successful healthcare revenue cycle management system is also about the process.

Our proprietary technology has been developed after years of working with providers, insurance companies, and third-party administrators.

Allowing us to create the most efficient workflow possible.

Technology

An RCM is made or broken by its technology.

In many cases, when outsourcing RMC, the quality of the technology and software is the difference between a successful practice and an unsuccessful one. 

Click here to learn more about why or why not to outsource RCM.

Healthcare Revenue Cycle Flowchart

The Revenue Cycle Management flowchart Comprises of 15 essential steps:

Step 1: RCM Software Or Outsourcing Processing

The revenue cycle management process starts with outsourcing the duties, it is the most effective way of handling RCM easily. It saves your company time and money, which in turn increases the overall profitability. Some activities like data entry and eligibility verifications can be outsourced to an outgoing call center thereby freeing up your company's resources for other tasks.

You also get to enjoy the benefits of an experienced team that is always available on call, along with access to better customer service records, cheaper rates, more support options, less liability risk, and more advanced infrastructure.

However, if you plan on outsourcing RCM processes make sure you do it right as doing it wrong can cost your company a lot in terms of time and money spent getting back on track.

Step 2: Patient Pre-Claim

This step includes things like provider credentialing and contracts negotiations. In an ideal world, this would have been done during the sales cycle of your company's RCM software.

However, if you are using legacy systems or multiple pieces of outdated technology, then you will need to consider outsourcing some tasks that are outside the scope of your own practice.

The billing and patient account maintenance pillar includes provider credentialing and contract negotiations. EDI and ERA enrollment fits into this section along with the pricing and fee schedule for the organization.

Step 3: Registration

This refers to the collection of any outstanding patient information and consent required for the medical record in order to meet established clinical, financial, and regulatory demands.

This can include registration by a patient's insurance company, which is typically a one-time occurrence. Registration also includes the completion of various forms by a patient or guardian including demographic, contact person, past medical history, current medications, and diagnosis. This is all accomplished in an effort to put together a medical record that contains all relevant information that will assist with future care provision.

In general, RCM providers have procedures that have been established for filing claims electronically through electronic data interchange (EDI) communication channels. In some cases, communication would only happen when the claim needed to be denied.

Step 4: Eligibility & Benefits Verification

This is often one of the more time-consuming tasks that your front office staff will have to do. Eligibility and benefits verification is not always one and the same, but they are related. This is often done by an outside party, namely your insurance provider.

This is the most important of the 14 steps of revenue cycle management because this is where payment can be completely avoided. Unfortunately, it has become increasingly more difficult for providers to determine eligibility on new patients and therefore they are not able to make any guarantees with any insurance companies prior to rendering services or filing a claim.

Since most medical providers work on a self-pay basis, the front office staff must be specialized and trained to determine eligibility for all insurances and accept other forms of payment such as cash or credit cards.

Step 5: Billing

Billings can be made for different reasons including pre-paid enrollments, missed appointments, or uninsured patients. Billing also includes billing for any medical care received or billed by a provider. It is important to note that billings are not just limited to what was provided in the office visit. Billing for anything outside of an office visit can include mental health services, chemical dependency treatment, or lab work done outside of the office.

Billing also includes any procedural codes that are billed along with the regular billing claim. Since medical providers provide a wide range of services, these procedural codes can range from anything done in an office to emergency room procedures.

Step 6: Charge Capture

In charge capture, physicians use a variety of methods to record the information about the services they provide. These methods range from manually filling out paper forms to electronic digital format. For example, let's look at the nurse practitioner who created a patient's medical claim by recording all of their vital signs and symptoms into an electronic health record (EHR) to be sent to the appropriate insurance company.

After creating and sending out a claim, it can take anywhere from one day up to one month for the insurance company to respond with any type of decision. When responding with denial, there is usually no explanation as to why, but there are certain factors that could cause such results such as:

• If the paperwork was done incorrectly or was not sent along with the claim
• If eligibility was not verified or benefits could not be determined by your insurance company
• If there is a problem with billing or charge capture because something was incorrectly coded, recorded, billed for, etc.

Step 7: Utilization Review

Utilization review can be used to analyze clinical treatment to evaluate whether it is medically necessary in order to reduce costs and improve patient health outcomes. Early indications are that there are benefits in using these types of reviews, but the jury is still out on the effectiveness for widespread use.

Some positive effects of utilization review include hospital readmission rates dropping during certain time periods, which suggests hospitals are catching avoidable errors.

Critics have noted that many experts believe that there is not enough scientific evidence yet to draw conclusions about the effectiveness of utilization review. The main concern for critics has been that most experts agree that most medical treatments do not have enough concrete data points to base their effectiveness on, so it is difficult to assess whether or not these utilization review programs are actually having any real positive effects.

Step 8: Coding

Specially trained staff identify medical diagnoses and procedures and document them in a patient’s medical record as universally accepted codes. These codes provide a means of identifying and classifying data about the diagnosis and treatment process for that patient.

Medical coders use guidelines provided by different national and international health care organizations, such as the International Statistical Classification of Diseases and Related Health Problems (ICD) to code the diagnosis and procedure. 

The coding process is always done as close as possible to the point-in-time when it occurs or is known. Some coding systems will place more importance on the degree of urgency at which certain diagnoses are made. For instance, some conditions may be diagnosed during a scheduled appointment as opposed to a trauma situation. In this case, the urgency in which certain diagnoses are made can be important when determining what procedure or diagnosis was provided at the time of treatment.

Click here for medical coding updates provided by our team.

Coding systems are designed to promote accurate reporting of medical services and products used by patients.

Step 9: Third-Party Follow Up

Some coding systems will place more importance on the degree of urgency at which certain diagnoses are made. For instance, some conditions may be diagnosed during a scheduled appointment as opposed to a trauma situation. In this case, the urgency in which certain diagnoses are made can be important when determining what procedure or diagnosis was provided at the time of treatment.

The main concern for critics has been that most experts agree that most medical treatments do not have enough concrete data points to base their effectiveness on, so it is difficult to assess whether or not these utilization review programs are actually having any real positive effects.

Follow up with the insurance company after a claim was filed, in order to determine how much of your bill they will cover and when you can expect the remainder to be paid off. This step cannot occur until after all treatment has been completed and the claim is filed, so it can be difficult to manage patients in incorrect code expectations surrounding how much will be covered and the overall time frame. Used for a procedure, then it will result in either no payment or partial payment.

Step 10: Claims Submission

Claims submission is submitted by healthcare organizations to insurance companies in order to be reimbursed for the billable fees they received. This fee includes the cost of services, products, or procedures, as well as any additional costs associated with receiving those services.

The provider will fill out the claim form and submit it electronically to the insurance company. The claim form will contain information about the patient's coverage, diagnosis, and the amount that was billed for treatment. Claims are handled differently depending on who is running the insurance business. Some insurance companies may accept all submitted claims, while others will only accept a certain percentage of medical bills if they do not deem them urgent or life-threatening.

After submitting a claim for a specific procedure or product, it can take anywhere between 30 to 180 days for the insurance company to process your claim. The average time is about 5 months, though there are many factors that can affect this timeframe, such as processing rates and the severity of the patient's condition.

Step 11: Payment Posting

After the claim is successfully submitted and reviewed, the payment is posted and is able to be paid by your patient.

The USAID has also assisted with the introduction of a healthcare policy that increased access for young mothers in Uttar Pradesh, India. The goal was to provide quality healthcare for all citizens in the region. The Indian government has been able to improve on this policy by providing access to quality healthcare services to young mothers. One of the main concerns in the area of health assistance with the people in Uttar Pradesh, India is funding such third-party interventions. It is not specified and detailed as to how the funding is implemented within the region. The USAID has also reached sustainability and implementation of study by providing a second phase of funding to the same organization. They have been successful in providing the second phase of funding to the specific organizations that they have worked with over time. In this effort, it implemented health care delivery, which included their ability to expand and implement mobile maternal services. The goal was to provide quality healthcare for all citizens.

Step 12: Patient Responsibility

There are many reasons why a claim for medical services may not be entirely covered by insurance or another payer. For example, there may be an emergency that has occurred that requires the patient to receive services at the hospital, but because their hospital visit does not fall within their deductible they are forced to pay out of pocket. When this happens providers must work with patients in order to collect.

Step 13: Remittance Processing

After the claim has been submitted and reviewed, payments can be posted and are able to be paid by your patient. The government has been able to help the country by assisting with healthcare policies, but it is difficult for many citizens to receive a definitive answer on how much will be paid for by the government. The USAID has also reached sustainability and implementation of study by providing a second phase of funding to the same organizations that they have worked with over time. In this effort, it implemented health care delivery, which included their ability to expand and implement mobile maternal services as well as improve the quality of healthcare.

Step 14: Denial Management

Insurance plans will deny service for a variety of reasons. These can range from billing or claims-related errors to new or emerging treatments that are not yet covered. In some cases, services may be denied because they do not comply with a plan's requirements.

Denials are often an unfortunate reality for providers and hospitals alike. When a claim is denied, it means that the amount of money being requested back from the payer is too high or does not match what was initially quoted by the provider. The patient can always contact the company on their own as well as utilize the appeal process if they disagree with the denial decision.

Step 15: Reporting

The RCM software will be used to define customized reports such as financial data, management information, and key performance indicators. It is used to measure your team against benchmarks that have been set in place. Reports will then be created on-demand, anytime it is needed.

RCM Improvement Process

Patient Engagement

The patient is responsible for understanding the charge of every service that they receive. You are not able to pay your bill on time, you may get "behind" which means it will be more difficult on your credit report.

Improve Patient Engagement

Effective communication and thorough engagement with patients is critical to improving financial and health outcomes. Patient engagement is a way of involving the patient in their own care while also helping them understand the costs of such care. The patient is responsible for understanding the charge of every service they receive. Say 'yes' to lab services, medications, etc.

Optimized RCM Through Integration

RCM is an abbreviation for risk-based compliance management. It helps with the steps in healthcare compliance by optimizing RCM through integration and improving outputs of less cost, better compliance, and stress reduction on the patients.

Boosted Efficiency Through RCM Technology

There are many reasons why a claim for medical services may not be entirely covered by insurance or another payer. For example, there may be an emergency that has occurred that requires the patient to receive services at the hospital, but because their hospital visit does not fall within their deductible they are forced to pay out of pocket. When this happens providers must work with patients in order to collect.

The RCM software will be used to define customized reports such as financial data, management information, and key performance indicators. It is used to measure your team against benchmarks that have been set in place. Reports will then be created on-demand, anytime it is needed.

Benefits Of Healthcare Revenue Cycle

The benefits of a strong healthcare revenue cycle management team will be to reduce the cost of claims, deny fewer claims and have better patient engagement. When a claim is denied, it means that the amount of money being requested back from the payer is too high or does not match what was initially quoted by the provider. The patient can always contact the company on their own as well as utilize the appeal process if they disagree with the denial decision.

Challenges Of RCM

Increased Patient Financial Responsibility

The shift in financial responsibility for providers and patients has created a lot of challenges. The financial crunch may be discouraging patients from seeking necessary preventive care, which can lead to chronic conditions that are more difficult to treat. One of the major challenges is that many providers are not adequately prepared to combat this challenge. They have neither the computer technology nor the staff training required to track patient payments at all points throughout the process

●  Growing Accounts Receivable

One of the challenges that can occur when a patient denies responsibility is that there will be a certain backlog in accounts receivable. When patients do not pay for their services, it builds up and increases the amount of time and the number of employees required to track and calculate and bill these services and products. The increased time requires more hours per employee which may increase payroll expenses.

When there is a higher percentage of claims being denied, this will result in increased costs associated with hiring an additional staff member to manage all the denied claims. When patients need to appeal denied claims, this also increases costs for servicing these accounts such as increased manpower and increased overtime.

Lack Of Data Visibility

A revenue cycle management software is a solution that will help you measure the financial outcomes that are associated with your healthcare facility. This software can collect data to show your team's performance against various benchmarks. This reporting side of the RCM software will also allow you to track and measure customer satisfaction and healthcare quality metrics. You can easily create reports on-demand, anytime it is needed.

Staff Productivity

Many practices have limited methods for tracking staff productivity and performance. There are many professionals who have not been able to measure their performance until the use of RCM software. Lastly, some providers have been unable to demonstrate that they were meeting goals because they could not track it effectively on a near-real-time basis. Improving your team's metrics with revenue cycle management software will provide them the means of tracking the goals being achieved by the practice.

Change In Legal Policies

The effects of uncertain and ever-changing government policies, such as those that can be derived from various quarters and payment policies, can have a significant impact on the revenue cycle. In 2008, the health care reform legislation was passed, which meant that states could allow insurance providers to increase prices for higher-risk patients. This resulted in an increased number of patients being labeled as higher risk. As a result of this diagnosis, they were subject to a high premium rate or a denial of coverage altogether.

Healthcare Market Consolidation

It is essential that healthcare organizations remain competitive in today’s market. An RCM can help you address such challenges as managing high-risk accounts, improving staff productivity and dedication, and the need to incorporate technology in order to remain competitive.

Pressure For Cost Reductions

The healthcare industry is expected to see a rise in pressure for cost reductions. This may be the result of many different factors, including market consolidation, government interference, or simply due to inflationary pressures.

The pressure for cost reductions can cause some healthcare providers to consider dropping out of commercial insurance contracts. This can result in a loss of revenue and force providers to look toward value-based contracts as an alternative.

In Conclusion,

As you can see, managing the healthcare revenue cycle is a complex process that requires an advanced RCM system to be able to handle it all. Enter health has been industry-leading in this field for over ten years, and they are still going strong with their innovative approaches to solving problems faced by many hospitals today. If you’d like more information on how our solutions could benefit your hospital or clinic, visit us at Enter.health to learn about our services! Also check out Enter's pricing page.