Regardless of how good a job your hospital does in providing care, you can’t remain viable unless you have a good handle on your financials, as well. Any hospital that is unable to properly manage its revenues will struggle to survive. Revenue Cycle Management (RCM) is the term used to describe this financial process as it encompasses the management of funds along with the collection of payments for the care your hospital provides to its patients.
RCM is the all-encompassing combination of claims processing, payment, and revenue generation. it is a hospital’s financial circulatory system and includes all the managerial and clinical tasks that support the capture, administration, and collection of revenue from patient services. RCM covers the full life of a patient account.
Understand the Hospital Revenue Cycle through the Patient Journey
The revenue cycle combines all the steps along the financial path that involve direct patient interaction. This includes scheduling, registration, and the examination of insurance eligibility. RCM tasks are also conducted during and after the delivery of care. This can include charge capture, coding, and submitting claims to the insurance companies.
Pre-Registration
Pre-registration occurs at the initial contact with a patient. This step calls for the gathering of information regarding the patient and their insurance. Collecting this information will help expedite administrative requirements before any patient care is delivered.
Registration
The Registration step is the gathering of any additional patient information and consent that must be added to the medical record to meet the clinical, financial, and regulatory requirements. The Registration step provides an opportunity for further engagement with the patient and to make them aware of any potential financial obligations. It is also a chance to inform them of the next steps in their care journey.
Charge Capture
Charge Capture refers to the clinician recording the required information about the services they will provide to the patient so that a medical claim can be generated for billing. This step calls for accuracy in order to avoid lost or delayed revenues. In best practice, the hospital’s charge capture system will interface with its Electronic Health Record (EHR) system to ensure the proper identification and capture of charges.
Utilization Review
Utilization Review is the process of analyzing clinical treatment to determine whether it is necessary (from a medical perspective) to improve the health outcome of the patient and manage costs. In the Utilization Review, patient advocates and case managers may be called upon to offer guidance to patients and help determine what level of service is most appropriate.
Coding
In the Coding step, trained staff are called upon to match medical diagnoses and procedures with their universally accepted codes. The codes are applied to the patient’s record so that insurers can refer to them to determine the proper payment amount for a medical bill. Coders are usually required to pursue ongoing training to stay current with best practices and help ensure coding compliance, accuracy, and consistency.
Third Party Follow-Up
This step involves the identification and pursuit third-party payers for the collection of payments on behalf of patients. This step is critical because, in most cases, you cannot bill Medicaid or Medicare (payers of last resort) until you have explored all other options.
Claim Submission
Claim Submission refers to the hospital submitting billable fees to the appropriate payers, such as insurance companies. Ideally, the claim will be reviewed and paid by a payer upon initial receipt. This expedites reimbursement and improves the hospital’s cash flow. Accurate coding minimizes errors that can lead to claim denials.
Patient Responsibility
When a bill for services is not completely covered by insurance or other payers, the patient must assume the responsible for paying the balance. The hospital must then work with the patient to collect this balance.
Remittance Processing
Remittance Processing refers to the review of payments associated with a bill for patient services to determine whether to accept such payments. The hospital’s accounts receivable systems should verify insurance, process claims (electronically whenever possible), submit accurate claims, and appeal (when necessary). All of this should happen in a timely manner to ensure maximum collections in the least amount of time.
Understanding the Hospital Revenue Cycle through eLearning
In recent years, as online technologies have continued to evolve, more and more hospitals have turned to eLearning as a way of training their employees on the best practices associated with revenue cycle management. eLearning provides a convenient and cost-effective approach to training your revenue cycle employees and keeping them up-to-date as practices, requirements, and technologies change over time.
LMS Portals offers a cloud-based platform that allows our hospital clients to launch and manage their own eLearning portal for revenue cycle training. The system allows for fast and easy development and delivery of eLearning revenue cycle courses and includes supporting tools for employee onboarding, online communication, program analysis, and more.
Contact us today to get started for free!