According to a report from TransUnion, 75% of the patients want to look up the hospital charges online before deciding on getting their medical services. With growing healthcare complications during the global pandemic, healthcare organizations in the USA have also undergone several changes in their operations. One of the most significant changes has been putting up transparent healthcare service estimates on public forums like their websites during this transition. But at the same time, out-of-pocket expenditures for the patients have increased throughout the government and private insurance landscape.
As the patients need to pay increasing cash from their accounts, and the world’s economic condition goes downwards, the healthcare institutions need to make sure that they have a proper revenue cycle management plan to keep the revenue flow strong. Hospitals and healthcare systems struggle with staff shortages to deal with the evolving financial management issues. If you find paperwork mounting up with lesser returns, it is high time to analyze your current revenue cycle management workflow. This blog will guide you through the crucial 13 steps of revenue cycle management and how you can approach them for valuable gains.
Steps in Revenue Cycle Management in Healthcare
Step 1: Design your RCM Work Model
A repeatable work model for proven gains in RCM is the first crucial milestone of the 13 steps of revenue cycle management. Analyze the current teams that you have working towards the RCM in your organization. More than 50% of the healthcare leaders in recent years have shifted towards adopting RCM software for this job, or they have outsourced the end-to-end RCM to professional companies.
Leading companies in this industry can help you soar higher on the cash flow curve by ensuring they are always updated on the latest rules and regulations. They follow the best practices for maximizing the revenue of the healthcare providers. You can get in touch with them to know which system will work the best for you.
Step 2: Align your RCM Staff
Now that you have decided on what kind of work model will be the most suitable for your organization, you need to focus on the alignment of staff. The staff members in the department are the true heroes of financial management since they are the ones handling every path of RCM on the ground level. If you have adopted revenue cycle software, go for staff training programs so that they are comfortable using it. For outsourced companies, know what they are offering and how you can assign in-house staff to be in correspondence with them.
Step 3: Patient Registration
Patient registration is the first important step towards getting a clean claim, making it one of the crucial 13 steps of revenue cycle management. Make sure to take down the proper ID to register or update the account. Revenue cycle experts point out that in many cases, inaccurate or incomplete patient details during the registration process lead to claim denial.
Step 4: Patient Eligibility Verification
You need to verify the insurance details on the account to know which services the insurance company covers for the patient. In case of any discrepancy in the verification process, you must reach out to the patient beforehand to maintain a transparent relationship. Ensure that the insurance coverage is up to date and has not expired. Otherwise, the patient will have to pay out of pocket, which is often difficult to collect.
Step 5: Prior Authorization
Different insurance companies have specific rules regarding the prior authorization process for particular medical services. You need medical necessity for these procedures with ample proof to support the claim before approaching for a pre-auth. Keep in mind that the rules for the pre-auth process might be different for the private and government entities.
Step 6: Co-payment and Deductibles
At the time of the medical service, the patient needs to pay the out-of-pocket expenditure that their insurance company does not cover. This process can be challenging to handle since most healthcare systems fail to collect the payments during this period. Convey the details of any financial assistance services that the office provides so that the patients know their options well and the cash flow of the organization remains stable.
Step 7: Coding of Services
Coding is one of the most critical steps to get a clean claim and proper reimbursement. Ensure that the coders are up to date with the latest changes in the coding guidelines from the federal authorities. Conduct regular staff training programs to make sure that you don’t miss out on revenue due to outdated codes. Keep an eye on the 2022 Medicare and Medicaid updates from the CMS for better understanding.
Step 8: Claim Submission
Once all the codes are in the proper place, fill out the claim form and submit it to the insurance company. Points to note do not let the claims pile up so that the reimbursement comes on time. Before the submission of the claims, re-check the format and the assigned codes so that you do not leave out any information. Remember that a complete claim with all necessary data stands a better chance of getting accepted.
Step 9: Claim Reimbursement
Once the insurance company receives the claim, they cross-check it within their system to assign the proper reimbursement that they deem fit and in accordance with the patient’s policy. Any denied service or lack of papers could lead to a decrease in the reimbursement amount. The insurance company will send the Explanation of Benefits to convey the reasons for the denial.
Step 10: Claim Denial Management
Even though the billing teams do their best in ensuring a clean claim for submission, most of the claims are partially or fully denied by the insurance company due to several other reasons. You need to have a proper denial management workflow in place to ensure that you re-submit the rectified claims on time or with supplemental documents that the insurance asked for.
Step 11: Review for Payment Variances
You might end up getting paid a different amount than what you applied for in your claim due to several reasons like lack of medical necessity or incorrect coding of major/minor surgeries. Review the amounts once the reimbursement comes in and appeal to the respective insurance company with the necessary documents.
Step 12: Patient Collections
Collecting the remaining due amount from the patients is one of the most challenging phases in the 13 steps of revenue cycle management. Following up with the patients regarding their dues with the proper explanation of the insurance coverage is crucial to ensure proper collections. RCM companies appoint dedicated task groups to follow up on the patients to make sure that the revenue cycle stays strong.
Step 13: Financial Evaluation
Evaluate the finances from the revenue cycle in the organization to make meaningful decisions for the future. Data analytics reports provided by RCM software or customized reports from RCM companies can prove to be highly beneficial in this case. Reports will highlight where you are doing good and which areas you need to focus on.
We hope this article helped you understand the 13 steps of revenue cycle management and how you should update them in 2022. Please connect with us in the comment section below in case of any queries. Subscribe to our blog for regular articles on the medical billing industry. Follow us on Facebook, Instagram, Twitter, and LinkedIn for more.