Revenue cycle management is one of the highest priorities in a healthcare organization. But recent reports like the one put forward by the credit agency Equifax show that the provider organizations lose $1300 on an average every day due to incorrect billing procedures. These errors are more common in the case of bills with a large amount. Revenue leaders opine that apart from advanced technology and workflow changes, revising the basic RCM steps is another way the staff should solve this problem.
While healthcare systems grapple with the pressure of staff shortage, the in-house billing team must be trained well enough from the basics to handle the massive volume of medical billing every day, especially with the return of elective care post the surge in the Covid-19 wave. This article has summarized the seven key steps that your billing team should be thorough. Read on to know more.
Registration of the Patients:
- Registering the patients in the clinic or hospital’s system is one of the most vital steps of financial management that prove to be rewarding every step of the way if done correctly.
- During this step, the administrative team gets hold of the patient’s details like demographics and insurance information. They also need to verify the patient’s eligibility through the clearinghouse.
- Once the clinic gets all this information, the accounts manager will get specific details of the patient’s insurance like coverage, co-insurance, deductibles, and co-payments.
Pre-Authorization:
- Pre-authorization is another crucial step in the medical billing process but often leads to a dispute between the physician’s office and the insurance companies. The billing team needs to focus separately on getting the authorization on time with the correct documentation.
- Pre-auth is the step where the insurance company or the payer office determines whether the patient actually needs some specific medical procedures, prescribed drugs, or advanced lab tests. It works as a screening process for the payers to see if the patients are being fairly treated.
- However, the procedure takes up a pretty long time to get completed and also gets rejected, leading to a dispute between the hospital and the payer. The billing team should allot separate times for this step to work out fine.
Charge Capture:
- Charge capture is the third among the RCM steps but the first to occur after the patient has received treatment for their condition. All other vital procedures like the pre-auth and patient registration happen well before any actual treatment is done.
- The coding team goes through the medical procedures and the diagnosis supplied by the physician, captures the charge, and enters the codes corresponding to the treatment done. They also use modifiers to indicate whether a procedure was of high complexity and required improvisations in the process.
- The coding team must remain on top of the latest changes in the coding guidelines given by the CMS to make sure that the reimbursement occurs appropriately. Health systems also make use of automation software, in this case, to refine the process.
Submitting Claims to Payers:
- Though articulated in one step, claim submission is the toughest and requires one of the most thorough jobs among the RCM steps. The billing team takes the codes from the coding team and prepares the final bill to be reimbursed by the payers.
- A professional team will make sure that the claims are clean at the first go itself so that they do not end piling up on the follow-up stacks. They take several measures to scrub the claims properly and filter out any misplaced code or wrong demographic detail that might get the claim rejected.
- The final claims then reach the clearinghouse, from where they get sent to the different payers. It is crucial to cross-check the patient coverage details and other information before submitting it to ensure that the reimbursement does not face any issue.
Payment Posting:
- Payment posting is one of the RCM steps to complete a cycle in the reimbursement process, though the explanation of benefits needs to be looked at to know where the reimbursement amounts could be maximized.
- The insurance carriers receive the submitted claims, go through the details and determine the procedures to be reimbursed. As the billing team receives the reimbursement along with the explanation of benefits, they update it in the patient’s account. While some do it manually, many others have shifted to complete digital means.
- The billing team must study the EOB clearly to understand where their reimbursement requests were rejected and how they can re-submit those claims with the proper documentation to realize the cash.
Accounts Receivable Follow-up:
- Following up with the insurance company on the status of accounts receivable is one of the most complicated RCM steps. The amount due for reimbursement when sitting for too long leads to aged AR, which becomes difficult to retrieve.
- Healthcare organizations need well-equipped billing teams who are quick to follow up regularly with the payer’s counterpart. They must also know how to put up the right argument with well-researched documentation.
- Professionals at leading RCM companies are well experienced in reducing the days in AR so that the cash flow of the healthcare organization remains strong and the reimbursements come in faster.
Collection from Patients:
- Though the system of balance billing the patients is a thing of the past, after taking the claims through the insurance carriers, the billing staff contacts the patients to collect the required co-payments and deductibles.
- With the growing burden on patients for payment of the deductibles, it is advisable to have a standard policy of patient collections while they visit the healthcare office. RCM experts also suggest that the financial expectations should be set at the time of patient registration itself to make sure that the collection process is hassle-free.
- The other practice followed by leading practices is sending out monthly account statements for the patients to review. This healthy practice keeps the patient in the loop so that they do not receive any surprise bills, which become difficult to collect.
We hope this article helped you understand the 7 RCM steps to follow to improve your financial performance. In case of any queries, connect with us in the comment section below. Please subscribe to our blog and follow us on LinkedIn, Twitter, Instagram, and Facebook for more such articles on the medical billing industry, technology, and financial management.