The words “medical billing” and “RCM” are used almost interchangeably, so let’s consider the distinctions between the two. Medical billing refers to the documents for filing medical reimbursement claims. On the other hand, RCM provides a number of additional resources, including financial pipeline monitoring and review and patient financial services. It offers all the required activities necessary to get the bill through, beyond only filling out and filing the paperwork.
Medical Billing within Revenue cycle management
Proper and accurate medical billing is necessary for payment to be obtained by a medical practitioner or hospital. Medical practices and clinics will have no means of raising income from medical care without reliable medical billing. A healthcare service’s revenue cycle starts with medical billing and medical coding. Incorrect billing and coding implementation will result in rejected payments, slowing down processing and payment, and adversely impacting the revenue cycle.
Among other aspects, monitoring of rejected claims, seamless medical coding, and errorless medical billing lay the foundation for a healthcare service’s revenue cycle management.
Medical billing is only one function in the revenue cycle management (RCM) process. In order to control your healthcare organization fully, the secret to the sustainability of the institution is revenue cycle management. Although it involves the medical billing elements, analyzing, monitoring, and accurately controlling the status of the patient reports on the accounts receivables goes beyond payment posting.
Let’s take a look at the steps involved in Revenue Cycle Management.
Steps in the Revenue Cycle Management Process
1. Pre-registration- Collecting Details before the Patient Arrives
This first step in the revenue cycle ensures the proper gathering of information regarding patients, their needs, and a basic idea on the part of the hospital about how they will be managing the patient. From the patient’s point of view, it saves time filling out the waiting room paperwork so that they can see their doctor quicker. And it also helps them understand their out-of-pocket expenses in advance so that they do not incur unexpected bills.
From the hospital’s standpoint, there is a greater chance that patients will pay their bill on time, by encouraging them to see their estimated out-of-pocket expenses for treatment, reducing sources of poor debt for the clinics.
Patient names, personal records, medical history, and health and payment details are usually provided during the pre-registration stage.
2. Registration- Collecting Patient Data
This following stage fills in as approval that all necessary patient enrollment data was accumulated during the pre-registration. If there is an error in the pre-registration form, it should be rectified by the patient immediately in order to avoid any issues later on.
If the misinformation is not rectified, it could lead to dismissed claims for the patient and delay in the reimbursement for the hospital.
3. Charge Capture- Converting Medical Services into Billables
Charges are made for the medical services rendered and sent to the insurance company. This progression is essential in guaranteeing that throughout the revenue cycle, clinics will get completely repaid by the payers, a term frequently alluded to in the business as revenue integrity.
4. Utilization Review- Health Insurance Agencies Audit a Request for Clinical Treatment
The review is conducted to ensure that the medical services rendered are covered under the insurance policy of the patient. It enables the organization to limit costs and decide whether the suggested treatment is suitable.
5. Coding- Properly Coding Diagnosis
Health services and drugs are easily accessible at clinics today, so coding is required to decipher descriptions of services, procedures, equipment, and conditions into numeric or alphanumeric codes. While these codes are unessential to the patient, it assists medical institutions with managing procedures easily. Professional medical billing services utilize these codes to make insurance claims and bills for patients.
6. Claim Submission- Submitting Claims of Billable Charges to Insurance Agencies
After the healthcare services have been coded into the administrative system, the following stage requires hospitals to present those claims to the insurance agencies so the payment can be handled by the particulars of the plan. In case of an error, the claim isn’t sent to the insurance agency. This can cause an all-encompassing deferral in hospitals getting their reimbursement from the insurance providers.
7. Remittance Processing- Applying or Dismissing Payments
In this stage, the hospital’s administrative staff examines the payment received from the insurance company or payer to decide whether the installment was endorsed or if there was a mistake causing a delay in the payment.
Once more, dismissed payments occur due to incorrect or insufficient information of patients at the time of registration. As soon as the error is reported, the claim is pushed to the clearinghouse where they are responsible for passing the claim. It is then sent back to the payer for the right payment sum.
8. Insurance Follow-up- Collect Installments From the External Payers
Hospitals are now ready to collect payments from the payers as per the terms settled during the payer contract discussions. The most widely recognized issues are underpayments, dissents, and non-payments.
If the medical organization is not happy with the payer’s repayment, they will address and change those rates during the following round of negotiations.
9. Patient Collections- Determining Patient Balances
This cycle observes records that are outstanding and follows up with patients for those payments. As the financial responsibilities of patients keep on increasing because of high-deductible plans, payments have become an important part of the revenue.
As revenue cycle management in healthcare continues to advance, it is the hospital’s obligation to maintain the highest level of patient-driven satisfaction by functioning as one unit. Every department must have its objectives defined. To maintain parity between all sections of the staff, medical institutions can also seek revenue cycle consulting to give them a better idea of how to manage their accounts.
This requires the contract information to be exact and a smooth communication channel to ensure medical staff can uphold the revenue cycle.