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The 9 Steps of Revenue Cycle Management in Healthcare

RCM Cycle Steps of Revenue Cycle Management

Revenue Cycle Management is the most crucial foundation of the successful healthcare organization. Without an efficient billing department, highly efficient practices often scramble to sustain as they could lose out on thousands of dollars in payer reimbursement and patient payments. Thus, understanding and executing excellent RCM is essential for the success of the organization.

The revenue cycle management is the process that involves executing all clinical and administrative functions that contribute to capture, manage, and collection of patient service data.

In other words, it encompasses the entire revenue cycle from the time of appointment till the time the patient’s bill is paid in full.

Know more: Revenue Cycle Management (RCM): Why Do we Need to do it well?

Below steps comprises of the revenue cycle management.

Step 1: Pre registration

The first step in revenue cycle management is pre-authorization and registration wherein patient’s insurance and financial information is gathered. Demographic and insurance information is generally collected from patients when they schedule an appointment.

The revenue cycle starts here wherein the necessary information needed for the next steps of the cycle is gathered. As soon as the patient registers with the physician, medical billing companies take their medical record to create the claim.

Step 2: Registration

This next step serves as a validation that all required patient registration information was already gathered during the per-registration.

After the verification process, billing experts also check patient’s responsibilities for instance, co-payments, deductibles and out-of-pocket expenses.

Step 3: Charge Capture

In this step, charges are captured on the bill from the service and then submitted to the insurance provider. This step is crucial in make sure that throughout the revenue cycle, hospitals will get fully reimbursed by the payers.

Step 4: Utilization Review/Medical Transcriptions

Health insurance companies review a request for medical treatment – The purpose of this review is to confirm that the plan provides coverage for the medical services. It also helps the company to minimize costs and determine if the recommended treatment is appropriate.

Step 5: Medical Coding

Now, is the time to assign medical coders to medical transcriptions. Proper coding of diagnoses and procedures ensures accuracy and maximizes reimbursement. The process is essential as it simplifies the billing process because it is hectic for payers to read the complete medical history of patients.

Step 6: Claim Submission

Submitting accurate and timely claims maximizes the revenue collected in order to prevent delays. Medical billing solutions which consider the whole revenue cycle with claim submissions right from the first step help boost the practices’ ability to collect the full payment amount.

Step 7: Remittance Processing

In this step, hospital Account Receivable team analyze the payment received by the insurance provider or payer to determine if the payment was approved or if there was an error causing the payment to be delayed.

In order to avoid rejected payments, we need to ensure the data is correct and up-to-date. If an error is reported, the claim gets directed to the clearing house where they are in charge of reviewing and clearing the claim so it can be sent back to the payer for correct payment amount.

Step 8: Insurance Follow-Up

Based upon the terms agreed upon during payer contract negotiations, the Hospitals are able to collect payment from the third party payers (commercial and governmental). The most common issues are underpayments, denials, and non-payments.

Step 9: Patient Collections

This process involves monitoring accounts that are outstanding and pursuing payment of those balances from patients. Due to high-deductible health plans, as patient financial responsibility continues to increase, patient collections are becoming more critical to revenue.

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Akash Saini
Akash is an editor of Ok Easy Life. He is an atheist who believes in love and cultural diversity. Reach out to him at