What is the Revenue Cycle?
A revenue cycle is a general term that is used in business and accounting which expresses or presents the journey of a service or a product to its sale from its humble beginning. So we can say that a revenue process starts when any provider delivers a product or a service and it gets paid for the given service or product. The revenue cycle covers all functions of the clinic or administrative which contributes to management, capture, or revenue collected by patient service. In this article, a complete study of revenue cycle, RCM, and all terms that are related to it are discussed. This article explores the idea of billing in terms of the revenue cycle in the healthcare sector.
Let’s discuss some fundamental steps of the revenue cycle which involves in all healthcare centers and hospitals. A revenue cycle involves the following mentioned steps.
The capture of charge:
It renders medical services into charges that are billable.
Submission of claim:
It contains a claim which is submitted to the insurance company for the billing process
It’s about CPT codes and procedures
It’s about collecting data on patient’s coverage and insurance
It’s about collecting data to establish a medical record about a patient and to collect information about clinical and financial requirements.
Process of remittance
It’s a process by which a payment can apply or rejected.
Follow up by the third party
It’s about payment collection from Insurers of the third party.
Study and examination of medical services that are necessary.
Revenue cycle management
Revenue cycle management which is commonly known as RCM is a financial process that actually utilizes the software of medical billing. This software is used to facilitate the healthcare sector in terms of registrations, appointments, visits, and final payment. As a matter of fact, RCM simplifies the clinical and business sides of a healthcare sector by combining data of administration which is of the patient’s name, name of the company which is providing insurance, and some other information which is related to patient treatment and healthcare.
One of the key components of RCM is to communicate with health insurance. So, it’s a general practice that whenever any patient schedule a visit or an appointment then the staff of the hospital properly check and observe the insurance coverage reported by the patient before the visit. After this step, the next step is to study the nature of treatment provided by service providers, and then the healthcare center categorize it as per ICD-10 code. Health care staff sends the summary of whole treatment which is given to the patient to the patient insurance company along with ICD and ICP codes. This process is done to check how many portions of care would be covered up by a policy of insurance plus it’s a kind of remainder with the patient’s billing process.
Value-based care along with RCM
It is a perception of some experts that systems of RCM provide help in the transition of payment over the industry. It has diverted the concept of fee for service to reimbursement that is of value-based. RCM overlooks the patient population and it allows providers and payers to oversee the details of each other. It helps to see the provider about the portion of patients who are suffering from chronic diseases plus it also allows them to monitor and observe the aimed data and to mention any abnormalities.
Revenue cycle and healthcare
As a matter of fact, each healthcare and hospital is concerned about the best outcomes for the patient. To gain this goal one thing is to be considered which is an operational solidity of the business side of provider systems. It indicates about a clear and vivid focus on the revenue cycle like from start to finish plus the continuum of patient care. For the healthcare sector, revenue cycle is about everything. Its starts from the moment when a patient creates his/her account to the care package or surgery. In order to make the revenue cycle to work, it should be predictable. It means that the overall process of a patient should be executed precisely. A small error at any stage can cause lots of confusion and conflict which may slow down the billing process and may impact some negative action.
The financial performance is determined by the medical practices on billing operations. One of the most important decisions is to determine the gatekeeper for the billing process so we can say that revenue drivers play a vital role for creating well revenue and to maintain the revenue cycle. A revenue cycle contains all steps that include from patient’s appointment to a billing process. Front office task is to make a schedule about appointments, learn about insurance availability of a patient, eligibility verification and all those tasks which are related to clinical care. Back office tasks are to submit claims, posting of payment, processing of statement and managing all denied claims. So the point is as perfect as you tackle these tasks as soon as you get your full amount for the services.
Internal revenue drivers are of front task designers that examine the capacity of the provider, volume of patient and payment for the services. Generally, all healthcare centres easily tackle internal revenue drivers. But when it comes to external revenue drivers then a less efficient system can be observed in all sectors.
A key component for a revenue cycle in healthcare is an education
A complete awareness about revenue cycle and its benefits should be circulated into hospital staff by live sessions, online learning and by webinars. It will ensure that all staff of hospitals such as nurses, doctors, coders and support staff have learned the importance of the revenue cycle. A general perception is that a revenue collection and billing are considered as necessary evils. A well run system helps it very well. Its allows the providers to focus on their tasks that are to take care of the patient while support staff manages all collection of revenue cycle and billing process.