The Importance of Income Cycle Management in Healthcare

The healthcare industry’s transition from fee-for-service to value-based care reimbursement impacts traditional RCM (Revenue Cycle Management) in different ways. Each healthcare organization or individual veteran professional must be financially balanced or strong to provide their uninterrupted services. This is a time when the best healthcare RCM service comes into play.

Revenue cycle management in healthcare is the financial process that makes it easy to control complex administrative processes and clinical functions, such as patient eligibility, claims processing, reimbursement, handling of denied claims, and revenue generation. .

RCM is the backbone of healthcare organizations helping them pay their bills, manage their resources, and much more. According to the international standards report, in medical billing, more than 25% of claims have been rejected and up to 40% of those claims are never filed again, that is, health organizations suffer a significant loss of income.

On the positive side, with a proper RCM process, the healthcare industry can reap the greatest benefits with a minimum of bad debt write-offs. To understand the exact phenomenon of healthcare revenue cycle management, you must first understand your basics in the medical billing process.

Sanitary RCM basics:

• It begins with the designation of a patient to seek medical assistance and ends when the healthcare organizations collect their payments.
• Initially, the health group administrative staff manages a number of processes such as scheduling, insurance eligibility verification, and patient account creation.

“From a revenue cycle management perspective, the flawless presentation of patient information at the time of scheduling and patient registration improves the healthcare organization’s cash flow.”

• After the patient is treated, the claims filing process begins. An advanced coder submits claims with the correct ICD-10 codes, the codes define the value of the refund, and an approved code prevents claim denial.
• Then comes the important part of private or government payments. They evaluate the values ​​of the claims, check the details, i.e. insurance coverage, contracts, etc. and refund process.
• Most claims are rejected due to incorrect coding, incomplete patient accounts, errors in the patient’s medical record, etc.
• Then comes the last revenue cycle management result, that is, the maximum claim reimbursement. RCM helps healthcare organizations get the maximum claim reimbursement paid on time with fewer denials.
• After that, AR tracking is done by health care groups or individual veterans where they create health care claims, that is, manually or automatically, and submit them to various insurance companies.
• In the final stage, that is, payment recording, the medical billing management software records the payment of each patient with accurate information, including the patient’s name, account number, denial information, dates of service, etc. For future reference.

Importance in health care:

It can help healthcare organizations track the exact performance of their financial growth. They can easily determine claim approval and denial rates through the proper RCM process. With a flawless RCM process, healthcare organizations managed their medical billing process effectively and resolved their claim denial issues quickly.

Here are some of the key benefits of an effective RCM:

• Fewer claims denied
• Better patient care
• Higher refunds
• Flawless administrative records, meaning no other penalties or fees
• Faster turnaround time for claim payments