Adequate revenue cycle management is key to a healthy practice. Click the links below to jump to each topic.
1. What is Revenue Cycle Management?
2. The Revenue Cycle Management Process
3. Factors That Affect the Revenue Cycle
4. Common Revenue Cycle Management Mistakes
5. Upgrading Your Revenue Cycle Management System
6. Revenue Cycle Best Practices
What is Revenue Cycle Management?
Revenue Cycle Management (RCM) is the process in which healthcare facilities and practices manage the entire billing lifecycle of the patient, from patient scheduling and registration to final payment. It is a critical part of running a hospital or other health facility and how effectively it is managed determines the success of the practice—regardless of whether you serve 50 or 5000 patients.
Most practices only collect 60 percent of their accounts receivable, which leaves 40 percent of potential revenue for the practice in limbo. The larger the practice or hospital, the larger that 40 percent figure becomes, which is why revenue cycle management and continual optimization is so important.
PaymentCare is a powerful all-inclusive RCM platformLearn More
PaymentCare™ is an all-inclusive revenue cycle management platform that optimizes practices in every aspect of their revenue cycle—from patient eligibility, to patient financing and payment processing.
The Revenue Cycle Management Process
Managing the revenue cycle involves establishing patient payment expectations prior to treatment. The practice administrator or dedicated revenue cycle manager in charge of how the facility executes the overall process will keep a watchful eye over the following eight steps.
- Patient Scheduling and Registration
- Insurance Eligibility Verification
- Copay / Deductible Collection
- Patient Exam / Treatment
- Claim Submission
- Claims Management
- Patient Payment Collections
1 – Patient Scheduling and Registration
The first step is scheduling the patient’s appointment and getting them entered into the system.
2 – Insurance Eligibility Verification
After the appointment has been scheduled, the next step is to verify the patient’s insurance eligibility. Traditionally this is done over the phone by calling the insurance company or logging onto the Payer’s website. However, some revenue cycle management systems, like PaymentCare™, provide automated insurance eligibility, eliminating the need to manually check insurance websites or call for verification. This can be done either one-by-one at the time of service, or in batches in order to expedite the process and verify eligibility and identify copays/deductibles before the patient walks in.
3 – Copay / Deductible Collection
Collecting the total copay or deductible before services are rendered is made easier by determining eligibility before the patient is in the office.
4 – Patient Exam / Treatment
When the first three steps are handled correctly, physicians can focus on what matters most: providing quality patient care.
5 – Claim Submission
Now that medical treatment has been provided, the next step is submitting a claim to the insurance company (Payer), in order to cover what the patient is not responsible for so far. PaymentCare™ lets you easily file claims with our network of over 800 Payers, plus minimize rejected claims with our automated system.
6 – Claims Management
Medical claims management involves all of the organization and file updates that go into the processing of medical claims related to patient diagnoses, treatments and medications. It especially involves making sure approved claims are paid out and denied claims are ultimately billed to the patient.
7 – Patient Payment Collections
This is the process of managing patient balances and providing payment options which can range from a one-time payment in full, to automated payment plans and patient financing. Whether your facility uses traditional paper or online statements, giving patients the ability to pay through an online payment portal and set up payment plans based on your billing policies is crucial to maximizing revenue. Using a tool like PaymentCare™ One Bill is helpful, as it consolidates all balances across your organization into one centralized statement to give patients a convenient way to manage and pay their healthcare bills.
8 – Reporting
Reporting is critical to managing the revenue cycle. In fact, it can make or break your practice. With robust reporting tools, you can manage the utilization of certain medical services, analyze accounts receivable and make reconciliation and end-of-day reporting easy. NTC Healthcare offers fully customizable reporting tools that integrate with practice management systems to provide in-depth analysis of your practice.
View Our Customizable Reporting SolutionsLearn More
Factors That Affect the Revenue Cycle
Several factors can affect a practice’s ability to maximize revenue collection and cut down on the time it takes for patients to pay. Below are some of the most prominent.
(Interested in learning how to overcome your revenue cycle challenges? Download our ebook to learn how you can help patients assume financial responsibility and boost practice revenue collection.)
Patient experience has by far the biggest effect on the revenue cycle, so it is helpful to conceptualize the patient experience as it relates to the revenue cycle and see how these two paths repeatedly intersect.
Informed patients are able to more effectively fulfill patient responsibilities than uninformed patients, so it’s critical that patients are aware of what is expected of them from the start. Explain their financial responsibilities before receiving service, explain their payment options, and make paying easy. Your patients will have had a better experience, your revenue cycle will be more effectively managed and revenue will increase. In addition, you should stay connected through a patient portal or other system that allows access to payment records, health records, and secure messaging options to the provider.
A patient who does not have health insurance (or whose health insurance provider denies coverage for treatment) will be required to pay the entirety of their bill. Of course, depending on their treatment, the patient could find the bill difficult to pay and result in lost revenue for the practice. For this reason it’s important to verify eligibility before rendering services and provide multiple options for payment, such as patient payment plans and financing, or an online payment portal.
Patient Collections & Billing
The patient payment collection process can be arduous and time-consuming. Without consolidated, organized systems, billing errors are common and often confusing which lead to patient frustration and delay in payment. By accepting any type of payment, offering the ability to set up payment plans, estimating patient financial responsibility and filing claims correctly—a practice can optimize the collection process and reduce the amount of accounts receivable that goes uncollected.
There are four main problems most practices and their administrators face when dealing with patient billing: the need to accurately estimate patient financial responsibility, sufficiently educating patients about their responsibility, patients that take a long time to pay, and patients who don’t pay at all.
You can handle the financial responsibility problem by providing them with an estimate of their cost of care before treatment and offering tools such as financial counseling to help them understand their part. But to handle the latter two problems, patient collections must be simple, direct, and timely.
Ensure that patients are offered a wide variety of payment options to remove barriers to payment. Consider offering a consolidated online portal where your patients can pay for services across your entire organization. You can also look at implementing financing options for self-pay or high-deductible patients in order to maximize revenue capture during the initial contact. Implementing these strategies will shorten the revenue cycle and improve your practice’s bottom line.
Compliance & Data Security
Especially in today’s climate of security breaches and major hacking efforts, the compliance and security of your healthcare data is critical. The safety of patient information is part of offering a critical patient experience, and a practice whose data is not secure and is breached could will affect its revenue cycle and be hit with major fines from the Credit Card Associations and the US Government.
5 Ways You Are Violating HIPAA Without Knowing It
How Your Healthcare Payments Provider Should Be Helping with Data Security
Using Security Technology to Protect Patient Data
Are Your Practice’s Emails Violating HIPAA?
Fighting the War against Healthcare Data Breaches
Four Reasons Your EHR Should be Integrated with Payment Software
Common Revenue Cycle Management Mistakes
Consistent and effective revenue cycle management is something every healthcare practice or facility wants, yet most continue to make simple mistakes that affect their ability to collect payments and maintain a dependable revenue flow.
While many of these mistakes seem small, they can pile up if not properly regulated, and failure to take the right steps to fix them can compound the problem and end with claims being left unprocessed or overdue bills uncollected. Below are some of the most common revenue cycle management mistakes that you can easily avoid by taking proactive steps.
Failure to Verify Eligibility
Studies indicate that nearly 25 percent of practices fail to verify eligibility up front. By insisting on eligibility verification for every patient as part of your practice’s revenue cycle management policy, you could decrease future bad debt and help your patients by preventing them from accruing out-of-pocket costs they didn’t anticipate.
Failure to Provide the Patient With an Accurate Out-of-Pocket Estimate
As copays increase and the cost of care continues to rise, patients are finding that their financial responsibility for medical care has grown beyond what they can easily afford. To achieve an effective revenue cycle management process, practices must consider the financial impact of treatment costs on patients and prepare them as much as possible for these costs. In many cases, advanced warning of an upcoming financial burden can allow patients to set aside funds or find additional sources of funding to make costly procedures possible. Inaccurate estimates, however, can land patients in greater debt than they’re prepared to cover, leaving practices to deal with the unpaid costs and lingering bad debt as a result.
Failure to Collect Payment at Time of Service
Communicating to patients that they will be required to cover copays and other costs prior to service eliminates confusion and promotes healthy revenue cycle outcomes. Patients often respect payment rules easily when they are communicated up front. Failure to inform patients about these obligations ahead of time, however, can usually lead to frustration, resentment and lost patients. The conversation about this policy should take place immediately upon scheduling appointments or becoming a new patient.
Depending on the patient load and the practice’s billing needs, many organizations fall victim to understaffing in revenue cycle management and accounts receivable positions. Without adequate resources to manage the billing and collections process, your practice can fail to reach out to patients in a timely manner, resulting in lost revenue. Consider hiring additional help if you are experiencing a lot of lost revenue.
Failure to Provide Enough Payment Options
It is worth mentioning again that the key to increasing the percentage of patient statements you collect on is by making the payment process for as straightforward as possible and providing multiple payment options. Give patients the option to pay as they’d like, whether that’s with a payment plan, upfront, with a check, credit card — whatever it may be. Doing so increases the likelihood that they will pay.
Questions to Ask to Avoid Common Errors in Patient Payments
Three Barriers to Good Revenue Cycle Management
Three Things To Avoid During Patient Collections
Educating Practice Managers on Revenue Cycle Management
Upgrading Your Revenue Cycle Management System
A practice with an outdated practice payment system or that is using multiple software systems to manage the revenue cycle should look into upgrading their software. Below are some of the biggest to switch revenue cycle management systems.
Use Our Revenue Calculator to See if Your Practice is Maximizing RevenueLearn More
- Data Security
- Available Integrations
- Increasing Write-offs and Bad Debt
A thorough review of revenue cycle practices and procedures can reveal gaps and opportunities to increase collections, reduce rejected claims, eliminate paper and help support patients in planning for their newly acquired financial responsibility through updated software systems. Download our guide to switching practice payment systems to learn more.
(Could your outdated practice payment system be costing you money? Use our revenue calculator and learn how an updated system could improve your bottom line.)
Revenue Cycle Best Practices
As you build or adjust your revenue cycle management plan, the following best practices are some ways to ensure your revenue cycle is as efficient as possible.
Set Clear Patient Expectations
Set clear expectations for your patients and outline their payment responsibilities from the start in order to avoid surprises and increase the probability that they will pay their balance in full.
Understand your financial data through a wider lens. Generating weekly and monthly financial reports will allow you to view payment trends over the course time, and identifying trends can help you predict patient behavior and anticipate certain concerns, as well as target problem areas that need your attention.
Identify and Resolve Problem Areas
As mentioned above, analyzing trends in your financial data can help you identify problem areas in your revenue cycle and develop a plan to resolve them.
Offer Multiple Payment Options
Payment plans, patient financing, online portals, you name it — offer multiple payment options to the patient and shorten your revenue cycle.
Submit Claims Daily
Never let claims fall behind. Submit your claims daily, submit appeals daily, and troubleshoot on any coding issues that are occurring too frequently.
Phone calls, automated text options, and automated email options are all available to practices. There’s no reason you can’t reach out and remind your patients of their appointment or balance.
Schedule a Demo of Our Revenue Cycle SolutionsLearn More
Let NTC Healthcare help your practice manage its revenue cycle more effectively. Contact us today to set up a live demo of our powerful revenue cycle management solutions.