Revenue management is essential for every healthcare facility, but what exactly is the revenue cycle management (RCM) process?
RCM is the process of managing the entire life cycle of a claim from submission through payment. This includes pre-authorization, adjudication, coding, authorization, and post-payment review. The goal of RCM is to improve the efficiency and accuracy of services provided by healthcare providers.
A good RCM system helps ensure that payments are timely and accurate. Also, it can help reduce costs and errors. Keep reading to learn more about the RCM process in medical billing!
What is the RCM Process in Medical Billing?
Healthcare facilities need revenue to operate and continue to treat patients. Revenue cycle management is the financial process that healthcare facilities use to track patient care from registration to appointment to final payment. RCM marries the business and medical sides of the healthcare system by utilizing patient information, like patient name and birthdate, and the treatment a patient receives. Communication between the medical facility and the insurance companies is essential to proper RCM. An efficient RCM process can boost revenue, lower costs, and reduce exposure to bad debt.
Steps in the RCM Process
The RCM process has many steps, each with equal importance to the revenue cycle. Here are the steps in the RCM process and some important things to consider!
1. Pre-Authorization
When a patient calls to make an appointment, the RCM process has already started. During this initial point of contact, be sure to get the patient’s information, such as name, date of birth, insurance provider, and policy number. This insurance information is essential for the next step in the RCM process. Create a file or account for the patient and record their demographic information. This patient information will be used during the claims submission process, so it is crucial to gather as much accurate information as possible. From the start, always follow HIPAA regulations and ensure that all parties that handle patient files are aware of these regulations.
2. Insurance Verification
Insurance verification helps the medical facility determine the insurance status of the patient. This verification can help the provider determine what types of procedures and prescriptions are covered under the patient’s insurance, as well as determine any co-pays or deductibles.
3. Patient Visit
When the patient shows up for their visit, be sure to have them double-check their personal data and pay any co-pays or previous balances. Be sure to clearly state your facility’s payment policies so the patient knows their financial responsibilities.
During the visit, the provider examines the patient and specifies their diagnosis and course of treatment. This diagnosis and treatment will then be converted to a superbill during the coding step.
4. Entering and Coding Charges
After the patient leaves, their visit becomes a set of codes and charges. Medical coders and billers turn the diagnosis and treatment that a patient received into CPT and ICD-10 codes. These codes determine reimbursements from the insurance company.
5. Claims Submission
After the coder enters all the ICD-10 codes and modifiers, the bill is ready to go to a clearing house. The submission stage can be a make-or-break stage when it comes to reimbursements. The clearing house ensures that claims are free of error before sending them on to the insurance provider. If the clearing house finds an error, the claim will be rejected. If your claim successfully makes it through the clearing house, it will be sent to the insurance provider for review.
6. Denial and Rejection Management
Unfortunately, claim denial and rejection are common in medical billing. Be sure to have a clear process for promptly handling and monitoring denials and rejections. Medical billers can resubmit rejections without an appeal, but denied claims cannot be resubmitted unless an appeal is sent to the insurance provider. Denials and rejections can seriously impact your revenue stream, so it is important to avoid them or handle them with haste.
7. Reimbursement
If the claim is cleared by the clearing house, the insurance provider then matches the treatments that the patient received with their charges under their coverage limit. If the claims are properly and completely submitted the first time, the process becomes much smoother and faster and results in maximum reimbursement to the medical facility.
8. Collections
Oftentimes, the insurance provider will not cover all the medical expenses for a patient. Payment then becomes the patient’s responsibility. Be sure to send frequent payment reminders via email, text, phone call, or snail mail.
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