Revenue cycle management is the process used in health care to track the collection of payments for the rendering of health services from the scheduling of the patient's initial appointment with the provider. The revenue cycle management is categorized under health information management, which is a career field within health care administration. 

Steps In the Revenue Cycle Management

First step in the process is the start of a clean healthcare revenue cycle. Management starts when a patient schedules an appointment to seek medical services. When a patient schedule an appointment, they have to go through patient registration.

Patient registration is when a patient's demographics is entered into the electronic health record system. If the patient has health insurance, their insurance eligibility and benefits are verified. Eligibility and benefits allows the provider to know what types of services are covered under the patient's insurance plan. This information also includes the patient's copayment, co-insurance and deductible amount. Once the patient has been registered and their insurance and eligibility has been verified, they can now go ahead and get their appointment scheduled.

Step Two - Claim Submission.

The claim submission process begins after services have been rendered. The provider has already completed their notes and now it's time for the encounter to be coded. During the claim submission process, medical coders translate the medical notes into current procedural terminology or CPT codes in addition to CPT coding. Medical coders also go through to double check that all of the international classification of disease codes or ICD ten codes are there.

Each CPT code has a set fee or charge amount. Charge entry is when a CPT code along with its charges is added to a patient's account. The final step in the claim submission process is timely filing. It is imperative for claims to be filed to third party payers within a timely manner because third party payers have something that is called a timely filing limit.

The timely filing limit count starts on the day of service and it ends after a period set forth by the third party payer. For example, UnitedHealthcare has a 90 day timely filing limit after the date of service. So if you were to file a claim on the 91st day after the date of service that claim don't get denied for timely filing denied.

Step Three - Claims Management

After the claim has been adjudicated and processed by the insurance company, the provider will receive an electronic remittance advice also known as explanation of remittance. An explanation of remittance is an itemizes statement that shows the allowable amount for each CPT code built to that insurance company.

examples are the adjustment amount, the adjustment reason, the patient responsibility. So if the patient has coinsurance copayment deductible, it shows that amount. It also shows you need denials and denial reasons.

After the remittance advice is received, it is now time to post payments. payment posting in health care is a little more complex because everything associated with that payment that you saw on the remittance advice must be captured in payment posting.

Now that your payments are posted, you're going to take a look at the denials because that is also going to be listed on that remittance advice. You're going to see exactly which CPT codes were denied and what the reason was. And from there you're going to go ahead and correct those issues. So it may be a modifier and maybe a CPTcode. It may be that to diagnosis code isn't appended properly. there are so many reasons that procedures or claims as a whole deny. And once you update the claim with the proper information, then you want to go ahead and appeal that claim.

Step Four - Accounts Receivable Management or A/R Management

So in this step, it's all about the money. We are trying to get all of the money in the door and that's going to be from the patient, the insurance company. We just try to bring the money in. So if the patient responsibility was not collected upfront at the time of service, now you got to send statements to the patients to let them know, Example: " Hey, Mr. Joe  you have a balance of $100 and this is your co-payment, and now you want Mr. Joe to pay as expeditiously as possible.

A/R follow up with third party payers is also done in this part of the process. Typically, payers pay within 14 to 31 days after the claim has been submitted to them, and that's usually via electronic funds transfer. If you haven't received payment within 14 to 30 days after the claim has been filed with the insurance company, you're going to go ahead and do A/R follow up to get your claims.

Working towards recovering moneys from delinquent accounts is also a part of A/R management.

Step Five - Analytics

Analytics is where inefficiencies in the revenue cycle management process can be identified. For example, if you've noticed that there has been an increase in denials from a specific payer, you can go in and analyze the data, you can break it down to denial by CPT, code, denial by provider, so on and so forth, so that you can data mine figure out exactly where the issue is or  why you're getting those denials.

Once you have done your analysis, you can then take action on it. You can make changes to your coding, you can make some changes to your revenue cycle management process, whatever it is. You can go ahead and use that data that you have analyzed and make proper changes so that you can resolve the issue and decrease those denials.

Conclusion:

The end of the revenue cycle marks not just a financial culmination but also a comprehensive analytical process. Every patient segment undergoes this meticulous process, underscoring the importance of a robust RCM system for healthcare organizations. When executed effectively, RCM not only streamlines financial workflows but also enhances overall revenue performance.