Healthcare providers today face unprecedented hurdles in providing great patient care while still succeeding financially. Providers are being impact by causes such as rising operational expenses and competition, evolving regulatory concerns, complex billing, and a global pandemic. They all underscore the need of top rcm companies ensuring that their revenue cycle management (RCM) is streamlined and efficient.
Businesses in practically every industry rely on RCM to bill their customers and pay their expenses on time. Transactions in retail, for example, can be perform nearly quickly.
However, revenue cycle management in healthcare is far more complex. It relies on both the administrative and clinical sides of patient care to interact effectively, beginning with pre-registration and continuing through treatment and complete payment.
Why Is Healthcare Revenue Cycle Management Necessary?
There are thousands of hospitals and providers in the United States, as well as over 900 payers. With so many moving components, actors, and touch points involved, as well as a continually evolving healthcare industry, the possibility of errors leading to waste-related expenditures is increasing.
On the other hand, the possibility for firms to reduce these errors through an enhanced sales cycle might result in millions of dollars in realized cash flow savings. It can also give them a competitive advantage by demonstrating their focus on patient care across the whole continuum of care.
The Value of the Revenue Cycle in Healthcare
The primary goal of a healthcare organization is to provide high-quality care to patients, which cannot be accomplish if the business is not first and foremost profitable. This underscores the significance of the revenue cycle in healthcare.
For example, one out of every five dollars spent on revenue cycle management is attribute to denials. While 67% of denials are recover, 90% are avoidable. Furthermore, statistics reveals that efficiently reducing denials can result in an additional $5 million in income for a typical hospital.
Medical Billing Company have long recognize the importance of revenue cycle management as part of daily operations, but unexpected changes in rules or regulations can further complicate an already complex process. When successful revenue cycle management is already in place, the firm is better prepared to deal with unexpected events.
Revenue cycles can help to reduce waste
It is estimate that between $760 billion and $935 billion of yearly healthcare spending (about 30%) is “waste.” The essential point for healthcare providers is that their ability to offer care for patients in the first place is strongly dependent on the health of their bottom line and their sustainability as a business.
Revenue cycles have the potential to simplify administrative policies
A main goal of revenue cycle management is to reduce administrative complications within businesses as well as between providers and payers.
According to McKinsey & Company, streamlining and automating care delivery tasks such as financial transactions, operational functions, customer and patient services, and administrative clinical support could save the healthcare industry up to $265 billion. In other words, $1,300 for each American adult.
Other aspects of daily hospital operations where revenue cycle management can help include:
- Coordination and proper delivery care
- Overtreatment avoidance
- Detection and reduction of fraud and abuse
- Pricing blunders
The revenue cycle bridges the gap between care and care business
Every healthcare provider, large or small, exists to offer the best possible treatment to as many people as possible. Of course, calling for an appointment is the first step for anyone who isn’t feeling well.
When this first touch point in the revenue cycle is appropriately manage, it puts in action a chain of events that directs the business from beginning to end. Stress can be lessened, potential claims or payment uncertainty eliminated, and the overall patient experience improved with precise information that accompanies the patient throughout their care.
Small to medium-sized clinics may place more emphasis on those who provide treatment. Physician burnout is a very real effect when doctors are responsible for not just seeing patients but also managing their income calculations.
Billing cycles are tracked and improved
While collecting what patients owe is the final phase in the revenue cycle, it is also one of the most difficult. According to the US Department of Commerce, an account that is 60 days past due has just a 70% chance of being recover. It only has a 30% chance of being pay after six months.
Furthermore, collecting from a patient can take twice as long as collecting from a payer
Every clinician today understands that interacting with healthcare insurance providers involves patience and industry knowledge. Revenue cycle management can make it easier to communicate back and forth between providers and payers by reducing filing errors and expediting denial resolution.
Revenue cycles give measures that can be use for analysis and improvement
Monitoring metrics inside revenue cycle management procedures allows practices to continue to improve the patient experience by providing more timely, transparent care – from the initial visit to treatment and billing.
COVID’s Impact on Healthcare Revenue Cycle Management
The COVID-19 epidemic has had far-reaching consequences in healthcare, pushing the revenue cycle into unprecedented territory.
When COVID arrived on our shores in early 2020, service disruptions were rampant, and the devastating impact was well recognized. Healthcare providers across the industry saw up to a 50% decline in visit volume, with essentially no effect on elective treatments that will exceed COVID care.
To that end, companies must continue to reduce the snowball impact on the front end of the process through correct medical coding and measurable documentation. The largest potential, however, may be on the back end with refused claims, no-response claims, and partly or underpaid claims, which can account for 20% to 30% of total claim traffic.
The bottom line is that COVID has ushered in the need for the next generation of healthcare models, such as adaptive payer models, telemedicine improvements, and value-based care. It will require healthcare revenue cycle management to adapt in order to steer the process and assure financial viability.
Should Providers Collaborate With Revenue Cycle Professionals?
Benefits can be gain across the continuum of a patient’s treatment with effective revenue cycle management, including:
- Increase in claims paid after the initial filing Lower denial rates
- Increase in net revenue Reduced accounts receivable outstanding
- Faster claim payment and fewer claims lost
- Staff stress is reduce as the process is simplified. The value to key stakeholders is increased.
The job of revenue cycle management might conflict with other administrative obligations and become burdensome for certain suppliers. Working with an outside business might not only alleviate some of that stress and error, but also provide access to resources that your clinic would not otherwise have.
Medical Economics advocates identifying the right RCM partner as an extension of your practice by ensuring they provide:
- Professional coders and billers
- Knowledge of your specialty
- Knowledge of your Electronic Health Records (EHS)
- Excellent reporting abilities
- Capabilities for billing frequency
- Proven denial methods
Continuum-wide Patient-Centered Care
Healthcare spending in the United States continues to rise at a rapid pace, with a projected total of $6.2 trillion by 2028. With so much volume and so many touch points in the process, there is a genuine possibility of waste and revenue loss. Effective revenue cycle management in healthcare can help practices run more efficiently and profitably while providing treatment to those in most need. When they most need it. Connect with us today to learn more about revenue cycle management and how can assist your practice in assessing their current process.
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