Healthcare Compliance at Ankura includes advisory services for Revenue Cycle Management (RCM). You may wonder, what is RCM and why is it important? It is a common misconception that RCM is a finance concept that does not impact the rest of the organization when in fact, a well-functioning revenue cycle not only improves a company’s financial performance but also creates more satisfied patients by streamlining and simplifying the payment process.
So, what is Revenue Cycle Management? RCM is the process used by healthcare systems to track revenue and collect cash. The Revenue Cycle consists of three primary phases:
- The “front end” or patient access
- The patient encounter
- The “backend” or patient financial services
Within each phase, there are numerous activities that contribute to an efficient RCM process, starting when a patient makes an appointment and ending when all the claims and payments from the patient and insurer have been collected. Successful completion of each step along the way is reliant on having the right people, processes, and technology to support it. The revenue cycle is truly a “cycle” - each step feeds the other and the success, and efficiency of each step depends on other steps. When full payment for a service has been received and reimbursement has been attained, the cycle ends.
One pain point in RCM is denials – the inability to collect for services rendered. Implementing processes to reduce denials is critical to a successful RCM, as well as overall profitability, and the front end of the revenue cycle is key. In this phase, accuracy is key - even with the aid of streamlined technology, human or computer-based mistakes such as duplicate data and typos can arise and create a hassle for patients and employees. In some cases, something as simple as a missing signature in a patient’s chart can lead to claims denial.
The first step of the revenue cycle is scheduling a patient for an appointment and registering the patient. Gathering the right information upfront through scheduling and pre-registration lays the groundwork for claims to be processed and cleared effectively.
The next step of the revenue cycle is patient eligibility verification and authorization. Eligibility snags are one of the most common reasons a claim is rejected, requiring rework and payment delays. To ensure success, it is recommended to check information for patients every time the patient comes through the door.
Collecting the right information before services are rendered goes a long way to increasing efficiency and improving the patient experience. When done well, these front-end revenue cycle steps support all subsequent phases of the revenue cycle and lead to an increased likelihood of payment, enhanced patient communication, and high-quality care delivery.
© Copyright 2022. The views expressed herein are those of the author(s) and not necessarily the views of Ankura Consulting Group, LLC., its management, its subsidiaries, its affiliates, or its other professionals. Ankura is not a law firm and cannot provide legal advice.