What constitutes the revenue cycle? The answer to this question is not simple. It depends on the size of the healthcare organization. One thing that is abundantly clear is that the revenue cycle has many moving parts and many individuals play key roles in ensuring that the cycle keeps churning.
Here’s an overview of the activities comprising the revenue cycle:
Payer contracts
Generally held to be the foundation for all payer interactions, contracting ensures that reimbursement remains consistent and timely. In order to manage the revenue cycle effectively, health systems, hospitals, and physician practices need to be aware of their contract rates with payers.
While state and federal payers use fixed-fee schedules based on geography, commercial payers can have schedules that vary. A comparison of payer reimbursements and contracted rates is necessary for resolution conflicts and potentially negotiating new or revised contracts.
Appointment scheduling
Patient flow is crucial to the revenue cycle. Missed appointments lead to lost revenue. Effective methods for reminding patients of their visits and handling cancelled or missed appointments translate into higher total charges and reimbursements.
Providers are only as productive as their schedules allow. Appointment scheduling is both an opportunity to create an efficient patient flow and collect information about the patient prior to registration.
Patient registration
This is where the revenue cycle starts in capturing data about the patient. The quality of the information gathered here will have downstream implications for everything that follows. Staff must be aware of the minimum amount of information that must be captured.
Healthcare organizations need to assess how they collect patient’s demographics, verify insurance coverage, and schedule appointments in order to close any gaps in patient capture. Inaccurate patient data can easily become claims denials, painful collections, and a costlier revenue cycle.
Coding and charge capture
This is where the provider’s work is translated into coding encounters and procedures. Coding must be a priority when managing the revenue cycle be-cause the codes assigned to services determine the healthcare organization’s reimbursement.
Electronic health records are effective in improving clinical documentation but ultimately the timing of the coding avoids inefficiencies and escalated cost. That being said, without the right level of documentation a health system, hospital, or physician practice runs the risk of non-compliance and potentially becoming subject to repayments, fines, or loss of contracts with payers.
Claim submission
Whether submitting claims directly to payers or through a clearinghouse, claims needs to be re-viewed and in many cases scrubbed to make sure information is neither missing nor incorrect. This information comprises patient demographic and insurance information, procedure codes, diagnosis codes, provider information, site of service, and provider or organization to be reimbursed. A periodic quality review of claims will ensure that practices are in place to keep claims consistently clean.
Accounts receivable follow-up
Closely monitoring lag time from claim submission to payment can help accounts receivable identify average durations of payment and when action is necessary.
As a rule of thumb, more expensive claims should be addressed first before moving on to lesser claims. Denials and appeals are of a more pressing nature and a more immediate plan of action needs to be established to address these quickly.
Perhaps the most difficult and delicate of all A/R follow-up activities are patient statements, which require members of staff to be accurate, efficient, and consistent while at the same time accessible. No matter the circumstances, policies for escalating efforts must be clearly stated and enforced.
Denial management
Denials can easily lead to lost revenue; in fact, they already do. The rate of claim denials needs to be kept and check. A quick turnaround is necessary to make this happen.
Denials should also be treated as opportunities to improve claims going forward by determining their root causes and communicating to providers and front desk staff the practices that must be avoided.
RCM reporting
What’s the point of managing the revenue cycle without the ability to analyze the process as a whole and its individual parts?
When a healthcare organization is able to able to identify trends and areas of underperformance, it can make proactive rather than reactive decisions. The revenue cycle is a continuous and ongoing process in which refinement and improvement are always possible. source
