75% of healthcare organizations deployed a revenue cycle management system in 2020. One reason for this move is so that hospitals can automate more processes, making remote work more feasible.
Yet, another reason facilities have a renewed interest in the healthcare revenue cycle is that it can help with collections.
Sound too good to be true? Then you need to know about the six steps of the revenue cycle in healthcare and why they’re critical for your practice. Keep reading for everything you need to know.
1. Patient Scheduling
When you’re dealing with a new patient, the first step of the revenue cycle is scheduling. This is when you’ll collect the patient’s insurance information and enter their personal data into your EHR.
2. Insurance Verification
Once you have the patient’s insurance information, the next step is to verify eligibility.
Many hospitals still verify patient insurance the old-fashioned way — they call the insurance company for verbal verification. Some payers also provide secure website log-ins to verify insurance online.
More and more these days, hospitals also deploy software systems to verify patient insurance eligibility automatically.
3. Copay Collection
The third step in the revenue cycle happens on the day of the patient’s appointment. Based on the information you received from the previous step, you’ll charge the new patient a copay before he or she sees the provider.
Collecting payment upfront, before the visit has multiple advantages. Most importantly, upfront collection prevents you from having to bill the patient after the visit if they sneak out before you collect their copay.
4. Submitting the Claim
After the patient leaves the appointment, it’s time to submit the insurance claim for the visit. When you get this step right, you’ll ensure your business reduces denials and gets the maximum return on services rendered.
Well-trained medical billing staff is critical to success here. The average healthcare facility should be getting 5% or fewer claims denied. It’s a bad sign if you’re seeing more than 10% of claims denied.
So, what do you do if your billing technicians aren’t up to the job? Luckily, there are medical coding and billing training programs that get your staff up to speed.
5. Claims Management
Claims management in itself is a multi-step process. It includes:
- Updating the patient file
- Paying out approved claims
- Billing the patient for claims that were denied
But when your staff submits the claim right the first time, you can skip right through this step. That’s yet another reason why claims submission is perhaps the most important part of the revenue cycle.
6. Payment Collection
If a payer pays out on a claim and there’s still a remaining amount due, the final step in the revenue cycle is to collect that balance. The same thing goes for a patient claim that an insurance company denied outright.
These days, patients have various options for paying what they owe. They could make a payment outright or sign up for a patient financing plan. Some hospitals offer automated payment plans, too.
What happens if you get this step wrong? You could end up with outstanding patient balances that haunt your accounts receivable. And studies show that the majority of providers turn over patient balances in arrears for more than 90 days to collectors, which will cost you even more.
Days in accounts receivable should preferably stay below 30–40 days. Any balance that goes uncollected past 50 days should be a red flag for your organization.
Why Healthcare Revenue Cycle Management Is Critical for Your Business
Running a healthcare company is a business. But when you don’t treat your revenue cycle that way, it’ll cost your organization in the long run. And we aren’t just talking money.
Here are three more ways poor revenue cycle management is impacting your bottom line.
Wasted Time
When a patient’s balance sits in collections, you have to wait longer to get reimbursed. Not to mention the fact that you have to pay someone to collect the balance.
The same is also true of incorrect coding. When you don’t bill the payer right the first time, your staff will waste valuable time trying to correct the error. And all of this wasted time could be better spent caring for patients.
Reduced Patient Experience
Billing a patient is perhaps the most important interaction between patient and provider. That’s because failing to foster a non-toxic collections environment could damage patient trust.
Sending out surprise bills or hiring aggressive collectors are two of the top complaints from patients when giving providers bad reviews. And studies show that when patients stop trusting their providers, their health outcomes suffer.
Bad Reputation
Getting the revenue cycle right the first time prevents you from having to put a patient in collections. And this is a good thing. Because patients who have to deal with collectors are more likely to leave your facility bad reviews.
You don’t have to let bad reviews pile up due to poor revenue cycle practices. Instead, you can work with a revenue cycle management company like Healthcare Revenue Cycle Solutions.
Stop Losing Money to Coding and Billing Mistakes
The healthcare revenue cycle encompasses all the steps it takes for your providers to get paid. The cycle starts with proper patient scheduling and ends with patient payment collection. Get these steps right and you’ll save your organization time, money, and so much more.
Ready to train your employees to be billing and coding experts? You’ve come to the right place. Contact us today to find out how our training program can support your administrative staff.