Revenue cycle management (RCM) is the core financial process of any healthcare organization. Medical practices, hospitals and labs all need to establish an efficient and effective RCM process if they want to survive and turn a profit. But what is RCM exactly?
The healthcare industry is different from many others, in that healthcare providers seldom know what they will be paid when they deliver their services. Moreover, there is a lag between delivery of care and payment, so managing funds responsibly and keeping accounts receivable moving is key to success.
Here’s a look at the basics of RCM for the healthcare industry and some of the options healthcare providers have when setting up their billing departments.
How does RCM work?
The process of RCM revolves largely around the “payers,” which are organizations like insurance companies, Medicare or Medicaid. As the name suggests, payers are the organizations that actually pay providers for their work. While patients will often have a co-pay due upon delivery of care, the vast majority of cost is billed out to payers in the form of a “claim.”
“Revenue Cycle Management is a complex term used to identify the entire cycle of the healthcare revenue billing process,” said Sean McSweeney, founder and president of Apache Health. “Each healthcare practice RCM process is different, but the standardized process includes insurance billing, patient billing [and] claim life cycles.”
Here’s how the process generally works from start to finish:
- Eligibility verification: A patient arrives at a medical practice. Their insurance eligibility is verified and essential patient information is recorded in the practice’s electronic health record (EHR) system.
- Charge capture and coding: The patient receives the practice’s services. The visit is coded into a bill using ICD-10 medical coding standards.
Read more: https://www.businessnewsdaily.com/10958-what-is-revenue-cycle-management.html