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Healthcare Revenue Cycle Management (RCM) is the financial process that organizations use to manage the administrative and clinical functions associated with different steps of patient care from start to finish [1]. The process starts when a patient schedules a visit for medical services and finishes when all claims and patient payments have been collected. In summary, revenue cycle management in healthcare serves as the strategy for streamlining processes, ensuring steady collections, and making healthcare providers financially viable.
With RCM in healthcare, the goal is to discover any possible problems in the revenue cycle and solve them before they become a bigger issue. It is extremely important for RCM in healthcare to run smoothly to keep your entire system working properly.
There are seven main steps in the revenue management cycle for healthcare. These include:
While healthcare providers are largely focused on the quality of patient care, there remains a level of concern regarding reimbursement and collections. The process from initial delivery to full payment is complex and implementing effective RCM is essential for to minimize the number of errors, increase the likelihood of payment, avoid aging accounts receivable, and improve overall profitability in health systems. Often there is a significant delay between services and payment collection, making it difficult to see the exact view of cost, spend, and revenue.
Managing revenue is essential for any business and focusing on improving the revenue cycle plays an important role in increasing claims efficiency while reconciling costs against revenues to optimize cash flow. In addition, the healthcare revenue cycle process houses important patient information and data leaks could have substantial legal ramifications. Ultimately, the goal of revenue cycle management in the healthcare industry is to develop a process that helps organizations get paid the full amount for services as quickly as possible by identifying points of friction and resolving them.
There are many benefits to efficiently managing your revenue cycle such as improved patient satisfaction, maximized monetary benefit, reduced administrative burden, and simplified processes.
This article was authored by Yera Patel. Yera is a senior associate with expertise in performance improvement and non-labor cost reduction engagements at Pathstone Partners.
