Revenue Cycle Management (RCM) in medical billing is a process that healthcare providers and medical facilities employ to ensure the efficient and effective collection of payments for the services they render. Keep reading to find out all about Revenue Cycle Management (RCM) in medical billing and its importance for medical practitioners.
What is RCM, and how can you benefit from it?
The process of medical billing and revenue cycle management serves as the financial backbone of any financially prosperous healthcare practice. When done properly, RCM can help to improve the cash flow of the business, reduce claim denials, improve patient care, while reducing administrative burden.
The RCM life cycle
To understand how the RCM functions, below is the RCM life cycle.
- Pre-registration stage
As the first stage of the cycle, groundwork, such as information gathering about the patient and their insurance. Also, this allows the healthcare provider to verify the insurance eligibility of the patient, which will enable a smooth billing process.
Information gathering and recording is also the main objective here, but in a more comprehensive manner than the pre-registration stage. Medical history, clinical records, and insurance history will be looked at thoroughly here while validating the information gathered in the pre-registration stage.
- Charge Captures and Coding
Documenting the patient’s visit and associated procedures is the main goal of this stage. For this process, using specialized medical codes such as CPT and ICD are most common in the industry.
- Claim Submission
As the name suggests, submitting the claim to the respective insurance company is the goal of this stage. So, to avoid denials or rejection by the payer, billers must ensure the accuracy and completeness of the information.
- Patient Billing
At this stage of the billing cycle, after the insurance payment is received, the remaining balance will be billed to the patient. Copayments, non-covered services, and deductibles are common here.
The final collections stage kicks in if the patient fails to settle their payment in the specified time period.
Challenges and Future of RCM
Developing and maintaining a solid RCM is not an easy task. There are many challenges that medical billers have to overcome to reach the appropriate revenue level. Some of these challenges include,
- Staying up to date with regulatory compliances that change constantly.
- Billing, coding, and manual errors that can lead to denials, rejections, underpayments, and regulatory errors.
- Challenges faced when performing patient collections.
However, with the advancements in both technological and medical fields, there are a lot of ways that medical practices can overcome many of these challenges. So, it is safe to assume that the future of medical billing and RCM is getting brighter.
Pro tip – Hiring a medical billing outsourcing partner is one of the
With this article, you now must have a good idea about what medical billing and RCM are and their importance to medical practices. So, take every possible step to optimize the RCM of your business to stabilize its finances.
For more information, get in touch with Invoisync and contact our expert medical billers. We are fully capable of providing you with assistance in optimizing your RCM.