The revenue cycle is something that touches practically everything that is related to the healthcare industry. The process begins at the moment a patient books an appointment and ends when the insurance company pays all payments for the services that the healthcare provider provided.
Computer systems have become a common way to deal with the revenue cycle. In fact, they are going to be found in nearly all healthcare facilities around the world. While the goal of revenue cycle management is the same throughout every healthcare facility, healthcare reform has made the process more complex because of reduced reimbursements and the implementation of ICD-10 on October 15, 2015. While reform is necessary to bring more stability to the healthcare system and to ensure that mistakes are reduced so that the cost of healthcare can be under control at some point, there are challenges that come about. With the help of consultants in the area of medical revenue cycle management, it can be made a lot easier. Reform is only as challenging as some make it.
For instance, some physicians are looking into outsourcing their billing. This is a practice that continues to grow because physician groups and hospitals are not very good at these tasks at times. This is because they are “non-core tasks.” A survey in 2012 stated that 96 percent of organizations are in the process of acquiring a number of accountable care organization data solutions. This includes clinical decision support, health information exchange, RCM, electronic health records, data center security, e-prescribing, and data storage.
Revenue Cycle Management – A Top Priority
Any type of healthcare management needs to be a priority because that is how things are kept under control. Revenue cycle management will always remain an issue that is at the top of the mind as healthcare reform develops.
One component of revenue cycle management is accurate chargemaster. This is essential and it tends to be overlooked. Every transaction goes through the chargemaster before it is posted to a patient’s account. Up to 64 percent of hospitals are still using manual processes for their chargemaster updates and this is leading to revenue loss and risk of compliance violations. Charge-data errors can delay payment, but they can also lead to fraud and abuse or accusations of such when such mistakes are not intentional. It is necessary for any healthcare organization to move away from manual processes in order to maintain the chargemaster and move toward automated maintenance so that they can deliver more accuracy and efficiency.
Far Beyond Billing and Collections
Revenue cycle management does go much further than just collections and billing. It is important for healthcare management to include the identification of questionable business practices that can occur in revenue cycle management and billing and collections, as well as for all relevant individuals to understand language in contracts.
Physicians and facilities can actually leverage their revenue cycle systems in order to stop hemorrhaging money. This involves the computer systems and it is one of the applications of IT in healthcare that can resonate with those in charge of the finances of a facility, or its revenue cycle. On average, hospitals in the United States write off between three and seventeen percent of their revenue because payers deny their claims. Many of these healthcare providers are hemorrhaging money because of inefficiencies in their processes. Medical revenue cycle management that is fine-tuned is going to make a difference when it comes to coding errors, poor communication, and unbilled claims.
In a business that is low-margin like healthcare, the potential losses can be quite high.
According to Hospital Denials Management hospitals of any size lose approximately ten percent of the annual billed revenue in denials alone. This translates to a dollar amount of approximately $6.3 million per year for a hospital averaging around 185 beds that bills around $63 million each year.
Take into account an aging population and insurance companies tightening their claims processes, the numbers are expected to go up. Billing processing can be tighter, resulting in fewer errors and even fewer write-offs. Through better coding (ICD-10), better claims management, better payer management, and better payment resolution, less money would be lost in the medical billing process. That means a slower increase in costs, thus keeping costs lower for the patients.
If you are ready to start fine-tuning your billing processing so that you can have better revenue cycle management that minimizes losses, MD Pro Solutions can help you. Call us at 508-946-1665 for a free consultation or complete our contact form and someone from our office will contact you.