For businesses, the management of revenue is quite crucial. Cash inflow should always be sufficient to cover the expenditures. The medical industry relies on Revenue Cycle Management also known as RCM, to guarantee the success of any hospital no matter how big or small they are. When a hospital has an efficacious RCM system, healthcare centers and organizations can focus on providing the best treatment for their patients.
Understanding The Basics: Revenue Cycle Management (RCM)
The process of collecting revenues, payments, and handling of bills is referred to as Revenue Cycle Management. The cycle of revenue management starts when the customer is billed and ends with the collection of all the remaining payments. The process of RCM is an intricate one in the healthcare industry since it involves a number of different steps.
There are several different tools that are implemented to guarantee the smooth procession of RCM along with bringing in a good amount of profit. It is through revenue management that medical institutions are able to have a definitive base for earning proper revenue by offering their services.
Why is revenue cycle management important in healthcare?
When there is a proper foundation of an accurate revenue cycle, any medical institution can focus on the services they provide to their patients without having to worry about anything else. These are some of the reasons why hospitals should opt for revenue cycle management systems.
1. Precise reimbursements from insurance companies
Any medical institution wants to meet its financial goal, and that is only possible when they receive the proper reimbursements from insurance companies. When there is a proper revenue management system healthcare institutions focus on the well-being of their patients by providing them with correct and specialized treatment.
A well-consolidated coding and billing system leads to precise claims that have little to no error at all. It also helps in looking into payments that are still due from patients. All of this helps in higher revenue generation. In the healthcare industry alone, 1% to 2% represents the contractual discrepancies that exist along with 2% to 4% represents denials of payment inaccuracy.
2. Reduction of bad debt
When price evaluation is precise it helps the patients to know the costs upfront. This allows the patients to trust the hospitals since patients will know that there won’t be any hidden costs involved. Medical institutions always try to provide transparency with their prices for every procedure. The whole process allows the medical organizations to get the payment beforehand thereby avoiding bad debt altogether.
Patients are the root cause of bad debts, this happens when they have not paid the full amount of their medical bill. This forces the medical institutions to make up for the loss till the time the patient pays the medical bill fully.
When patients understand the monetary part of the bill, it leads to lesser surprise bills which in turn helps in increasing the competition locally, thereby decreasing the sum total cost. This is where a revenue cycle management system can prove to be effective.
3. Negotiating commendatory payer agreements
Revenue cycles benefit from the agreement negotiations since it provides a window of opportunity to the medical institutions for improvement. For instance, hospitals will notice if the patients are paying more amount of money when it comes to the high deductible schemes. This will make them change their strategy of negotiation with the insurance company.
Considering these things, it is important to remember that agreement negotiations allow medical institutions to discuss a settlement, leading to better repayment of all the rates for medical organizations. However, since there are a number of agreements with different insurance companies (both commercial and government-owned), the management of data can pose to be quite a challenge. This is more so since all the data which is collected must be accurate.
4. Reduction of errors
Revenue cycle management software keeps track of all the financial transactions that take place which makes everything more convenient. This software also helps in the reduction of errors when it comes to the processes of claims submission. Data professionals in the healthcare organization are adept at using this software.
Medical billing software is programmed in a manner that allows it to scan for errors and mistakes automatically, and if there are any it sends alerts about the same. Top medical billers use this software to reveal the patterns of the claims that have been denied and helps in the recovery of lost income.
5. Helps in making patient payments easier
RCM software helps in settling patient payments by sending constant reminders through emails and text messages. Messages and emails containing payment reminders have links that direct the receiver straight to the payment portal through the use of data tools. With the combination of the patient’s health history in the system, the management tools help in the simplification of interactions.
Whether it is the scheduling of appointments or the process of checking insurance eligibility along with billing, revenue cycle management keeps track of it all. The entire process helps in the smooth running of the ecosystem without any faults, thereby leading to patient contentment along with a speedy revenue generation.
RCM programs help in understanding the algorithm that plays a major role in integrating records and the billing system. The data that gets collected helps in understanding the trends that exist among the patient population. Through an upgraded method of tracking and understanding the satisfaction of the patients along with controlling the cost measures, leads to proper reimbursements from the insurance companies.
6. Simpler overall process
When there is a straightforward and secure system that is provided to the doctors, administrative staff, physicians, coding specialists along with others, it helps in the overall improvement of the entire revenue cycle. The best revenue cycle management system not only helps in minimizing errors and mistakes but also lessens the confusion among everybody.
The performance and strength of any medical organization depend on a number of factors. A good quality revenue management system not only provides the proper data but also aligns the interests of the medical organization in a way that leads it to the road to success.
Besides them, there are many more reasons why having a revenue cycle management system can prove to be a boon for hospitals. If you are looking for a reliable provider of RCM, Synergy HCLS can be an excellent choice.