The Basics of Medical Revenue Cycle Management
Keeping a hospital running will involve not just offering quality patient care, but careful and smart management of hospital funding and coordinating efforts with various patients’ insurance companies. Medical RCM, or revenue cycle management, is the key to a hospital running smoothly and making sure that all financial transactions are fair and accurate for patients, the hospital itself, and insurance companies. There is ever-increasing need for such suave handling of finances at medical centers; the American population is ageing, and older patients, Baby Boomers and older, will often need care. In fact, by the year 2030, the youngest of the Baby Boomers will be 65 or over and 20% of Americans, about 72 million individuals, will be an older adult. By that time, six out of 10 Baby Boomers will be managing a chronic health condition, and medical RCM will have to keep up. Healthcare claims, medical claims, and software can all work together to make good, affordable health care possible.
Medical RCM in a Nutshell
According to RevCycle Intelligence, Medical RCM is the overall processing service that hospitals and other facilities use for claims processing, revenue generation, and payment in regards to administrative and clinic functions. Identifying, managing, and collecting patient service revenue is all a part of medical RCM. The whole process starts whenever a patient makes an appointment to get medical services and is finished when claims and patient payments are completed.
At the start of this process, administrative staff will take care of scheduling, insurance eligibility verification, and patient account establishment once a patient makes an appointment for medical services. During this per-registration step, a patient account is made by the employees detailing such information as medical history and various insurance coverages. This makes billing and collecting processes efficient and easy.
Next, the healthcare provider identifies the treatment being given and the correct ICD-10 code. This code will detail how much an entity will be reimbursed for highly specific treatments. In addition, the provider will handle charge capture, or documenting services into billable fees.
Once healthcare claims are created, they’re sent to government or private payers for reimbursement, and once an insurance company examines the claim, the healthcare organization will typically be reimbursed for their services, which can vary based on the patient’s coverage. Anything not covered by insurance is billed directly to the patient. Overall, a medical RCM is responsible for making sure that organizations are paid in full for their services as soon as possible. And in today’s digitized world, healthcare claims processing software can reduce the rate of error and ensure that the proper payments are made to the right party, and for the right patient.
Hospitals have every reason to keep costs down, and they make every effort to manage their budgets. A 2017 survey showed that 25% of American hospitals and other health care systems aim to lower costs by 1 to 5% over the next five years, and it has been suggested that most hospitals will have to reduce costs by a whole 30% within the next five years to stay competitive. On a related note, plenty of Americans now have health insurance for hospitals to work with: today, only 2% of Americans aged 65 or over do not have health insurance, a huge change from 1962, when 50% of Americans aged 65 or over had none. What is more, around 40% of Americans under aged 65 have employer-based health coverage of one kind or another. Medical claims management will have to keep up, but with up to date software and clear communication and transparency about costs, hospitals can stay in business without too much trouble working alongside any healthcare claims and processing service.