The Essentials of Revenue Cycle Management in Medical Billing
Revenue cycle management (RCM) is the process of managing and optimizing all administrative and clinical functions that contribute to healthcare revenue, says AAPC.
It includes everything from patient appointment scheduling and registration to medical billing and payment collection. Effective RCM is crucial for improving revenue, reducing claim denials, enhancing patient experiences, and ensuring regulatory compliance.
In this comprehensive guide, we'll cover the key aspects of RCM as it relates to medical billing.
We'll discuss best practices, technology, metrics, and trends to help your medical billing process achieve peak efficiency. Read on to learn the essentials for maximizing your RCM performance.
Best Practices for RCM in Medical Billing
Implementing RCM best practices in your medical billing process is critical for success. Here are some of the most important best practices explained in more detail:
1. Conduct insurance verification and prior authorization
Verifying a patient's active insurance coverage and policy details is essential prior to delivering any services. It helps avoid claim denials or underpayments later on due to expired, inaccurate, or inaccessible insurance.
Calling the insurer or checking eligibility through an online portal can confirm coverage specifics. Securing prior authorization is also key for services that require pre-approval from the payer before billing. This authorization should be obtained and documented before scheduling the service.
2. Implement accurate coding and documentation
Clinical documentation in the medical record must also substantiate the codes by including all relevant details about the patient encounter, medical necessity, complexity, time, and resources involved.
Regularly auditing a sample of charts ensures billing and coding compliance. Focused coding education and coder evaluations help minimize errors.
3. Submit clean claims in a timely manner
Claims should be submitted to payers as promptly as possible after the patient visit, ideally within 7-14 days. Any missing information, illegible details, or incorrect codes will trigger claim rejections and payment delays.
Claims should be thoroughly reviewed for accuracy and completeness before sending. Electronic submission improves speed and prevents postal issues.
4. Monitor and appeal denials
Ongoing analysis of claim denial root causes should inform process fixes to prevent recurrences. Denials due to errors or lack of information should be promptly corrected and resubmitted.
Denials for other reasons like medical necessity may require further documentation and formal appeals to obtain payment. Persistent follow-up is key, as denial appeal approval rates are around 50%.
5. Offer patient-friendly payment policies
Providing payment plan options, pricing tools, and excellent billing customer service improves patients' financial experience and satisfaction. It encourages prompt payment, referrals, and loyalty.
Staff should be fully trained on financial policies and have access to resources to address patient questions and concerns.
6. Outsource complex billing services
Leverage experienced third-party medical billing services to handle intricate claims like auto accidents, workers' compensation, and facility fees.
Their expertise with payer-specific nuances helps maximize proper reimbursement for complex cases. It also reduces administrative burdens on internal staff.
Technology and RCM in Medical Billing
Here is a more detailed explanation of the technologies impacting RCM in medical billing:
1. Integrated practice management (PM) and EHR systems
Combined PM and EHR systems create a centralized platform to seamlessly share patient demographic, scheduling, clinical, and billing data across departments. It eliminates tedious manual data transfers between separate systems.
Appointment details, visit notes, codes, charges, and claims are automatically populated where needed to streamline workflows.
2. Artificial intelligence (AI) enabled systems
AI technologies like natural language processing (NLP), robotic process automation (RPA), and RCM structures are incorporating predictive algorithms. NLP can scan unstructured clinical notes and automatically select appropriate diagnosis and procedure codes.
RPA can gather patient registration details, insurance information, and other documents to accelerate workflows. Claims can be auto-adjudicated using rules-based algorithms to identify any red flags before submission.
3. Predictive analytics
Collecting RCM performance data like denial rates, collections, account receivables, and more allows benchmarking and identifying patterns over time. Statistical algorithms can then pinpoint process inefficiencies and predict future risks or bottlenecks. These data insights fuel targeted improvements.
4. Cloud-based, mobile platforms
Web-based, cloud-hosted RCM systems allow universal access from any location on devices like laptops, tablets, and smartphones.
It gives staff and even patients convenient billing management from anywhere while also reducing hardware needs. Critical data is stored offsite rather than on vulnerable on-premise servers.
5. Enhanced cybersecurity
Electronic RCM systems contain sensitive, protected health information and financial data.
Robust solutions like data encryption, multi-factor user authentication, role-based access controls, firewalls, antivirus programs, and regular security audits help safeguard confidential information and prevent fraud.
Key Metrics for RCM in Medical Billing
Measuring performance with RCM metrics is indispensable for monitoring outcomes and maximizing revenue. Some examples of key metrics include:
- Days in accounts receivable (AR): Lower AR days indicate faster payment turnaround. The goal is to maintain AR days below 45.
- First-pass claim acceptance rate: Higher rates of initial claims accepted and paid demonstrate cleaner claim submission processes.
- Net collection rate: The percent of collectable dollars actually collected shows overall billing effectiveness. Benchmarks are 95-98%.
- Denial rate: Lower denial rates prove more accurate billing and fewer write-offs. Aim for under 5%.
- Bad debt and patient refunds: Minimizing these indicates stronger collection procedures and financial policies for patients.
Emerging Trends Impacting RCM
RCM strategies must evolve to align with industry changes. Some current trends influencing medical billing include:
- Value-based reimbursement models like accountable care organizations (ACOs)
- Telehealth expansion increases access but brings new billing issues.
- Consumerism is pushing healthcare to offer pricing tools and payment plans.
- Increasing regulations like information blocking rules requiring APIs.
- Industry consolidation with large health systems and private equity acquisitions.
The Final Words
Revenue cycle management is integral to the financial health and viability of today's healthcare businesses. Optimizing RCM involves implementing best practices in medical billing, utilizing innovative technologies, monitoring key metrics, and adapting to industry trends.
With robust RCM, practices can reduce administrative burdens, capture more revenue, lower denial rates, improve patient satisfaction, and position their organizations for long-term success.
Want to take your Medical Practice's revenue cycle to the next level? AltuMED's end-to-end RCM solutions combine proven strategies with innovative technologies to drive financial growth.
Subscribe to Our Newsletter!
Subscribe to Our Newsletter!
Enter Your Email Address. We Promise We Won't Spam You