Revenue cycle management (RCM) is a vital practice for companies across all industries, helping ensure that incoming revenue is always sufficient to pay for outgoing expenditures. For hospitals, clinics, and other healthcare organizations, though, RCM is especially important due to the complex nature of billing and revenue collection within the healthcare industry. To help you create an RCM strategy that will help keep your healthcare organization financially stable, we need to understand what RCM is and the crucial role that it plays for companies in the healthcare industry.
What is Revenue Cycle Management?
On the surface, RCM is a relatively simple process to understand. The revenue cycle begins when a company bills a customer and ends when that customer pays their bill. For many companies such as retail stores, this entire process can be carried out in a matter of minutes and is something that is rarely even discussed. In these instances, a customer makes a purchase, is billed for their purchase, and pays their bill all at the same time and location. For healthcare organizations, though, RCM isn’t quite so straightforward.
The RCM process that healthcare organizations are required to follow thanks to the complex nature of billing and revenue collection within the healthcare industry entails a number of different steps, including:
- Claim Preparation – The RCM process for healthcare organizations begins by collecting a patient’s information, including information regarding their eligibility and insurance coverage. This information is typically collected during or prior to the patient’s first appointment with your organization.
- Claim Submission – Once a patient’s insurance information has been collected and the service they came in for has been provided, healthcare organizations must then create a claim, enter and code the charges for that claim, and submit the claim to the patient’s insurance provider.
- Claim Management – After a claim has been submitted to the patient’s insurance company, healthcare organizations are then required to actively manage the claim and address any disputes that might arise from the insurance provider charged with paying it.
- Receivables Collection – In addition to managing the claim that is submitted to the patient’s insurance provider, healthcare organizations are also often charged with collecting payments such as copay directly from the patient. This process entails issuing statements to the patient and, if necessary, turning their bill over to a collection agency.
The Importance of Revenue Cycle Management
For healthcare organizations, the process between rendering services and collecting full payment is much more complex than it is for companies in any other industry. Even in the best-case scenarios, this complex process can create significant delays between the time that a service is rendered and the time that payment is received, making it vital for healthcare organizations to approach RCM strategically in order to ensure that their incoming revenue is always enough to cover their expenses. In the worst-case scenarios, the lengthy and complex RCM process means healthcare organizations usually undergo costly mistakes, confusion, and wasted time. To maximize efficiency, limit the potential for costly errors, and increase the likelihood of payment, it is essential for healthcare organizations to develop a thorough and strategic RCM process.
Optimize Your Organization’s Revenue Cycle Management With Help From Bikham Healthcare
At Bikham Healthcare, we understand the vital importance of RCM when it comes to keeping healthcare organizations financially stable. Through our industry-leading RCM services that include access to cutting-edge RCM software and expert support, we are able to help healthcare organizations across the country manage their revenue cycle in a way that is more efficient, effective, and less prone to costly errors. If you would like help to manage timely submissions of claims and patient bills, create processes to help leverage Bikham Healthcare’s expertise and software to manage your reimbursements, reduce the amount of time your staff spends on RCM while at the same time creating an RCM process that will be as successful as possible, we at Bikham Healthcare are able to help. To learn more about our proven RCM services, be sure to contact us today.
