Impact Insights

Revenue Cycle Management – What Does It Encompass?

I was recently at a client and the definition of Revenue Cycle Management was questioned.  One of the project leaders wanted to parse out Registration and Scheduling from Revenue Cycle.  I objected and this is why:

Revenue Cycle Management includes all the administrative and clinical functions, processes, and software applications that contribute and manage the registration, charging, billing, payment and collections tasks associated with a patient encounter.

In a nutshell it means taking steps to ensure that you are paid for services timely.  It begins when a patient calls in for an appointment and ends when the balance on the account is zero.

When implementing a new EMR/EHR, organizations have numerous opportunities to improve data collection to ensure it is correct from the beginning. Organizations can:

  • Require specific data elements at the time of scheduling, check-in, admission, etc.  The more information that you can collect before the patient arrives the less you will have to do on arrival – and you will be better prepared to verify eligibility, coverage, address verification, etc.
  • Create rules/edits to ensure that the appropriate format is used for payor ID’s, Social Security numbers, names, etc. The rules or confirmations can be used to ensure that ALL the data that is needed is present.
  • Verify eligibility and coverage before the patient presents.  Be sure to verify insurance coverage for the service date, not the date on which the appointment was scheduled. A patient’s insurance coverage might change between the time the appointment is scheduled and the time they arrive.  If you perform the checks two or three days before the date of service your staff will be able to get recent coverage information, and have time to contact patients with issues.   Ask these patients about alternative coverages and inform them of your organization’s patient financial responsibility policy.
  • Review denied claims on a routine basis.  The reasons for the denials can include incomplete or inaccurate insurance information, lack of pre-certification or prior authorization, past filing limits submission of claims, or a denial due to lack of meeting medical necessity. Best practice is to trend and track the denials at the time of posting the payments. Denials should be tracked by payor, type of denial, and provider. When a trend is identified staff should be informed and processes put in place to avoid the denials in the future. By working the denials in a timely manner, processes can be corrected on a timely basis.
  • Offer patients online bill pay and e-statements.  Reduce the costs and delays of billing patients via mailed statements by offering options to receive and pay bills online. Even patients who receive paper invoices by mail will appreciate the convenience of paying online, which also reduces your administrative processing costs.
  • Create baseline metrics to monitor productivity, turnaround time, etc.  If you know how you were doing before a go-live event then you can use preliminary metrics as your baseline and setting expectation. Common metrics might include:
    • Pre-registration rate
    • Insurance verification rate
    • Percentage of patient schedule occupied
    • Days in total discharge not billed (DNFB)
    • Days in total discharged not submitted to payor (DNSP)
    • Claim denials – volumes, amounts, types
  • Establish strong training and communication.  Staff must be properly trained and/or educated.  If one person does not understand how incorrect data entry (insurance information, patient demographics, etc.) — or how their job in general – affects the revenue of the organization, then they may not realize the importance of their role.  It is important to establish strong communication around the Revenue Cycle Management team.  Every person might understand their piece, but they may not understand how their piece fits into the big picture.

In closing, Revenue Cycle Management – if managed appropriately – starts as soon as the patient initiates a visit to your organization. Taking the time to ensure that you have each piece (scheduling, registration, insurance verification, etc.) work flowed out with metrics in place day one, will ensure that you will have much less work to do later and that the issues you are working through are the correct issues to be focused upon.