Author: Arup Pramanick

Revenue Cycle Management (RCM) can be defined as the process of tracking every stage of the patient care process, from making an appointment to paying the final bill.

It is a facility that uses medical billing software to maintain administrative data, including the financials and the patient’s medical or healthcare information (personal information, insurance provider, treatment procedure, etc.).

Components of RCM system

There are four aspects that are most important to keep in mind while creating an effective RCM system. Those are:

People

Be it patients or personnel in an insurance company, they serve as the foundation of a properly managed revenue cycle. Veterans in the healthcare industry are best suited to manage all aspects of a company since they have expertise in coding, compliance, electronic data interchange, customer service, billing, collections, and more.

Process

The RCM system ensures outcomes when it is strictly adhered to data collection, claim filing, processing of remittance advice, automation, specialized prioritizing etc. Information and discipline in work can be used to your advantage which leads to consistently improved performance.

Technology

It enables efficient tracking, automation, and engagement, and a big number of personnel may utilize it with little training and can be utilized throughout the whole RCM system that makes it possible for each step of the process to be completed swiftly, precisely, and consistently.

Information

To optimize any RCM, adequate data is required. Access to vital information presented in straightforward reports can help find issues and spot possibilities.Power BI is essential in the current industry for boosting productivity and revenues.

Stages of RCM

The RCM process is generally divided into four important stages. They are as follows and accordingly defined:

• Pre-claim: This stage involves the management of patient files and other related documents such as contracts of insurance etc. and finally making an appointment. The steps included in this stage are:
• Fee-scheduling: To promote more uniformity in the ratio of payments to charges, standardize the fee schedule as a single percentage of Medicare. Also, to balance the impact of charges on patients who self-pay or pay cash with the requirement so that your fee schedule could be greater than your reimbursement.
• Contract negotiation: To keep track of the important clauses in all important contracts. Obtain and sustain the best CPT (Current Procedural Terminology) code reimbursement rates for important payers.
• Provider Certification: Utilize a system for managing credentials that offers reporting on the state of the procedure.
• EDI/ERA Enrollment: EDI/ERA refers to Electronic claims and Remittance advice respectively. This stage also allied with Choosing an EDI/ERA supplier for data returned to the practice management system based not just on price but also on the accuracy of the data and the simplicity of the transaction.
•  Front-end (Patient visit): This covers all the events following an appointment such as scheduling, eligibility check, treatment, payment etc. Steps involved here are as follows:
• Patient Registration: verification of all the relevant and necessary documents from patients.
• Details for settlement: patients are asked for the settlement of their outstanding debt once the payer has decided on the claim, usually credit cars are used with a secured system.
• Coding & Documentation: To set up clearly defined policies for smooth transactions and also to keep track of those reports and charts made by providers.

Submission of Claim

The patient submits a claim at this point, and the insurance provider pays out either online or in cash. The transaction involved in this stage are divided into two events:

1. Claim submission and
2. Processing from the provider

I) Claim submission 

• Entry of payment: tracking and reporting of any kind of mistake during the payment processing should be done. Also, the timing between entry and processing must be properly recorded.
• Claim scrubbing: this is where the insurance company scans the medical claim for errors to deny it.
• Submission/EDI/Errors: this process also monitors the denied claims and keeps the track of time for re-submission of claims.

II) Processing from the provider

• Processing of mail: mails are processed everyday in different forms of letters to specific individual by following some significant guidelines.
• Processing ERA/EFT: it is important to set up precise posting guidelines so that you may compare rejected data from different payers with consistency.
• Reconciliation of Cash: Every payment should be balanced and reconciled on a regular basis (between the bank account and the practice management system’s recorded payments).

Back-end:

This stage is usually based on the payer (insurance company) and the patient.

i) From Payer View

• Check for claim status: is should be decided how many days after submitting a claim each important payer should get an EOB (Explanation of Benefits) and also be reported.
• Analysis of Rejections: all refusals and the reason behind them should be properly recorded for standardizing and ensuring uniformity amongst payers. Also, a proper review must be done for further improvements.
• Information requests: information that are needed for re-submission must be kept accordingly and should be answered in turnaround.Appeals: ‘date on last worked’ must be noted properly for open-claims in the appeal process and a process must be there for regular review of ‘zero-pay’ adjustments.

ii) From patient’s view

• Patient statements: sending more than three statements is not advised rather should send in a predictable basis especially through email to the patient.
• Payment calls: a specially trained crew should be there to answer patient payment calls and the rules must be Specified under which patient payment arrangements will be approved.
• Refunds: a regular and disciplined method with proper rules must be there for smooth refunds for patients.
• Collections: a consistent collection agency or process or strategy must be created for a better relation with patients.

Challenges for RCMs at the present time

The traditional idea of “billing and collections” is continuously evolving and growing. Almost every component of the practice is now included in the RCM. It is regulated, sophisticated, and becoming increasingly automated. Additionally, the distinction between average and extraordinary performance has become essential for practice.

Improvements that can be made in RCM

Any type of RCM service must consider the following changes accordingly

• Maximizing the performance to keep any amount collected because of declining reimbursement and increased expenditures.
• Minimizing cost because RCM expenses are only rising, while payment per claim is either same or even dropping.
• Compliance as the competition is more challenging than ever, and the stakes are bigger.
• Business intelligence because More complex data is required to power business.
• Alliance or amalgamation because RCM platforms depend on a developing ecosystem of technologies that must work together.
• Processes for RCM that are new and distinct from Fee-For-Service
• Direct payment option for patients as it is a significant source of income given the rising price of health insurance.
• Focusing on personnel as talent is more difficult to discover and keep (low-end pays attract less trained people, highly skilled workers are in demand and more difficult to keep).

Activities of RCM system

A few important functions performed by RCM are as follows:

• Periodic Closing: Create and adhere to a strict month-end close procedure that requires the completion of essential activities.
• Analysis and Reporting: Deliver a consistent, comprehensive monthly data package that trends all-important performance parameters. Each provider should receive a monthly scorecard on a single page. Create reporting capability to enable precise and in-depth studies to respond to specific queries regarding the RCM process or the performance of the practice.
• Performance Management: Review important RCM process metrics on a regular basis to spot performance gaps and improvement targets.
• Quality Management: Conduct routine evaluations of personnel performance and RCM expertise. Monitoring mistake rates at critical stages.
• Information & Technology: Use a practice management system that is completely functioning, has an open database for reporting and analytics and is simple to connect third-party apps. Offer online payment options to the patients through the website or other way available. Automate easy, repetitive operations wherever you can to save money, avoid mistakes, and free up workers to work on more important duties.
• Compliance: Conduct routine audits of the billing records and provider compliance data (E&M distributions, rejection rates, patient write-offs, refunds, usage of modifiers, etc.). Conduct routine compliance training for your personnel and providers.

Is there any need for outsourcing in RCM?

The employees themselves were the main expense in the past when RCM was a simpler process run by smaller teams with specific talents. Healthcare practitioners frequently depended on individual abilities and keeping this capacity in-house made sensible. This procedure turned out to be problematic when organizations grew and complexity rose. Employee skill sets were not uniformly standardized, which resulted in inconsistent performance and unrealized revenues.

As RCM technology developed over time, the market realized that outsourcing this job boosted profits across the whole cycle:

• Claims processing changed from being a human activity to a process supported by technology and aided by humans.
• Capital is needed for technology, which an outsourcer might distribute among several clients.
• The outsourcing company has the resources to invest in personnel and business intelligence technologies.

Advantages of outsourcing RCM:

• Eliminate interruption and time spent focusing on patient care.
• Receiving fair compensation for provided services.
• Streamline processes to improve productivity at work.
• Improve profitability by removing errors that reduce income and raise costs.
• Guard against fraud, issues with personnel turnover, system outages, technological obsolescence, and other threats.
• Develop the financial stability required for a stand-alone company.

Guidelines for Creating RCM Outsourcing Agreement

Any contract you sign should be fair and balanced, with clear expectations for the practice and the outsourcer. There should be clear legal safeguards for both parties, clear and simple pricing conditions, and means for resolving any problems that may emerge.

It’s crucial to check whether the contract clearly defines the services that the outsourcer will supply. The cost should be in line with the service’s scope.

Negotiating a contract with an RCM provider should always start with maximizing value for both parties. Although the specifics and amount of depth of contracts will always vary, there are several critical contract negotiation issues that all businesses should keep an eye on, including scope, pricing, length, and reporting.

Of course, pricing as well as the practice’s duties should be made clear. The contract should explicitly state the circumstances under which the agreement may be canceled, as well as the parties rights and obligations after termination. In general, both parties will wish to make sure of the following specific contractual obligations:

For Outsourcer

• obeying all applicable laws
• completion of services on schedule
• Retaining Required Documentation
• Audit, investigation, or legal action notification
• Data Security
• Restrictions on Data Sharing with Third Parties
• Transactions Compliant with HIPAA (Health Insurance Portability and Accountability Act.)

For Process

• certified medical practitioner
• Correct Representation and Documentation to Support It
• Timely Refund Processing
• Limiting Unauthorized Access
• Compliance and Coding

Conclusion

It’s crucial to realize that the people who coordinate and manage the software and system are just as critical to any outsourcing as the technology itself. Although the procedure is too complex to be entirely automated, RCM solutions allow employees to concentrate on high-value jobs (analysis, rules, rejections, and appeals, clinic integration, patient pay solutions) while automated services take care of the other chores.

The need of automating as many processes as feasible, including patient registration, eligibility verification, charge collection, claims status reporting, electronic remittance and money transfer, patient payments, cash management, and more, must thus be understood by enterprises. Automation may lower expensive mistakes, allowing personnel to concentrate on enhancing other RCM components, such as collections.

Clinics can assure fewer errors, precise claims processing, and quick payment recovery with the aid of RCM automation technologies. A successful medical practice depends on the initial collection of data for claims, the submission of those claims, and the effectiveness of payment.

Do you think outsourcing can really add value to existing RCMs in healthcare?

References

1. “Revenue Cycle | Patient Business Services | OHSU”. Ohsu.edu. 2013-04-16. Retrieved 2015-08-26.
2. “How to Improve Your Revenue Cycle Processes in a Clinic or Physician Practice”.
3. BHM Marketing. (2017, April 2). Common Revenue Cycle Management Pitfalls to Avoid. BHM Healthcare Solutions. https://bhmpc.com/2015/08/common-revenue-cycle-management-pitfalls-to-avoid/
4. “Healthcare IT Market size worth over $230bn by 2023: Global Market Insights Inc. |”. Medgadget. 2016-10-19. Retrieved 2016-10-27.