fusion point research Marketing Research Reports

Marketing to Revenue Cycle Management Leaders in Healthcare

Understanding Their Role

Revenue cycle management (RCM) is the most important, and the most challenging, process on the business side of hospitals. The revenue cycle includes all of the steps a hospital takes to receive reimbursements for its services. It begins when a patient schedules an appointment and continues through a series of steps touching virtually every aspect of the hospital’s operations until final receipt of payment.1 2

 

Hospitals define their revenue cycle process steps differently, but generally they include:

 

  • Scheduling – when a patient sets an appointment, the hospital pre-registers the person, verifies their insurance, finds how much of the total cost of the procedure will be covered by the payer (insurance company, Medicare, etc.,) determines what conditions and requirements the payer demands, and provides the patient with financial counseling if necessary.3
  • Admissions – on the day of the procedure the patient is registered and admitted into the hospital. The hospital generally contacts the payer to ensure the patient is still covered, and creates a patient ID number and health record.4
  • Coding – all chargeable services and items must be captured and attached to the patient’s record when the patient is receiving care in the hospital. This “coding” process is an especially challenging part of revenue cycle management, and hospitals generally have billing specialists dedicated to improving charge capture. There are many legal and payer requirements the hospital must comply with to receive reimbursements.5 6
  • Billing – the hospital then generates a bill, or “claim”, electronically to the appropriate payer(s). Because of the extreme complexity of payer requirements, hospitals sometimes utilize a third-party expert to review all claims before they are passed to payers. Once the claim is submitted to the payer it becomes A/R (Accounts Receivable) on the hospital’s financial balance sheet.7
  • Reconciliation – the payer generates an Explanation of Benefits (EOB) for the patient, called a Medicare Summary Notice (MSN) by Medicare, which explains what parts of the claim will be reimbursed by the payer and which components the patient is responsible to pay. There are often disputes between the payer, hospital and patient which must be resolved before final reimbursement. This step requires analysis and audits by the hospital.8 9
  • Collection – finally, the hospital attempts to collect the payments. Outstanding A/R are generally classified by age (30-day, 60-day, etc.,) and the hospital will have policies by age category to collect internally, outsource collection of debts to a third-party, and ultimately sell or write-off remaining debts.10

 

The revenue cycle has long been a challenge for hospitals, but healthcare reform has made the process much more difficult and complex. Lower reimbursement rates, new coding systems, additional regulations, and a focus on health outcomes as opposed to procedures is requiring drastic change to how hospitals approach revenue cycle management.11 12

 

“Since we are in the midst of the most significant change in health care in the last 100 years, if you focused on just these huge changes and the unpredictability over the next few years it would be easy to lose focus on the individual patient and local community. Therefore it is helpful and grounding to take yourself back to the patient and the community, which you’re responsible to serve.”

- Chris Van Gorder, CEO of Scripps Health13

1 Mcbride, Susan, and Randy Notes. “Hospitals Must Mitigate AGA Revenue Loss.” Managed Healthcare Executive 24, no. 4 (2014): 42 – 43. EBSCOhost(97756632).

2 Colpas, Phil. “How Automation Helps Steer the Revenue Cycle Process. (cover Story).” Health Management Technology 34, no. 6 (2013): 8 – 11. EBSCOhost(87923539).

3 Griffin, Donald J. Hospitals: What They Are and How They Work. 4th ed. 40 Tall Pine Drive, Sudbury, MA 01776, 978-443-5000, www.jblearning.com: Jones & Bartlett Learning, 2012.

4 Ibid.

5 Veazie, Judy I. “From Patient Accounts Staff to Revenue Cycle Professionals.” Health Care Collector: The Monthly Newsletter for Health Care Collectors 26, no. 9 (2013): 5 – 8. EBSCOhost(85349351).

6 “Overcoming Denials: Start at the Beginning.” Health Care Collector: The Monthly Newsletter for Health Care Collectors 27, no. 6 (2013): 5 – 6. EBSCOhost(91651669).

7 Griffin, Donald J. Hospitals: What They Are and How They Work.

8 Veazie, Judy I. “From Patient Accounts Staff to Revenue Cycle Professionals.”

9 Centafont, David. “The Three Areas to Be Aware of When Preparing for Payment Issue Cases.” Managed Care Outlook 25, no. 23 (2012): 9 – 11. EBSCOhost(83760418).

10 Griffin, Donald J. Hospitals: What They Are and How They Work.

11 Colpas, Phil. “How Automation Helps Steer the Revenue Cycle Process. (cover Story).”

12 “10 Key Revenue Cycle Technology Considerations for the Future.” Hfm (Healthcare Financial Management) 67, no. 9 (2013): 1 – 8. EBSCOhost(90137834).

13 McLaughlin, Graham. “Making an impact: Chris Van Gorder, Scripps Health.” The Advisory Board Company. May 2014. Accessed 12/21/15, available at: https://www.advisory.com/Daily-Briefing/2014/05/30...

 

Feedback?

Not Required

Submitting Form...

The server encountered an error.

Message received. Thanks!

Copyright © 2016 Fusion Point Research, Inc.

Marketing to Leaders in Healthcare

Hospital revenue cycle management is the complex series of steps hospitals must take to receive payment for their health services. This process is one of the most important and difficult aspects of hospital management. The requirements of healthcare reform have made revenue cycle management significantly more challenging.
fusion point research Marketing Research Reports
Hospital revenue cycle management is the complex series of steps hospitals must take to receive payment for their health services. This process is one of the most important and difficult aspects of hospital management. The requirements of healthcare reform have made revenue cycle management significantly more challenging.
  • – when a patient sets an appointment, the hospital pre-registers the person, verifies their insurance, finds how much of the total cost of the procedure will be covered by the payer (insurance company, Medicare, etc.,) determines what conditions and requirements the payer demands, and provides the patient with financial counseling if necessary.
  • – on the day of the procedure the patient is registered and admitted into the hospital. The hospital generally contacts the payer to ensure the patient is still covered, and creates a patient ID number and health record.
  • – all chargeable services and items must be captured and attached to the patient’s record when the patient is receiving care in the hospital. This “coding” process is an especially challenging part of revenue cycle management, and hospitals generally have billing specialists dedicated to improving charge capture. There are many legal and payer requirements the hospital must comply with to receive reimbursements.
  • – the hospital then generates a bill, or “claim”, electronically to the appropriate payer(s). Because of the extreme complexity of payer requirements, hospitals sometimes utilize a third-party expert to review all claims before they are passed to payers. Once the claim is submitted to the payer it becomes A/R (Accounts Receivable) on the hospital’s financial balance sheet.
  • – the payer generates an Explanation of Benefits (EOB) for the patient, called a Medicare Summary Notice (MSN) by Medicare, which explains what parts of the claim will be reimbursed by the payer and which components the patient is responsible to pay. There are often disputes between the payer, hospital and patient which must be resolved before final reimbursement. This step requires analysis and audits by the hospital.
  • – finally, the hospital attempts to collect the payments. Outstanding A/R are generally classified by age (30-day, 60-day, etc.,) and the hospital will have policies by age category to collect internally, outsource collection of debts to a third-party, and ultimately sell or write-off remaining debts.