In today's rapidly evolving healthcare landscape, managing the financial aspect of medical practices has become just as important as delivering quality care.
This is where Revenue Cycle Management (RCM) steps in—a structured process designed to ensure healthcare providers get timely payments for the services they provide.
While this process has long been utilised in the USA, Australian healthcare organisations mainly concentrated on the service provision aspect of healthcare than the revenue management aspects of their businesses. Reactive claim management seems to be the widely adopted mechanism here, to collect payments for the services provided. Instead of focusing on just collecting payments, if Revenue Cycle Management principles and processes are adopted, significant benefits can be achieved.
What is Revenue Cycle Management?
With any 'buzzword', it's important to ensure there is a thorough understanding of the actual purpose behind it. That's why at MWBS we have adopted the tenants of Revenue Cycle Management (RCM).
RCM involves the process of tracking and managing patient bills from the initial appointment to the final payment. It includes every administrative and clinical function involved in the billing, payment, and collections process. Essentially, it bridges the gap between providing healthcare services and getting paid, ensuring that practices can remain financially sustainable and reducing bottlenecks and communication gaps that are commonplace when adopting a more micro-based process strategy for your finances.
RCM involves a series of steps, including patient registration, insurance/Medicare verification, claim sanitisation, timely claim submission, payment collection, and account management. By streamlining these processes, healthcare providers can minimise errors, reduce delays in getting payments, reduce underpayments, and there by significantly improve cash flow.
Key Factors in Effective Revenue Cycle Management
It's important to get RCM right. Though the process may be complex, having the trained professionals to handle this can assure a more efficient cash flow and a reduction in administrative wastage.
Several factors contribute to the success of RCM. It requires a re-think in standard mindsets to properly adopt it to gain its benefits.
To ensure optimal outcomes, healthcare providers need to focus on the following:
1. Accurate Patient Information
Ensuring the accuracy of patient demographic details, insurance information, and eligibility verification is the cornerstone of successful RCM. Any errors in patient data can lead to claim denials and delayed payments.
2. Efficient Claims Management
A well-structured claims management process is vital. Submitting sanitised claims from the start reduces the need for rework and prevents unnecessary delays. Automation tools, especially with the recent advancements in Artificial Intelligence, can be used to improve accuracy and speed up the submission process.
3. Compliance with Healthcare Regulations
Proactively meeting regulatory and legislative requirements in billing and coding, such as accurate ICD & DRG classifications, operating times data capture and other compliance requirements, goes a long way to ensure timely and complete payments of claims. Staying up to date with the changes in these requirements and ensuring the processes and procedures are aligned with the changes ensure continued success with the claims submission and payment collections.
4. Patient Engagement and Communication
Clear communication with patients regarding their financial responsibilities like co-payment and excess payment requirements is important. By setting expectations early and having correct documentation in place, practices can avoid delayed or non-payments.
5. Analytics and Reporting
Regular monitoring of key performance indicators (KPIs) like claim rejection rates, outstanding days in accounts receivable, and average time to received payments by payers helps to identify inefficiencies. Data-driven decisions can significantly enhance RCM outcomes.
Important Steps in the RCM Process
Getting your billing right can prove challenging, even for the most seasoned of staff members as the fast changing healthcare landscape, the numerous health-funds that you have to deal with, and changes to government legislation at federal and state level means that you need to stay constantly updated to avoid creating a backlog of rejections and underpayments from building up - and in amongst trying to take care of your patients, its easy to see why it can be quite overwhelming for your staff to handle.
By working with a professional partner who can help streamline your processes, and help you adopt the key steps in RCM, will lead to a more optimised financial performance. Here are the key steps:
1. Patient Registration and Pre-Authorisation
Collecting accurate patient information and verifying insurance coverage is the first step. This includes ensuring that the patient is eligible for the proposed treatments, which helps in avoiding claim denials later.
During this phase of the process, having properly signed documents containing correct patient data and accurate proposed treatment and procedure details is a necessity rather than an afterthought. Some of the important documents to note are informed financial consent, other claim related documents such as Hospital certificate - HC21, etc.
2. Charge Capture and Medical Coding
Every patient encounter must be documented, and attention must be paid to ensure all chargeable products and services provided are included in the claims. This information must also be translated into codes (such as ICD, DRG codes) that insurers use to validate and refine reimbursements. Accurate billing and coding is critical to avoid under-billing or over-billing.
3. Claim Submission
Once the services are coded, claims are submitted to insurance providers. Ensuring timely and correct claim submission is essential to keep the revenue cycle moving without hiccups.
4. Payment Posting and Reconciliation
Once claims are processed and payments are received, they are delivered to the corresponding accounts. Practices need to reconcile payments and ensure that any discrepancies are resolved quickly.
5. Denial Management and Appeals
It’s important to have a process in place to manage denied claims, appeal them when necessary, and ensure timely follow-up.
6. Patient Collections
Establishing a clear and efficient payment collection process is vital to ensure the practice receives full payment for services rendered.
Why Should Australian Healthcare Specialists Adopt RCM?
While RCM is a well-established practice in the USA, Australian healthcare specialists can start reaping the benefits by implementing these strategies in their practices.
Our team can apply an effective RCM to your practice and at the same time help your team also work towards understanding its benefits and adopting it themselves.
Here's how you can stand to benefit:
1. Improved Cash Flow
Adopting RCM can help your practice enhance your cash flow by reducing the time it takes to get paid for services. A streamlined billing and claims process ensures that payments are received quickly and without unnecessary delays.
2. Enhanced Patient Satisfaction
Clear communication with patients about their financial responsibilities reduces confusion and improves the overall patient experience. When patients are well-informed, they are more likely to meet their payment obligations promptly.
3. Reduced Administrative Burden
Automating parts of the RCM process, such as claim submission and payment posting, reduces the time and resources needed for administrative tasks. This allows healthcare providers to focus more on patient care rather than chasing down payments.
4. Increased Compliance and Accuracy
With stringent regulations in healthcare, ensuring compliance with coding and billing standards is crucial. RCM tools can help reduce errors in medical coding and billing, leading to fewer denials and a higher rate of reimbursement.
5. Data-Driven Decision-Making
By tracking and analysing key financial metrics, Australian practices such as yours, can make informed decisions that improve operational efficiency and revenue. This proactive approach helps in identifying bottlenecks and optimising the entire revenue cycle.
Final Thoughts
For Australian healthcare specialists, adopting Revenue Cycle Management practices that have been successfully used in the USA can be a game-changer. Not only does it ensure a more efficient and error-free billing process, but it also frees up valuable time and resources, allowing practitioners to focus on providing quality care. The result? A win-win scenario where financial health and patient satisfaction thrive side by side.
By investing in RCM tools and strategies, healthcare providers in Australia can position themselves for long-term success in an increasingly complex medical landscape.
If you want a more optimised revenue stream that applies the concepts of RCM, reach out to us, we can help reduce administrative wastage, significantly reduce the time it takes to receive payments, and ensure a steady cash flow that will allow your practice to grow - the end result is a more stress free time for you and your team.
