The Importance of Healthcare Revenue Cycle Management

Healthcare Revenue Cycle Management (HCRM) encompasses all aspects of the
payment process. It can involve Preregistration, Charge capture, Accounts
receivable, and Third-party follow-up. Depending on the situation, revenue cycle
issues can occur at any point during the care continuum. The greatest challenge is
human error, which results in lost revenue. Healthcare Revenue Cycle Management
is a critical component of any organization’s overall financial health.

Preregistration

The importance of pre-registration in healthcare revenue cycle management can’t
be stressed enough. Pre-registration processes allow patients to provide information
in advance, reducing the risk of bad debt and write-offs. Additionally, it helps reduce
the possibility of last-minute schedule changes, which result in lost revenue. On
March 25, Interlace Health, Becker’s Hospital Review, and Health IT Solutions hosted
a webinar to discuss pre-registration technologies. During the webinar, Theresa
Moss, Director of Healthcare Revenue Cycle Management at Interlace Health, and
Ann Hill, Preregistration Technology Manager at HIT Solutions, talked about the
benefits of pre-registration technologies.
A well-designed pre-registration process helps ensure that billing and insurance
information is accurate and complete. A single mistake or inaccuracy during this
process could snowball into a larger problem that can affect hospital reimbursement.
Incorrect pre-registration data can delay the payment process for patients and
hospitals. Pre-registration improves patient satisfaction and ensures a smooth,
organized, and streamlined front-end process. It also ensures that patients flow
through the hospital’s front-door and through the right departments for care. By
providing this service, patients are more likely to be satisfied with the experience
and make an upfront payment.
The benefits of pre-registration for healthcare revenue cycle management are
immense. This first step can save patients valuable time in the waiting room and
help prevent unforeseen charges. By establishing insurance eligibility before a
patient visits, a healthcare organization can avoid the costly mistakes that can cost
them millions of dollars. A well-run revenue cycle will also make patients aware of
their out-of-pocket payments in advance. These factors will reduce costs and
increase patient satisfaction.

Charge capture

It is estimated that about 1 percent of all net charges are lost to a health system’s
failure to capture charges. Charge capture is the process of getting paid for services
rendered by a health system based on a master list of billable services and their
associated costs. The process is also known as chargemaster or charge description
manager. Hospitals should be able to capture charges within 24 hours of the
interaction with the patient.
There are several key components to the process. These components include:
education, process documentation, and central charging policies. Effective charge
capture processes eliminate the room for error and improve consistency among
team members. Implementing a central charging policy will help eliminate potential
gaps and allow organizations to target their loss leaders and improve performance.
To increase charge capture in healthcare, consider adopting best practices for CDM
mapping and pharmacy. Charge capture best practices can be implemented across
all departments to improve overall revenue.
Charge capture is a critical aspect of healthcare revenue cycle management. It is
the process of translating physician time and services into billable charges. It is one
of the main tasks in revenue integrity, which involves reducing the risk of noncompliance and optimizing payment. The goal of charge capture is to increase the
volume of recovered revenue by ensuring that all medical services are properly
documented. It also allows physicians to ensure the quality of care provided to
patients.

Accounts receivable

The role of accounts receivable in healthcare revenue cycle management is critical.
It forms the backbone of an organization that processes payments and invoices for
healthcare services. Efficient collection processes enable healthcare organizations to
deliver high-quality services at optimal costs. But how do accounts receivable
processes help improve healthcare organizations’ collection performance? Here are
some tips. 1. Establish a collection culture. Your staff should encourage prompt
payment by sending frequent reminders and following up with patients.
Outsourcing accounts receivable management services is an excellent way to reduce
administrative costs while maintaining accuracy. Outsourcing these functions can
free up your time for more important medical services. Besides, it provides you with
expert professional services at affordable costs. Effective denial management is an
integral part of AR. Outsourcing accounts receivable management services, such as
BIS, allows healthcare providers to maintain a consistent focus on medical services.
Companies offering revenue cycle services include ACI Worldwide. ACI specializes in
healthcare accounts and helps healthcare organizations achieve financial targets
through improved productivity and cost-cutting initiatives. In addition, ACI
Healthcare’s innovative technology helps the company monitor compliance
requirements in the healthcare industry, including Medicare uncollectible accounts.
These services are also available online through the company’s website. However,
healthcare revenue cycle management services are not for every practice. In some
cases, a combination of solutions can be the best option for a healthcare provider.

Third-party follow-up

Revenue cycle management includes patient collections and accounts receivable
follow-up. These services are crucial to healthcare revenue growth because patient
financial responsibility is becoming a major issue. Rev Cycle Intelligence reported that
hospitals increased revenue by 88 percent from 2012 to 2017. Likewise, billing
practices must be careful about pricing, as higher bills can delay payments and
create more bad debt. With an accurate account receivable report, practices can
pinpoint problems and improve their collections and avoid slow-paying accounts.
Managing healthcare revenue begins with the first patient encounter. In an ideal
scenario, the patient schedules his or her appointment ahead of time, though there
are exceptions to this. The provider captures patient insurance information during
the encounter, so that the insurance coverage and benefits are properly checked. If
the patient is unable to pay for the medical services, a financial planning
engagement may be arranged in advance. If the patient cannot pay in full,
appropriate patient contributions may be collected at the time of service.
Another benefit of A/R follow-up is its ability to improve communication between
patients, payers, and providers. These services can help healthcare practices
improve their overall financial performance and reduce lag time between service and
payment. As healthcare providers need to keep their cash flow positive, the A/R
department plays a critical role in making sure they have steady revenue flow. If
they do not have the money to pay for the services rendered, they are at risk of
going under.

Utilization review

A key part of healthcare revenue cycle management is the implementation of a
comprehensive utilization review. Using evidence-based criteria, utilization review
nurses must document medical necessity and appropriate care level for patients.
Documentation must include the patient’s current condition, the reason the patient
cannot be treated safely as an outpatient, and any risk associated with not providing
the appropriate level of care. This process may include retrospective, concurrent, or
prospective reviews.
Many hospitals are finding it difficult to implement a robust utilization review
program. The stress of the recent pandemic has affected staff morale and reduced
the number of clinical utilization reviews. In addition, the denials team was largely
neglected due to the burden placed on treating physicians. But a utilization review
process evaluation can help uncover opportunities to enhance organizational
oversight, systematize processes, provide training, and create a feedback loop.
Ideally, the utilization review process should be conducted seven days a week and
365 days a year. For the best results, the review should be conducted on at least a
sample of patient cases each day. Further, the review should be performed by
physician advisors and based on national standards of care. Moreover, the review
should be conducted concurrently with the admissions department and discharge
planning. The physician advisors should discuss the case with the admitting
physician and make recommendations based on these standards.

Impact of COVID-19 on revenue cycle management

One of the most important aspects of healthcare revenue cycle management is the
ability to forecast revenue. The impact of COVID-19 has been significant for
healthcare providers, with their rates of billing to payers steadily declining, and their
patient volumes dropping unexpectedly. A recent report from Kaufman Hall showed
that hospital operating margins are down 28% year-to-date, including the impact of
CARES Act funding.
As a result, the COVID pandemic has drastically changed healthcare revenue cycle
management. In just a few short months, hospitals collectively lost $50 billion in
revenue, and an estimated $202.6 billion. This has exacerbated the problems many
providers are already facing. Many healthcare providers have seen their visits and
revenue cycles fall nearly 50%, and their revolving door of elective procedures has
essentially been closed.
Whether a physician’s office has a cash reserve or not, the erratic claim volumes
created by COVID-19 are impacting their RMC. According to the Healthcare Financial
Management Association’s survey of 587 chief financial officers, the top problem for
healthcare revenue cycles is uneven work and claim volumes. The impact of COVID19 on the healthcare revenue cycle management process is significant for physician
practices and should be addressed immediately.
In addition to addressing COVID-19’s impact on the revenue cycle, many practices
are now moving toward value-based care contracts. In turn, this means that revenue
cycle management will need to change as well. Further, many practices are shifting
their business model to focus more on patient care and increasing operating
efficiencies. Despite the upcoming challenges, however, improving revenue cycle
management is important and will help ensure continued success.