Introduction
Hospitals suffer enormous losses of over $68 billion annually due to billing errors, primarily, because of the mismanagement of revenue cycle processes. Patient accounts that are mishandled, inaccurate coding, under-billing, and overbilling all contribute to the problem, which harms healthcare facilities’ financial viability and ability to deliver quality patient care.
When providers fail to follow up on payments, neglect to collect co-pays or deductibles, or delay account reconciliations, they risk experiencing delayed payments and even reimbursement denials from payers. This can lead to decreased revenue, lower cash flow, increased overhead costs, poor patient experiences, and ultimately damage their reputation as a reliable provider.
Outsourcing healthcare revenue cycle management can help alleviate the administrative and operational burdens on existing staff, freeing them up to focus on more specialized tasks. The global healthcare outsourcing market is poised to grow at a 9.6% rate by 2026, reaching a total value of $468.5 billion, up from $296.4 billion in 2021. Providers are increasingly recognizing the value of outsourcing services, which explains this growth trend in demand for outsourcing.
What is Healthcare Revenue Cycle Management:
Managing the revenue cycle (RCM) in healthcare involves both administrative and clinical processes that ensure medical providers are properly compensated for the services they offer to patients. This includes patient registration, pre-authorization, medical coding, claim filing, reporting, and final payment processing. The revenue cycle management healthcare process is considered complete once the patient’s account has been settled and the healthcare provider has received full payment for all the services they provided. From handling claims and creating medical bills to collecting payments and ultimately earning an income, healthcare revenue cycle management encompasses all these tasks.
The Healthcare RCM Process
The revenue cycle management healthcare process consists of various steps. They are as follows:
Insurance Eligibility Verification
Before scheduling an appointment, the healthcare provider must first determine whether the patient has proper, legally valid insurance.
Collect Overdue Balances and Co-Pays
If the patient’s insurance did not cover the cost, the healthcare provider must charge a predetermined fee at the time of the first appointment or any remaining debt from a previous visit.
Medical Coding
To properly categorize and input a healthcare diagnosis, procedure, and treatment, conventional CPT and ICD-10 coding requirements must be followed.
Claim Submission and Creation
Claims must be manually or digitally prepared, verified, and delivered to the insurance company, clearinghouse, or various other suppliers.
Denials Management
Claims must now be checked for mistakes and resubmitted. More information may also be required to verify that the claim is complete. Furthermore, certain insurance companies may require that particular appeals methods or deadlines be followed in order for a claim to be effectively considered.
Claims Follow-Up
To ensure the claim is processed correctly and paid out on schedule, it is important for the healthcare practitioner to follow up with the payer by phone, online, or email. This will help to shorten A/R days and alleviate any financial obligations for the patient.
Final Bill
It is crucial for healthcare providers to follow up with payers via phone, email, or online communication to ensure that claims are processed accurately and paid out promptly. This can help to reduce the number of days in accounts receivable and prevent patients from facing financial obligations. In addition, patients should receive a final bill, either in paper or electronic form, that clearly outlines the total expenses and fees, including a detailed breakdown of costs and the date of the procedure.
Collection of Payment
Patients must be asked to pay at this stage. They have two options for making this process easier so they don’t have to pay their bills in person: digital banking and mobile banking.
Reporting and Data Analysis
At this juncture, all revenue and patient information must be analyzed and collected into useful insights in order to improve business operations—from reducing A/R days to increasing collections—and strengthen the healthcare provider’s financial performance.
Why Is Revenue Cycle Management Outsourcing Crucial for Healthcare Providers?
Without healthcare revenue cycle management (RCM), it would be difficult for healthcare providers to receive payment for their services. This is especially true since health insurance plays a crucial role in the US, where consumers are not solely responsible for paying medical bills. Moreover, if RCM were not outsourced, physicians would have to bear significant administrative and financial responsibilities while also ensuring that their patients receive top-notch medical care.
What are some of the most common revenue cycle management challenges that healthcare professionals face on a daily basis?
Billing Inefficiencies and Collections
Although there are so many moving pieces in medical billing and collections, they can be difficult to handle. As a result, even minor errors in billing and collection systems can result in costly claim denials, revision, or revenue loss. Furthermore, significant income loss may occur if healthcare costs and claims are not accurate or thorough, denials are handled incorrectly, or receivables accounts are not immediately followed up on.
Patient Registration Data Inaccuracy
For an RCM and the billing system to be operational successfully, proper patient data for registration must be collected. Claims would be rejected if sufficient data was not provided, resulting in a loss of payment. Delegating registering patients to a human may not be a smart idea given our susceptibility to human faults such as lack of concentration, blatant confusion, and laziness; therefore, automating patient registration would handle this issue.
Furthermore, by outsourcing the collection of critical and irreplaceable patient data to software to a reputed healthcare debt collection agency, your clinic will make more revenue because errors will be minimized, if not fully eliminated, throughout the data-collection process.
Verification of Insurance Eligibility
It’s common for healthcare providers to encounter delinquent patient accounts and fewer A/R reconciliations due to inadequate verification of patients’ insurance coverage prior to their scheduled appointments. Confirming insurance coverage beforehand is essential to avoid individuals without insurance taking advantage of the healthcare system, which can result in a constant stream of denied claims for your clinic. It’s also crucial to implement more efficient methods for evaluating insurance coverage since insurance verification can be both time-consuming and labor-intensive.
Erroneous Charge Capture
Managing charge capture and collecting data successfully is a difficulty that many healthcare practitioners face. Good healthcare revenue cycle management is dependent on acquiring proper and present rates for medical services in order for the medical invoices that are issued to pay the treatments that are needed and their associated costs.
RCM specialists must also follow the exact billing standards set by Medicare and other payers, which unskilled employees cannot do. One of the most difficult difficulties for hospitals is giving appropriate training in the statistics and paperwork required, as well as how to do charge capture successfully.
Improved Communication Among Physicians and Financial Staff
It is natural for doctors to lose track of the financial condition of the medical practice when they are focused on giving the best care attainable while simultaneously attempting to alleviate their patients’ misery. Unfortunately, the doctors are uninformed of what is going on behind the scenes; thus, it is up to the organizational and financial personnel to investigate solutions to reduce A/R days and improve collections. Nonetheless, getting everyone on the exact same page may be tough.
Advantages of Outsourcing Revenue Cycle Management Services:
Hospitals and medical practices are contemplating outsourcing their RCM services to revenue cycle management companies to address a myriad of problems. It is a wise decision to outsource revenue cycle management, as it has proven effective in generating more income by reducing errors in collecting accurate patient registration information and generating the correct CPT and ICD-10 codes to avoid claim rejections. Outsourcing these services can provide numerous advantages, including:
More On-Time Reimbursements
You can be confident that you will receive reimbursement for all medical services provided in a much shorter period of time because outsourcing your revenue cycle management means that experienced medical billing agents will be handling your reimbursements around the clock.
Furthermore, because the RCM process involves no medical tasks, your outsourcing partner may independently collect and validate all patient data, evaluate insurance coverage, and process payments to ensure that you are paid on time and in full.
Make Patient Care a Priority
Because your healthcare revenue cycle management provider is in the business of getting you paid, you can spend all of your time providing the best medical care possible to your patients.
By delegating your RCM to competent agents who will track claims and ensure you adhere to compliance regulations, you may encounter fewer interruptions and more time to focus on what truly matters. As a result, your healthcare evaluation and therapy will be of higher quality, and your patients will be left with the impression that they are the top priority of your practice.
Less administrative staff are required.
By outsourcing typical RCM tasks such as registration, billing, collections, rejection management, coding, and insurance eligibility verification to revenue cycle management companies, you can streamline your workforce and focus solely on recruiting medical and clinical professionals. This way, you can reduce the number of administrative staff that you need to oversee and instead concentrate on running your medical business without worrying about financial strains and employee performance, which your RCM partner can easily handle for you.
Reduced Billing Errors
Rest assured that your RCM partner is equipped with highly qualified employees and cutting-edge technologies to ensure that there are no billing errors that could lead to revenue leakages. This includes entering accurate patient names and CPT codes. As a result, your medical practice’s reputation in the healthcare sector is strengthened over time, which can attract more patients.
Improved Cash Flow
Your healthcare RCM partner takes care of administrative tasks, leaving doctors free to focus on patient care. With insurance verification and AR collections handled, your organization’s cash flow is improved, while your reputation in the healthcare sector is strengthened thanks to their highly qualified employees and cutting-edge technologies that eliminate billing errors and revenue leakages.
More Expected Revenue Stream
Having a reliable healthcare revenue cycle management company as an extension to your team means that doctors can direct their attention toward providing quality patient care instead of managing administrative tasks. This results in improved cash flow for your organization, as insurance verification and AR collections are handled by the highly qualified employees and cutting-edge technologies of your RCM partner. With fewer disruptions to your revenue stream, you can rest easy knowing that every patient is properly taken care of and their spending is translated into payments for your business without you needing to get involved in any way.
Improved Compliance
An outsourced RCM partner can help you meet regulatory standards more effectively because of their knowledge. You will no longer have to be concerned about changes to regulations or compliance issues because the specialists will create and oversee the administrative procedures associated with compliance procedures on your behalf. You can concentrate on providing the best feasible patient care while ensuring that payer rules, industry legislation, and compliance are being reviewed and addressed without problems or delays.
Streamlined Operations
Many people believe that outsourcing your RCM needs will lead to a loss of control over your medical practice and that increasing resources will negatively impact your income. However, this is a common misperception as the opposite is true. By partnering with an RCM service provider, they will work alongside your company to increase transparency in your operations and assist in better resource management. This will help streamline your operations and eliminate unnecessary tasks, leading to greater efficiency in your remaining processes.
Increase In Accounts Receivables (A/R) Reconciliations
To keep your company financially stable, it’s essential to stay on top of your accounts receivable. An efficient healthcare revenue cycle management partner can help ensure that you receive payment for the medical care and treatment you provide to your patients by monitoring A/R reconciliations from insurance providers.
Stronger Financial Performance
When managing healthcare revenue cycle management (RCM), it can be challenging to avoid costly inefficiencies that can negatively impact a healthcare provider’s performance over time. One solution to this issue is outsourcing your RCM services. By doing so, your practice can benefit from reduced overhead costs by skipping the wages that you would have had to pay for an internal team of specialists.
Outsourcing your RCM services provides a team of knowledgeable professionals to take care of your financial procedures and duties without the need for additional investment in infrastructure, resources, and technology. An outsourced RCM partner can bring in the efficiencies your company needs to be competitive, such as boosting collections, attaining greater compliance with industry laws, and optimizing cash flow by plugging various sources of revenue leakage.
Furthermore, outsourcing your RCM services can result in improved financial results and fewer billing mistakes, as qualified specialists manage your claims and denials. Trusting an outsourced RCM partner to manage your financial obligations and processes can provide your practice with the assistance it needs to perform more profitably.
How are we an industry Expert?
A healthcare revenue cycle is ordained with complex, mundane, and challenging processes and procedures that need proper financial management by experts throughout your patients’ healthcare journey – involving patient, payer, and sometimes third-party contributors. Vital Solutions can help you cut down revenue losses with our patient-focused healthcare revenue cycle management solutions, complete with state-of-the-art patient engagement.
Throughout the years, while working on RCM solutions for clients, we have seen the healthcare sector undergo a number of significant transformations. Due to our extensive knowledge, we are able to assist our clients in addressing costly process inefficiencies, achieving improved compliance, and plugging sources of revenue leakage.
Maximize revenue, improve productivity, and enhance patient engagement by partnering with Vital Solutions.