Well-run revenue cycle management ensures that medical practitioners are timeously paid. When done properly, there is an increased reduction in billing errors; there are several revenue cycle management steps to follow to lead to best practices.
As complex as revenue cycle management may be, one can mitigate payment delays by following the revenue cycle processes. Several steps can be followed and are the same processes used by revenue management companies specializing in this field.
We shall take a look at each revenue cycle step to provide a comprehensive look at the best practices for revenue cycle management, be it for small practices or if one is looking for a suitable management company; knowledge of these processes will ensure one knows what to look for.
Revenue Cycle Management Best Practices
Before we jump into best practices, let us begin with Revenue Cycle Management (RCM) itself. RCM encompasses the financial controls and processes followed by healthcare practitioners and financial support service providers for billing their patients and ensuring revenue.
The RCM process covers every step, from the making of the first appointment through to after the final treatment, and assists practices in tracking payment both from the patient and their medical insurance providers.
To be specific, here's an illustration of the process:
(Source: AIE Medical Management)
These steps form part of revenue cycle management best practices, and it should be noted that these steps are interdependent. Each of the following steps should be closely followed for successful revenue cycle management, as an error in one step may throw off another.
Here are some RCM best practices to reduce billing errors.
1. Lay a Solid Foundation
For revenue cycle management to be successful, a practice must lay a solid foundation from which revenue can be monitored and managed. A good foundation is composed of things as simple as having a good practice management system, trained staff, and good public relations with patients ensuring they remain long-term.
Another factor integral to providing a good base for effective revenue cycle management is having well written financial policy for the practice, which covers all elements of payment and nonpayment and has been vetted by legal practitioners. This should be one of the first documents that patients are acquainted with when registering for the first time.
Lastly and most importantly, proper record-keeping is essential to the smooth running of revenue cycle management. Staff must keep accurate and updated records on each patient and payer, which must be uploaded into the management system timeously and accurately.
2. Schedule and Register the Patient
In the revenue management process, the first step is scheduling a patient; by setting and confirming a scheduled appointment, a patient enters into the revenue management system. During scheduling, relevant information about medical insurance, copayments, and other applicable information for billing should be collected and communicated.
After that, registering the patient on each subsequent visit is required to keep an updated account of patient details, with an annual update of patient details recommended for accuracy. This process is also when medical service providers must complete pre-authorization work and should have a dedicated staff member allocated to this task.
3. Document Medical Records
As with any form of management, accurate record-keeping is crucial, and medical records should be kept up to date. Service providers should have a documentation policy that covers what is included in the records, for example, consultations, tests, and procedures.
Records should be clear, and the name of the patient should be on every page of the form, with dates and initials or signature being present as well.
4. Keep an Encounter Form
Encounter forms are the next step in revenue cycle management, and they serve to capture information about all patient visits, procedures, and services. Different management systems will have variations of the form but will adhere to a numbered format that can be customized based on the practice services.
Most encounter forms will include procedure and service codes, and it is advisable to opt for a system that allows editing.
All information captured in the encounter form must be able to reconcile with the medical record documentation. Proper maintenance of the encounter form will ensure no charges are lost during the process. These are particularly important procedures that take place outside of the practice setting.
5. Input and Verify Medical Codes
Medical procedural codes are an important part of the revenue cycle, and accuracy in their input and verification is needed for revenue cycle management. To best manage, the policy surrounding this process should be drawn up clearly and adhere to official coding compliance guidelines.
Staff who input the medical codes need to be well-trained and kept up to date with developments in medical coding. They should also be provided access to coding resources. This will help to mitigate coding errors and assist with the verification of the medical codes used to ensure that the right code is utilized to capture the appropriate procedure or treatment. Practices that specialize in similar treatments and procedures can network with each other to provide additional support when it comes to code verification and input.
6. Maintain an Accurate Charge Entry
As with every step in the revenue management process, accuracy is essential; as accurate as the medical records and codes may be, without an accurate charge entry, claims may be denied. This step provides an additional check on patient information and, in the case of errors, a way to make corrections, which should be completed as quickly as possible.
7. Settle Claims Transmission Problems
In this case, clearing houses send claims for third-party payment. In rejecting the claim, a report will be generated and should be dealt with as soon as possible, and any feedback will be shared with the data capture staff to avoid similar rejections in the future.
8. Set Up Electronic Payments
Electronic payments are one of the easier ways to deal with payments; by setting up electronic settlements with payers, one can reduce the amount of work staff will need to do, as they need only focus on the instances of nonpayment.
Payments that come in should link to the payments posted; when there are instances of shortfall or nonpayment, these should be flagged and investigated to determine the cause, be it denial or payment error.
9. Manage and Track Claims Denials
This is self-explanatory and is the process whereby the accounts that result in nonpayment or partial payment are managed.
Claims denials can be due to several reasons but mainly from inaccurate data input at some stage in the process. Due to this, it is advised to have a staff member who will investigate each denial to determine where the errors have occurred. Practices can appeal denials and should adhere to the denial appeal instructions to ensure smooth processing.
10. Manage Accounts Receivable
This is the final process, where an automated system is used to send out statements for collection to third-party payers. It is also the module that will send out collection letters in the event of nonpayment. This process will additionally need to have a way to determine a time when payment will devolve from third-party payment to patient payment in cases where insurance denies payment.
It is generally accepted for the request for settlement to be sent to the patient after 30-45 days. Practices should have a policy for account collections, as this will make payment retrieval more straightforward. Collections notices should be automated to reduce the possibility of an account in arrears being forgotten.
In account management, the staff member will be identified where there may be third-party errors. All collections correspondence should be filed and documented.
Without proper revenue cycle management, a practice can suffer financially. Following best practice guidelines ensures that medical practices can keep a thorough record that will assist in facilitating third-party payment and, in the absence of that, patient payments.
(Related article: 5 Accounting Control Best Practices: Don’t Let Money Walk Away)