Many things factor into the successful running of any business. And, of course, while doctors do their best to save lives, medical practice is a business, and revenue is involved. Hence, clinics need to keep an eye on the financial aspect of their practice.
Notably, revenue cycle management (RCM) is one of the most important factors that go into the financial running of medical practice. With RCM, healthcare providers ensure that they are duly and accurately paid (reimbursed) for their services.
However, to understand the importance of this management in medical practice, you must first understand what it entails.
What is revenue cycle management?
As it sounds, revenue cycle management is a system encompassing the entire process of billing, payment processing, and revenue collection. In some industries, such as retail, the revenue process is instantaneous as the customer immediately pays for the product.
How it works in healthcare
RCM in healthcare begins when a patient contacts the clinic and ends when all payments are collected. This can be quite complex since insurance is often involved, and healthcare providers will be reimbursed by the patient’s health insurer or the government only after treatment.
So as a healthcare provider, you must have a system in place to keep track of your fees right from when a patient books an appointment up to the final treatment you offer them. This system is known as revenue cycle management.
Physicians may have a team that handles the RCM to ensure the smooth running of revenue collection. To increase efficiency, it’s advisable to have a Healthcare Revenue Cycle Management Software to automate some processes so your team can focus on saving lives. The tool will ensure your revenue cycle proceeds smoothly and that you get reimbursed for every penny you are legally entitled to.
Benefits of revenue cycle management in healthcare
Whether you’re using software or an experienced team, a well-run RCM can offer you the following benefits:
Optimized revenue processing
Improved revenue performance is perhaps the greatest benefit of RCM to healthcare providers. That means you no longer experience the administrative burden of investigating denied claims. A CRM software streamlines payment processing, appointment scheduling, and staff-patient interaction all in one place, reducing the chances of errors.
By having all your financial data in one place, you have greater visibility into your revenue. It also enables your team to identify issues within the revenue cycle to resolve them quickly.
Preventing healthcare fraud
One major benefit of RCM is its prevention of healthcare fraud. It may be because you billed a patient for:
- Some service that wasn’t rendered;
- A medically unnecessary procedure;
- Low-quality procedures or tests.
Healthcare fraud can be intentional or unintentional when you inaccurately upcode data. Upcoding means overestimating your reimbursement. Such issues can lead to an investigation, costing you your revenue and reputation.
With an RCM in place, such errors will be identified and resolved early enough.
So why is this revenue management system important? Simple! It improves a healthcare provider’s revenue and prevents fraud and errors while reducing the administrative effort required. That means you will have more time to focus on caring for your patient, knowing you’ll be reimbursed without hassles.