Is the phrase “Revenue Cycle Management” somewhat foreign to you? Or, if you have experience and knowledge of Medical Billing, are you informed on this aspect of a medical practice’s business?
If you’re not sure, you’re not alone. While every medical practice has its own Medical Billing / RCM process, the components can get confusing. Below are some answers to general questions those interested in RCM might have:
What is Revenue Cycle Management (RCM)?
Revenue cycle management (RCM) is the process that manages claims processing, payment and revenue generation. Technology is often used to track the claims life cycle, and it’s a way the medical practice or RCM company (like drchrono RCM) can keep track of the process including finding any issues. RCM is the entirety of the medical billing process for a practice.
What is the purpose of RCM?
The main purpose of the process includes keeping track of claims, making sure payments are collected, and addressing denied claims. Time management and efficiency play large elements in RCM, and a medical practice’s choice of an EHR / EMR can be a major factor into how RCM is implemented or used.
This includes claims, billings, and receivables from the time the patient leaves your office to when your practice receives payment and the outstanding balance for services equals $0. Every claim has its own life cycle and the practice can either handle their own billing or outsource it to a RCM service like drchrono RCM.
Ultimately, the holistic purpose of RCM is to constantly refine the medical practice’s RCM process to improve and achieve the most successful clean claim rate.
What is the typical claim life cycle?
After seeing a patient, practices must perform front-end management tasks like entering in correct billing codes to start a claim.
A submitted claim is necessary for medical practices to receive payment from insurance companies. Then, from an operational standpoint drchrono would handle the rest of the claim’s life cycle by providing coding services to ensure the right billing codes were entered, working with the clearing house daily to speed up the process of completing a claim, taking information from the payer in case the initial payer/patient information was not sufficient to complete the claim, outstanding all patient accounts so practices know what is owed to them, getting statements to patients so patients know their insurance companies completed payment, and more.
RCM services also work with carriers to continue to appeal claims to get you to adjudication. RCM includes Accounts Receivable management, denial management, overseeing appeals, and taking all necessary steps to get your practice paid.
So why is this important?
With a closely maintained RCM system managed by knowledgeable RCM staff who know payer rules, your practice’s cash flow can be optimized significantly resulting in higher profits.
Many practices do their own medical billing, however the medical billing may be mismanaged. This can occur when practices over-code or under-code resulting in overinflated profits or lower profits. In addition, with ever-changing regulations, coders and those doing medical billing always need to be informed and in the know about medical billing changes.
By outsourcing your medical billing and RCM to a company that does RCM services, RCM gives you sophisticated information on your company’s billing and billing processes with coders and staff who are aptly informed. As a result, signing up for RCM services provides an advanced experience at a sustainable cost.
What did you think of this information? Please feel free to leave any comments below and let us know if this article helped!
Article by Samantha Lin, Digital Marketing Associate, drchrono
Samantha produces content as part of the Marketing team at drchrono. She has strong interests in healthcare and education, particularly in providing women the necessary information to make educated decisions on their personal health. Samantha holds a B.S. in Managerial Economics from the University of California, Davis.