If you were to Google, “What is RCM?” you’re not going to find an easy answer. At its most basic level, Revenue Cycle Management is defined as the financial process that health care practices and providers use to track patient care episodes. However, the search will spit out a myriad of definitions, and a laundry list of vendors, advertisements for new medical billing software, and companies promising to help improve your revenue cycle. Let us break it down for you.
Many healthcare RCM vendors may say the revenue cycle begins when a provider renders a service to a patient. At pMD, we think of it a little bit differently. We believe the revenue cycle begins long before the patient even steps foot in the office or starts a telehealth visit.
A successful revenue cycle starts at the point of patient registration and appointment scheduling. Making sure a patient is set up in your system with complete and correct information, insurance has been verified, and any co-pay is paid prior to their appointment is crucial to ensuring the patient has a successful visit, and the provider is reimbursed in a timely fashion. In fact, one of the most common reasons for claim denials is due to “missing information,” such as the patient’s insurance or demographic information is not accurate, up to date, or incomplete. Real-time eligibility verification checks can help avoid those denials.
Finding a solution that helps you gather and verify correct patient information upfront, prior to an appointment, pays huge dividends in a practice’s eventual collections and overhead costs.
Some may argue that the revenue cycle ends when reimbursement from a patient and/or payer hits your bank account. Others might say that the revenue cycle never really ends, since the lifecycle of a patient relationship can be long and complex, with one episode of care bleeding into the next. Here at pMD, we believe that it’s all about consistently finding ways to simplify and shorten this cycle.
Additionally, insurance carrier relationships can be complex and iterative, meaning there is always room for improvement. One piece is clear though - the ultimate goal of an RCM partnership is to reduce the amount of time it takes for a practice or provider to get reimbursed for services, while also maximizing those reimbursements. As the saying goes, your dollar today is worth more than your dollar tomorrow.
There are various metrics used to measure the efficiency of one’s revenue cycle, and the importance of each is going to depend on the individual practice and their unique priorities. The most commonly used measurement technique is known as days in AR, or accounts receivable.
Days in AR is a measurement of the average time it takes to collect payments owed to the practice. Days in AR gives you a snapshot idea of how quickly you are getting reimbursed for your services, and by extension, how effective your revenue cycle is.
Another common way to measure one’s revenue cycle is through overall collections, which can be drilled down further, to examine collection trends by payer or even by charge code. The appropriate metric used to measure revenue cycle health may depend on an individual organization’s specific needs or goals.
A practice or provider can improve their revenue cycle with a combination of effective processes and technology solutions. A few steps you can take include:
Here at pMD, our mission is to streamline and optimize as many areas of the patient care episode and the revenue cycle as possible. Through our integrated, end-to-end practice management and revenue cycle solutions, we’re able to help practices consolidate vendors, reduce costs, streamline workflows, improve patient care and satisfaction, and collect your maximum reimbursement quicker.
Not sure what a vendor could do to improve your financial metrics? Contact pMD for a no-commitment financial impact analysis by our team of healthcare RCM experts FREE of charge!