Managing revenue is an integral part of operating any business as it ensures that the incoming cash flow is enough to pay for all expenditures. Revenue cycle management (RCM) is commonly used for hospital-based services that are often characterized by complexities in billing as well as revenue collection.
With proper RCM, healthcare providers can maximize revenue collection in their operations. Keep on reading to learn why revenue cycle management is important.
Identifying and Resolving Errors
The revenue cycle in healthcare consists of several steps, and therefore the chances of mistakes are high. Errors in the cycle can affect the provider’s ability to receive reimbursement from both patients and insurers. However, when you implement RCM, it becomes easier to identify errors within the revenue cycle. This will prevent the occurrence of denials since most of them are caused by preventable technical issues such as missing details.
Reducing Administrative Burden
RCM plays a crucial role in keeping the administrative burden low by preventing claim denials. With the appropriate RCM for healthcare companies, the administrative staff won’t have to dedicate effort and time to track denied claims. The staff members will therefore get enough time to focus on the provision of excellent patient care. All the processes involved in the revenue cycle are streamlined to provide the best experience to all parties involved.
Preventing Healthcare Fraud
Fraud in the healthcare industry is a cause for concern, and it costs the sector billions of dollars annually. Inaccurate medical coding constitutes healthcare fraud that warrants fraud investigations. Providers can also upcode their procedures to request higher reimbursement than the total amount they deserve. Revenue cycle management emphasizes accurate coding, data collection, and billing to ensure that accurate information is provided to insurance companies.
Avoid Patient Fraud
Patient dishonesty is common, and it usually happens when patients provide inaccurate information. For instance, patients may lie about their policy coverage to get the treatment they do not qualify for. However, insurance verification is one of the basic tenets of revenue recycling management to detect any inaccurate insurance information provided by patients. RCM also helps prevent medical identity theft by some unscrupulous patients. This practice costs the victims as well as the healthcare providers. This is where RCM comes in handy since it is used to verify patient information.
Increase Revenue
Most importantly, RCM helps increase the healthcare facility’s revenue. By preventing claim denials, technical errors, and fraud, healthcare providers are in a position to receive prompt and accurate payment for their services. They can also avoid spending large sums of money in trying to resolve these common errors. Healthcare providers typically provide the best patient care when they are generating sufficient revenue to reinvest into the business.
Revenue cycle management is critical since its main goal is to increase provider revenue while reducing time spent on aspects like clinical and administrative functions. This means the patients will get the best service, and more resources will be devoted to them. With RCM, healthcare facilities have all the necessary tools to streamline the revenue cycle to provide excellent patient care.