Reimbursement and the revenue cycle
Reimbursement in a healthcare organization defines the payment made to healthcare providers for giving medical services. In the healthcare reimbursement mechanisms vary with basis of the quality of care, quantity and complexity. Reimbursement process includes diagnosis-based payment, salary, free-for-service, pay-for-performance and capitation (Britton, 2015). Different reimbursement mechanisms have strengths and weaknesses therefore no universal system has been developed. If integrated with health information technology this mechanism can be very efficient.
The revenue cycle shows all the steps that a patient follows since when he first makes an appointment to a healthcare service to the point when his/her account has no balance. It involves appointment and insurance verification and events like payment posting, claims submission and denied claims. There are two revenue cycle drivers; internal and external drivers. Internal revenue drivers include patient volume, provider capacity and charges per service. External revenue drivers include collections patient payments and reimbursement. If you focus on external driver’s you can optimize the revenue cycle and efficient cash flow.
Payments
Payments include anything that a patient pays from his pocket and reimbursements services. Reimbursements are the biggest share and how fast you can turn claims to cash determines the existence of your practice. Claims are effectively managed by understanding the payers contract and how complex the rules are.
Collections
Majority of payments are made by insurance companies and are used to pay any balance owed to the patient. The two sources; balance after the insurance companies have paid their portion and balance that is owed by patients after they settle their balance using their own money. To optimize your payments under your contract monitor balances from each insurance company.
Revenue cycle workflow
- Patient scheduling
Population and insurance data are taken from patients then a schedule is prepared for appointments. At this stage revenue cycle starts and all the necessary information.
- Eligibility verification and authorization
This process comes before any service has been rendered to ensure that the money is billed to the rightful payer and that the patients is made aware of out-of-pocket costs. Verification checklist ensures that the information collected accurate.
- Patient visit and care delivery.
The aim of revenue management cycle is to ensure that the patient receive highest quality services and better customer service. Patients must be satisfied by the services provided to them. This will eventually increase the patient base.
- Clinical documentation
The services rendered to a patient must be accurate, timely, comply to standards and complete. Clinical documentation of a patient helps in revenue cycle management.
- Charge capture and charge entry
Capture charge ensures that whatever is documented can be converted into a billable charge.
- Coding
Accurate coding of diagnoses ensures that the reimbursement procedure is maximized.
- Claim submission
When you deliver a correct and timely claim it prevents delay and maximizes revenue. Billing solution require the revenue cycle followed from the first step to the last.
- Payment posting and reconciliation
The final step in this cycle is when payments are finally done based on the clients contract with the payer.
- Denial management
When there is inconsistent flow of income claim denial might be a challenge. If the denial management is effective then revenue incurred might be recovered
Departments in order of importance
Registration
In this department the service provider documents all the necessary data in accordance to insurance company act. The information must represent the client email, date of birth, address, gender, social security no, full names, emergence contact and phone no. Errors made at this stage might cause a lot of issues in future.
Medical coding
This department in the revenue cycle ensures that everything is in compliance with medical coding regulations. Penalties might be avoided by optimal coding.
Billing
In this department UB-04 claim form filled after the patient has received services either inpatient or outpatient. After this the claim is sent to from the service provider to the payer.