We all know money is important in the healthcare sphere – you want your healthcare organization to be financially healthy so you can invest properly in your staff, your programs, and your community. But financial health is bigger than just your billing – financial health encompasses your entire revenue cycle and your management of that cycle. But how exactly is revenue cycle management different from medical billing? And when is revenue cycle management right for you and your team? Let’s talk about it!
What is medical billing?
This question is relatively simple to answer. Medical billing is the process of submitting claims for services you have provided to patients, and then following up on those claims. It includes the process of reviewing claims, gathering data, and resubmitting rejected claims.
This process can be incredibly slow, and many practices will have entire billing departments or will outsource for their medical billing needs.
But even though billing can be complex and time consuming, it doesn’t truly provide the full picture of your revenue and overall financial stability. That is where revenue cycle management comes in.
What is the difference between medical billing and revenue cycle management?
Who remembers the term “A square is a rectangle, but a rectangle is not a square”?
Revenue cycle management (RCM) and medical billing are a little like the rectangle and the square. Medical billing is a part of revenue cycle management, but RCM goes above and beyond. RCM encompasses all the financial processes surrounding medical encounters, and includes processes like scheduling, credentialing, contracting, collections, patient portals and more. The goal of effective RCM is to examine all clinical and administrative tasks that work together to help your healthcare center successfully book appointments, bill patients, and collect payments.
RCM focuses on four big-picture areas:
- All the ways your practice generates revenue
- All the ways you capture revenue through patient payments
- All the ways you capture revenue through insurance collections
- Learning how to improve your cycles and change processes to fill any gaps through regular reporting
The main way healthcare centers generate revenue is by providing services. In order to be able to provide services to individuals and families in your community, it is vital that your physicians and other providers are credentialed and contracted correctly (and stay that way!) with the insurance companies you will be billing.
RCM should also take into consideration the patient experience when trying to make and keep an appointment at your practice. Can they schedule an appointment online, or do they have to call into your center? Are your appointment times flexible, taking into consideration single parent families and older patients? Do you provide appointment reminders via email, call or text? The easier it is for your patients to get in to see your providers, the easier it will be for you to help them stay healthy.
Collecting patient payments is another area traditional billing may gloss over, but it’s an important part of revenue cycle management. This can be one of the most difficult parts of capturing revenue, because once a patient leaves your office, collecting payment from them becomes exponentially more difficult.
Training your staff on how to collect in-person is a part of RCM, as is implementing standard policies and procedures on when and how client statements are delivered. Effective RCM would also consider implementing a user-friendly patient portal that allows individuals to pay their balance online.
As you can see, RCM isn’t just about collecting the payments, it’s about examining the policies and procedures that will help your staff collect all the revenue your healthcare organization is earning.
Download our “Making Patient Payments Easier” guide here for some ideas on how to tackle the intimidating world of patient collections.
This is the part of RCM that everyone is likely the most familiar with – the medical billing! This encompasses ensuring all the services provided are coded correctly, all claims are submitted in a timely manner, and that any denials are corrected and resubmitted to ensure maximum revenue collection.
Another key difference between billing services and revenue cycle management is the post-reporting and regular procedural adjusting. Regular reporting is a vital part of RCM as it allows you to take a closer look at what procedures are working and identify where the weakest links in your cycle are. Custom reports built just for your organization allow you to improve the existing systems and processes, which will remove stress from your staff, simplify office procedures, save valuable time, improve patient experience, and ultimately, maximize the revenue you are bringing in the door.
When is revenue cycle management right for your healthcare center?
Revenue cycle management reflects the ever-changing healthcare system here in the United States. Billing is no longer just a back-office effort – it now involves administrative staff, clinicians and other providers, as well as patient procedures and office processes. But it may not be the right fit for every practice.
Smaller private practice clinicians may not need the robust, big-picture view that RCM provides. However, if you are a healthcare organization that is ready to grow, RCM could create a huge impact. Bringing in an RCM partner can help you critically examine your procedures and begin to collect the revenue that will help you grow your programs and reinvest in the community you serve.
Staffing changes could be another reason that RCM is right for you. If you previously conducted your billing in-house but have recently experienced staffing changes and are struggling to grow your billing team to keep up with the demands of your organization, outsourcing your RCM can help relieve overburdened staff and open their time to other critical tasks.
RCM isn’t for everyone – but it could be right for you!
There are lots of software options that provide the framework for RCM and allow for your organization to tackle its own robust RCM! But sometimes, using these programs to their fullest, especially when dealing with complex codes and billing procedures, may require more manpower or expertise than your staff has available. If you are faced with some of the challenges mentioned above, or feel that your revenue cycle management could improve, finding an RCM partner that can use the system you are already working in is an important step.
Check out Practice Management today to see if our suite of RCM services can help you maximize your revenue, improve your processes and procedures, and get your revenue where it belongs – re-invested into your team, your technology, and the communities your serve!
Already have an RCM process in place, but wondering if it could be improved? Check out our consulting here!