Many businesses rely on the revenue cycle as their primary source of revenue for the goods or services they provide to their customers. In most cases, health insurance companies are directly involved in the healthcare industry to cover their insured individuals’ financial expenditure on medical treatment. As a result, the revenue cycle is a process with several functions under each stage. The process usually starts when the patient is admitted to a medical facility, which treats the patient (customer) and notifies the insurance company to cover the patient’s medical bills. ( LBMC Family of Companies, 2021). The following are the revenue cycle steps and functions:
Typically, this is the first step in the revenue cycle process. It involves the following activities: Scheduling an appointment with the patient, the verification of the patient’s insurance eligibility, and creating the patient’s account that details their medical histories and insurance cover. The provider obtains the patient’s demographic information, insurance information, and eligibility from a clearinghouse in real-time, often while the patient is still on the phone. (RevCycleIntelligence, 2022).
The information collected is then sent to the patient’s insurance company and flows through the provider’s practice management system, which then informs the provider of the patient’s coverage, deductible, co-insurance, copayment, and, in some cases, whether a referral is required. At this point, the provider can determine the patient’s financial expectations, such as the time of payment or policy cancellation. This stage allows the provider to set the financial tone for future payment questions. (RevCycleIntelligence, 2022).
At this point, the patient’s information is double-checked to ensure that it is correct. For example, the provider double-checks the accuracy of the patient’s personal information, such as phone number, date of birth, guarantors, and insurance information. Several tasks are completed at this stage, including collecting copayments and ensuring that authorization or referral is in place before treating the patient. At this stage, financial forms are signed by the provider.
( LBMC Family of Companies, 2021).
- Charge capture
This is the third step of the revenue cycle, which occurs after the patient’s information has been documented. Healthcare providers enter the patient’s information into their billing system at this point. The data can be manually entered at the front desk or automatically supplied through mobile phones, spreadsheets, or post-it notes to the practice billing system. Charges are given specific codes to prevent money from being lost due to missing charges, such as supplementary services. The insurance company is subsequently notified of the precise charge codes. ( LBMC Family of Companies, 2021).
- Claim submission
After the charges have been captured, the following phase entails transmitting the information to the insurance carrier. The revenue cycle team double-checks the costs, the CPT code, and the diagnostic code before filing the claim to confirm that the procedures done are supported. At this point, claim scrubbing is performed to ensure that the claims submitted are clean and that they are being processed correctly. The claims are subsequently forwarded to the clearinghouse, which serves as a mailroom, where they are distributed to the various payers. Two reports are likely to be obtained when the claim is submitted. The transmission reports show which claims were successfully sent, which claims were returned, which claims were dropped, and the rejection reports, which revealed which codes were erroneous. ( LBMC Family of Companies, 2021).
- Remittance processing
The provider receives the remittance from the insurance company at this point. The providers are given a benefits explanation to show them how much they were paid for the services they performed. The most crucial aspect here is determining what is allowable. A contract is negotiated between the provider and the insurance company to define the exact time and amount the insurance company will pay for each healthcare provider’s service( LBMC Family of Companies, 2021).
- Insurance follow-up
Following remittance processing, healthcare providers cross-check to see which services have been paid and which have not. 7 to 10 days after the insurance claim has been submitted to the insurance company, follow-ups usually are done. The accounts receivable team is in charge of looking into denied claims and reopening them so that the medical facility can get the maximum payment from the insurance company for the services provided to the covered patient. The A/R analysts examine the claims that have been rejected and, if coding problems are discovered, rectify them before resubmitting the claims to the insurance carrier. Insurance follow-ups guarantee that claims are never lost, the claims that have been held pending for information are retrieved, and that delayed payments are recovered. ( Flatworld Solutions, 2022).
- Patient collections
The patient owes the medical facility if the insurance company does not reimburse the patient’s expenditures according to the terms stated, sometimes due to a denied claim. When a bill is past due, the provider can either contact a debt collection agency or use its front desk workers to collect the funds from the patient. The process may entail gathering all required information, such as patient demographics, clinical services provided, insurance information, and medical bills, and then sending them directly to the patient for reimbursement or, in the worst-case scenario, enlisting the services of a collection agency. The provider should create a fair payment plan for the patient to finish paying the bill and make post-visit collection calls to ensure that the patient pays the expenses. ( LBMC Family of Companies, 2021).
RevCycleIntelligence. (2022, February 14). What is healthcare revenue cycle management? RevCycleIntelligence. Retrieved February 27, 2022, from https://revcycleintelligence.com/features/what-is-healthcare-revenue-cycle-management
The seven-step revenue cycle of a healthcare practice. LBMC Family of Companies. (2021, August 13). Retrieved February 27, 2022, from https://www.lbmc.com/blog/revenue-cycle-healthcare-practice/
Why is a/R follow-up crucial in medical billing – FWS. Flatworld Solutions. (n.d.). Retrieved February 27, 2022, from https://www.flatworldsolutions.com/healthcare/articles/ar-follow-up-importance-medical-billing-process.php#:~:text=The%20accounts%20receivable%20follow%2Dup,a%20thing%20of%20the%20past.