The Importance of Revenue Cycle Management

The Importance of Revenue Cycle Management

The definition of Revenue Cycle Management or RCM is the procedure of managing your office’s claims processing, compensation, and profit generation. There is a need for medical billing software or practice management software to manage patient claims. The complete healthcare revenue cycle process includes determining the patient’s eligibility, collecting their share of pay, coding the claims in a correct manner, claim tracking, payment collection, and follow-up on the denied claims. This data can be further stored on a cloud solution, which provides AWS Managed Services for data management. Such services can ensure that the data remains protected from cyber threats and organized to manage costs and revenue. AWS can additionally integrate data generated by RCM to optimize the records. However, it’s essential to identify problems within the RCM to improve the performance of the software.

Problems with Health Care Revenue Cycle

1. Unskilled staff: Inaccurate data entry, coding errors which include insurance details, patients details etc) or employees who may have absolutely no understanding how their job is affecting the revenue of the organization can result mistakes by your employees.

2. Communication gap among the staff: It is very important for everyone to understand their role in the office’s revenue cycle. The communication between the physician and the office manager should be transparent and regular meetings should take place to review the revenue, collection and account receivables.

3. Unorganized workflow: Often the staff misses out on checking patient eligibility and copay amounts before the patient gets treated or they take time to follow up on the claims. Without a conventional workflow, such steps can be missed which may result in more trouble and delayed payment.

The real reason why Revenue Cycle Management is important

Insurance companies reject 26% of submitted claims, which can cause 10% loss per physician. With proper revenue cycle management, you can decrease the bad debts write-offs. All you need to do is invest in a medical billing company that is specialized in revenue cycle management. That way it will help you in communication as well as workflow and cash flow.

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