Financial Management
Definition of revenue cycle in healthcare
A revenue cycle is a process whereby financial progression of the accounts of a business is described.it begins where the business has made acquisition of products until they get paid. Healthcare firms are business oriented organizations. Their survival financially depends on a recurring and consistent flow of money from the services that are provided to patients. Without the existence of adequate stream of revenue then healthcare organizations would be forced to stop their operations. The revenue cycle begins immediately a patient registers to a healthcare institution for care. A revenue cycle that is well managed protects revenue collected and increases the flow of cash. If it is supported by an information infrastructure that is strong it will lead to the standardization of procedures and help in sharing of information across the units of operation ( Hall, s2010).
Complexity of the revenue cycle in health care
There exists a significant degree of complexity when it comes to revenue generation for healthcare organizations. There is no other industry that experiences the same level of complexity in the billing system compared to healthcare organizations. This complexity is due to the importance and nature f the services that are provided by these organizations. Another factor that complicates documentation and billing in healthcare organizations is regulation. The existence of different modes of payment and rates of multiple payers increases the complexity of the revenue cycle for the healthcare organizations.
Six stages of the revenue cycle
The revenue cycle consists...
The critical stages in revenue cycle for healthcare organizations are the provision and the documentation of services to patients, the charges for these services, preparing a bill or claim, submitting the bill or claim to the person who is supposed to pay and finally collecting payments (Cleverley, James, & Song, 2008).These tasks are performed across many systems, software and paper-based functions.
Registration process
The process of registration begins with collecting information about a patient before any service is delivered to them. The information about the patient collected includes; their address, date of birth, and insurance information. This can be done in a physicians office before medical services are provided.in the case of an elective hospital admission for inpatients this is done a week or more prior the admission. Clinical and financial sets of information are usually collected at this stage. From the financial perspective there are three activities that are particularly important in the processes of billing and collection. The most important activity is the verification of insurance.in case a patient indicates their cover is a third party then it is necessary for the organization to verify the coverage from the payer. There are also patients who might be having secondary coverage from other health plans.it is important to verify such coverage too so as to have billing that is accurate and timely.it is also very vital to find out the health plan identification number of a patient. Today, verification is done online. There are cases where prior approval for services is…
