The Healthcare Industry Revenue Cycle

Revenue Cycle in the Healthcare Industry

The healthcare industry revenue cycle is the most complicated compared to the other industries. The process essentially begins with the patient getting registered into the healthcare facility, providing treatment to the patient, and ends with the hospital or the healthcare provider receiving full payment for the services rendered. In most scenarios, the health insurance companies are involved, mainly when a significant expenditure is involved in medical treatment. The healthcare systems use the revenue cycle management to trace revenue from patients from their encounter with the healthcare system or initial appointment to their balance payment (Rauscher & Wheeler, 2008). There are seven basic steps involved in the healthcare industry revenue cycle and are explained as follows.

Pre-registration

This is where the process begins and is the most critical step in the whole revenue cycle process. This step allows for capturing demographic information by the medical practice, ad insurance information coupled with the patient\'s eligibility. This is usually done through a clearinghouse, and on most occasions, when the patient is still on call. The information obtained is taken to the patient\'s insurance carrier. The information also flows through the management system of the provider practice and informs the provider about the patient\'s co-payment, co-insurance, deductible, and coverage, and in some cases, if a referral is needed.

During this process, the practice discusses the patient\'s financial expectations and includes the cancellation policy and time of payment. This process is essential because it enables the provider to set the financial tone or requirements initially. This prevents any questions that may arise regarding payment. Should a practice lack a tight pre-registration process, many areas are bound to get missed. Therefore, it is recommended that the practice always check the pre-registration process to strongly start the revenue cycle process (Mindel & Mathiassen, 2015).

Registration

This process helps to solidify the accuracy of information about patients from the beginning to the end. During this process, the provider must ensure that the patient\'s details, including insurance information, guarantors, the fate of birth, phone number, and address, are accurate. It is also critical that this data must be secured every time a patient receives treatment. Also, the provider has to collect co-payment during this stage. If it is a specialist, they have to ensure that authorization or a referral is in place for the patient (Rauscher & Wheeler, 2008). If this step is not done in a specialist\'s office, they are likely not to get paid for that service in the end. Furthermore, this is the step in which financial firms are signed together with any insurance benefits. The risk associated with skipping this crucial step is financial repercussion, especially if an audit is done on the practice.

Charge Capture/Coding

This process can take various forms. First, the process can be automated, meaning that information or data will automatically flow into the management\'s billing side depending on what is put in the documentation by the provider. The other way of doing it is taking the old-fashioned format, in which the front desk staff sends the information to billing for it to be manually keyed in or entering the data themselves. The two methods have both disadvantages and advantages associated with them mainly because certain charges are at risk of being missed (Manley & Satiani, 2009).

The frequently missed charge comprises ancillary services. This leads to revenue left on the table. The missing charges can be avoided by ensuring that the charges are coded and are sent to the insurance carrier accurately. As part of the auditing procedure for the revenue cycle, an experienced advisor should be allowed to follow the charge from the beginning to the end while uncovering missing charges and identifying miscoded charges. It is, therefore, critical to ensure that charges are captured correctly, and this effort can further be boosted by consulting an expert to review the process. The billing staff is in charge of this process.

Claim Transmissions

This involves sending information to the patient\'s insurance carrier once the charges are entered. This is done by the revenue cycle team, which looks at the charges, the diagnosis code, and the CPT code and questions whether the diagnosis is in the place to support the performed procedure. If two services are offered, they should be separated, and coding is done on individual services. Within this process, there is a concept referred to as claim scrubbing. This is the process of ensuring that the claims are clean and correctly get into the door (Zeng & Zhang, 2013).

This is important; getting clean claims to the insurance carrier facilitates better pay and at a fast rate. The process also involves sending the claims from the provider\'s management system to the clearinghouse. This acts as the hospital\'s mailroom that takes the claims and sends them to various payers. The report made for this process should always include the claims sent, those coming in, and those dropped. The rejection reports have the primary role of identifying incorrect codes. Reviewing both reports ensures that errors are identified sooner, fixed, and the claims are paid as quickly as possible.

Remittance Processing

This happens once the claims are sent out, in which case the provider gets remittances back. This explains to the provider what they have received payment for. Allowable is also determined during this process. These are what the practice has contracted with the patient\'s insurance carrier regarding the services rendered. The insurance carrier and the provider get to negotiate the contract, establishing a common ground for what works for both parties. At this time, the insurance courier confirms the amount they will pay for every service rendered. As part of the process, there are write-offs, both non-contractual and contractual, in which case, the contractual ones are unpreventable, involving contract rates with payers and carriers.

Non-contractual write-offs are the opposite of the contractual ones, given that they are avoidable and include those that would have failed to happen had there been a tight process, either at the beginning, along the way, or at the end. Generally, they are a result of a breakdown in the remittance process of the provider. They can be avoided by simply looking at reports frequently. In such situations, some of the signs of danger or the red flags are not submitting a claim on time, no referral on file, and no authorization (Callahan, 2008). Another element under this process is the fee schedules. Failure to evaluate the fees by the providers can cause some money to be left on the table.