BHA FPX 4009 Assessment 3 The Revenue Cycle Process

Student Name

Capella University

BHA-FPX4009 Health Care Reimbursement Systems

Prof. Name:

Date

Introduction

The financial health of a healthcare organization depends on its ability to generate consistent and recurring funds from the services it provides, collectively referred to as the revenue cycle (RCM). This presentation will educate new hires on the various steps of the revenue cycle process and each individual’s responsibility.

Outline

The following topics will be covered:

The revenue cycle process
Their potential responsibilities
Why the process is important to a care organization
Challenges that they might face in their work

Revenue cycle (RCM)

Critical stages in this process include:

Patient registration
Collection of demographics and payor source
Rendering services
Documenting services
Establishing charges
Preparing the claim or bill
Submitting the claim
Receiving payment
Managing accounts receivable

Purpose of Each Step

Pre-claims submission activities
Comprise tasks and functions from the patient registration and case management areas.
Claims processing activities
Capture all billable services, claim generation, and claim corrections.
Accounts Receivable
Manages the amounts owed to a facility by patients who received services but whose payments will be made at a later date by the patients or guarantors or their third-party payers.
Claims reconciliation and collections
The facility compares expected reimbursement to the actual reimbursement provided by the third-party payers and patient.

Pre-claims

This portion of the revenue cycle is responsible for collecting the patient’s and responsible parties’ information completely and accurately for determining the appropriate financial class, educating the patient about his or her ultimate fiscal responsibility for services rendered, collecting waivers when appropriate, and verifying data prior to procedures or services being performed and submitted for payment.

Claims processing activities

Charge capture is a vital component of the revenue cycle. Charge capture can be accomplished in a variety of ways depending on the technological capabilities of the healthcare facility. The main processes included in this revenue cycle component include order entry, coding and charge generation with the charge description master, coding by health information management (HIM), auditing and review, and claims submission.

Accounts receivable

After the claim is submitted to a third-party payer for reimbursement, the time allowed to remit a payment to accounts receivable begins. Typical performance statistics maintained by the accounts receivable department include days in accounts receivable and aging of accounts. Days in accounts receivable is calculated by dividing the ending accounts receivable balance for a given period by the average revenue per day.

Claims reconciliation and collections

Collections can contact the patient to collect outstanding deductibles and copayments. Remittance advice indicates rejected or denied line items or claims. Facilities can review the RAs and determine whether the claim error can be corrected and resubmitted for additional payment. If a correction is not warranted, reconciliation can be made via a write-off or adjustment to the patient’s account. After the account has been settled, the revenue cycle is completed.

Purpose of Revenue Cycle Management

The purpose of revenue cycle management (RCM) is to improve the efficiency and effectiveness of the revenue cycle process. Each RCM team will develop different goals and objectives to guide their focus and discussions. Some sample objectives follow:

Identify issues to improve accounts receivable
Communicate issues with appropriate areas
Develop educational materials, such as a revenue cycle manual
Create a map or blueprint for how to bring up new services
Discuss denials, the appeal process, and successes
Discuss key performance indicators (KPI) and measures

After an RCM team establishes goals and objectives, team members must define optimal performance for their facility or practice.

Key Responsibilities of Individuals

Registration clerks collect the patient’s and responsible parties’ information completely and accurately for determining the appropriate financial class
Educate the patient about his or her fiscal responsibility for services rendered, collecting waivers when appropriate, and verifying data prior to procedures or services being performed and submitted for payment
Admitting representatives are responsible for collecting patient demographic data, such as age, date of birth, address, and the individual’s Medicare beneficiary identifier (MBI)
All clinical areas that provide services to a patient must report charges for the services they have performed
Monitor the number of accounts and the total dollar value in each increment
Coding management is responsible for organizing the coding process so that healthcare data can be transformed into meaningful information required in claims processing
The revenue cycle process includes admissions, case management, documentation, coding, and billing

Consequences to the Organization

Failure to report charges for services performed on a patient will result in a reimbursement loss for the healthcare facility
The older the account or the longer the account remains unpaid, the less likely the facility will receive reimbursement for the encounter
If correct personal and insurance information isn’t logged in the pre-claims, the organization could suffer a reimbursement loss

There are consequences to the organization when we do not execute each step of the revenue cycle correctly.

Additional Steps and Challenges

For uninsured patients, there are a few options we can offer:

Self-pay or out-of-pocket payment
Financial assistance, but patients must apply for a Medicaid plan
Private health insurance
Government financing

Making mistakes is inevitable; thus, it is important to make corrections and educate when human errors are identified. Staying in compliance with coding and billing is crucial as it will affect reimbursement. In today’s healthcare environment, every facility has a compliance plan. It is important for the RCM unit’s policies and procedures to be in alignment with the facility’s compliance plan. Because coding and billing affect reimbursement, this is a highly regulated area (Bowman, 2008, p. 115). The RCM leadership team must develop protocols to ensure compliance with the laws, regulations, and requirements for all payers, both government and private. It is a challenge to stay up to date with all the compliance guidance. Making compliance guidance a part of regular activities will help ensure that the RCM team stays focused on compliance. Likewise, a good working relationship with the facility’s compliance department will help the RCM team address and resolve difficult compliance issues.

Conclusion

We now should have a good understanding of how the revenue cycle process works and the challenges associated. Managed care dollars represent a significant portion of all healthcare organizations’ reimbursements. Each function in the revenue cycle is vital to creating efficient and compliant reimbursement processes. Each member of the team should understand other members’ contributions and their importance to the revenue cycle. This approach influences the entire team to take a proactive stance regarding reimbursement issues.

References

Bowman, S. (2008). Principles of Healthcare Reimbursement (6th Edition). American Health Information Management Association (AHIMA). https://capella.vitalsource.com/books/9781584266648

Casto, A. (2018). Principles of Healthcare Reimbursement (6th Edition). American Health Information Management Association (AHIMA). https://capella.vitalsource.com/books/9781584266648