Essay Sample on Healthcare Revenue Cycle Management

Paper Type:  Essay
Pages:  4
Wordcount:  1089 Words
Date:  2022-11-22


Health care systems, small practices, and hospitals are known for improving people's health by treating patients and saving lives. One aspect of health care management, which is not known to the public, is that it develops successful policies and processes that help it stay financially healthy. This is what is termed as healthcare revenue cycle management (DiChiara, 2016). The revenue management processes start when a patient makes an appointment for seeking medical services. The management ends upon the collection of all the patient's payments and claims.

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Steps in Healthcare Revenue Cycle Management

The steps in healthcare revenue cycle management include charge capture, which entails medical services rendering into billable charges, claim submission, which includes claim submission to insurance companies for billable fees, and coding, which entails proper procedures and diagnoses coding (Rouse, 2017). Another important step is the patient collection, which entails the determination of patient balances and payment collection. Pre-registration is another step, which involves the collection of pre-registration pieces of information such as outpatient procedures, inpatient procedures, and insurance coverage (Pillittere, 2016). Registration, which is another step involves the collection of subsequent patient data for establishing a number for medical record as well as meet the various clinical, regulatory and financial requirements. The next step is the processing of remittance, which involves the application or rejection of payments through processing of remittance. This is followed by the third party follow up, which involves the collection of payments (Rouse, 2017). Lastly, utilization review is done through examining the necessity of the medical services.

Figure SEQ Figure \* ARABIC 1: The Revenue Cycle. (Source: Rouse, 2017)

The steps above can be categorized into registration, medical coding, and collections or billing.


The first stage of the healthcare revenue cycle is registration at the registration department. This function allows the service providers to get all the necessary pieces of information needed in billing an insurance company. The function is performed at the reception where the patient fills in the necessary details, which are fed into the computer and included in the patient's file. At this stage, clerical errors may occur within the patient's registration processes. Such errors are associated with the cases of non-clinical denials by the insurance payers (LaPointe, 2016). The data fed into the computer at this stage must be reflective and verified as simple errors may lead to loss of huge amounts of money after the patient is attended to. Some of the errors at this stage include failure to validate insurance benefits/cover, inputting the wrong date of birth or gender, or misspelling the name of the guarantor.

In most cases, such errors can be easily corrected upon the submission of new bills to payers, that is, after making corrections to the mistakes made at the registration department. One of the ways of correcting such errors is monitoring the cases of denials daily so that education and training can be carried out to address the specific sources and causes of the errors (Rosario, 2018). This helps in the identification of the staff within the registration department that needs training.

Medical Coding

A vital aspect of healthcare revenue cycle management is achieving compliance with the regulations for medical coding. When coding is done optimally, increased revenues and reduced claim denials from the insurance companies become the result. This is important as it reduces losses that would make the management of the health facilities difficult. For instance, when optima; coding is achieved, a medical practice can be more successful as it will prevent disruptions in medical flow as well as avoid penalties in regulation.


Collection and billing, which is done at the patient finance services department to the business office involve the response by the billing team who are given the task of submitting complete UB-04 claim. The team also submits a physician billing (CMS1500) form to the companies that pay the insurance. This is done after the patient has already received either outpatient or inpatient services from the healthcare facility. At this stage, a scrubbing system for the third party is usually used in ensuring that the claims are as complete and as clean as possible (Rosario, 2018). Some of the errors at this point include the failure to include the edits from the other departments. Other edits also occur from automatic updates of raw data for the claim, which is received from the host system. Denial from the payers, which is another challenge faced at this stage is the reason scrubbing is done. Such denials may prolong reimbursement to the providers thereby crippling the activities at the facility. The complete claim is then sent to the payer from the provider in a standard format known as ANSI 837 5010. In case the claim cannot be adjudicated, denials are sent back to the claim as a response. Specific reasons why the claim cannot be adjudicated must be provided in the response. Once the response is received denial management processes are started in a bid to ensure that immediate resolution to the problem is found. One of the roles of the denial management team is to identify, and issues are trending within the workflow processes of the provider to establish if they are clerical-related or clinical-related (LaPointe, 2016). After establishing the source of the error, feedback is sent to the revenue cycle department responsible. This is only done if such departments are found at fault, or are the cause of the denial. Usually, such feedback is used to establish clerical/registration entry and medical necessity errors.


In healthcare revenue cycle management, processes that facilitate the use of finances to help in the management of the clinical and administrative functions associated with revenue generation, payment, and claims processing are undertaken. The processes involved here include patients' service revenue identification, collection, and management. Since healthcare revenue cycle, management is the strategy used in healthcare organizations to manage their funds and pay bills; it is practically impossible for such organizations to open their door to patients and treat them if it is not conducted effectively and successfully.


DiChiara, J. (2016). What Are the Front-End Steps of Revenue Cycle Management?. Retrieved from

LaPointe, J. (2016). What Is Healthcare Revenue Cycle Management?. Retrieved from

Pillittere, S. (2016). Moving Past the "Model Hospital" with Revenue Cycle Management. Retrieved from

Rosario, C. (2018). A Complete Walkthrough of the Healthcare Revenue Cycle Management Steps. Retrieved from

Rouse, M. (2017). What is revenue cycle management (RCM)? - Definition from Retrieved from

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Essay Sample on Healthcare Revenue Cycle Management. (2022, Nov 22). Retrieved from

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