Revenue Cycle Management - Report Example

Introduction

In a hospital, medical practitioners may be doing an excellent job, but it is vital to monitor the financials of the organization. Without a process to follow how the financials of a hospital are going, the organization can find itself in a desperate situation to try and stay afloat to support the medical processes and other relevant functions. Revenue cycle management is the collection, processing, and management of revenue from service provision in the hospital (Singh et al., 2016). In the diagram above, it consists of seven steps, including; outsourcing, patient pre-authorization, patient benefits, and eligibility confirmation, claims submission, payment posting, denial management, and report generation (Babasaheb & Devi, 2018). The above revenue cycle management is essential to make the billing process viable and manageable, and its analysis is as follows.

Is your time best spent reading someone else’s essay? Get a 100% original essay FROM A CERTIFIED WRITER!

Save 25%

Outsourcing

The revenue cycle management processes depend on the size of the organization. If the hospital is small and has a sufficient information technology department, then installing the revenue cycle management software will fulfil the functions (Singh et al., 2016). The software can operate within the hospital's servers or externally, depending on the preference of the hospital management. However, big hospitals may require outsourcing the revenue cycle management software because of the massive scope of data and processes to handle (Babasaheb & Devi, 2018). It enables the hospital to focus on the medical tasks and leave the technological processes of revenue management to experts.

Pre-authorization of Patients

Patient pre-authorization is a legal process for the insurance company covering a patient to confirm that the medical operations in the treatment are necessary, including service, procedure, prescription, and intervention plan (Babasaheb & Devi, 2018). However, it does not yet give responsibility for the insurance company to pay for the patient expenses. Patient pre-authorization does not apply during emergencies (Singh et al., 2016). The hospital and the patient are responsible for confirming whether the medical services are in the coverage plan of their insurer.

Benefits and Eligibility Verification

The front-office staff in the hospital usually completes the verification of patient eligibility and their benefits (Babasaheb & Devi, 2018). It can be either via phone or through secure online channels that connect to the insurance companies or universal coverage institutions. The latter is a faster and more convenient way as it saves time because it does not involve lengthy calls, and it is automatic (Singh et al., 2016). The process is part of the revenue cycle management software, which speeds up the whole process without the need for additional applications.

Submission of Claims

All offices in the hospital need to submit claims of the processes they perform on the patients (Babasaheb & Devi, 2018). It is crucial to managing payments from different hospital departments. The revenue cycle management software is installed in all departments, making it a simple process, with patient records to support the payment claims. Manual submission of claims is a hectic process, and it is most likely that errors in data entry may occur. The revenue cycle management software is also crucial as it allows editing, in case of mistakes, therefore, ensuring the integrity of the data (Singh et al., 2016). It accelerates revenue flow and gives the hospital more control. Overall, it makes it easier to monitor the revenue collection process and minimizes errors.

Posting Payments

After claim submission and verification, the next process is to create a billing statement. The patients can then pay for their services at one point. Patients can also receive messages, for example, through email of the payment information and services, apart from the hard copy (Singh et al., 2016). At this point, patients can also get reimbursements for compensation in low quality or non-delivery of services of products like medicines (Babasaheb & Devi, 2018). The Electronic Data Interchange comes in handy to facilitate cashless and fast transactions.

Denial Management

When patients receive reimbursements for claims, the revenue cycle management software records the process. The hospital management, finance, and human resource departments analyze the information and make decisions on various factors or issues, especially if the claims are at an unsustainable level (Singh et al., 2016). It enables the hospital to solve problems of low services and improve quality and efficiency across the different departments in the hospital. Issues can include poor working habits, clashing schedules, and billing malfunctions for specific medical processes (Babasaheb & Devi, 2018).

Reporting

Reporting is the final process in revenue cycle management, and it involves the creation of reports on the financials of the hospital (Singh et al., 2016). They are essential documents for analysis by the administration and the hospital stakeholders. Revenue cycle management software automatically generates financial reports on request (Babasaheb & Devi, 2018). Financial statements are useful to identify primary performance indicators and underperforming departments at the hospital. The manual creation of financial statements is a hectic process, and it can result in errors.

Conclusion

Revenue cycle management is a crucial process; however, it is complicated yet necessary. Pre-authorization is the first process in revenue cycle management because patient and insurance consent is essential before service provision. Some patient groups can have benefits at the hospital through policies, and they should be in the billing system. The hospital manages claims through the revenue management cycle. Claims are useful to identify problems in the hospital, and the organization can analyze to correct the situations. Effective revenue cycle management is possible via integrated software for the best results.

References

Babasaheb, J., & Devi, K. (2018). A Study of Revenue Cycle Management of the Hospital. International Journal in Management & Social Science, 6(9), 196-214.
http://www.indianjournals.com/ijor.aspx?target=ijor:ijmss&volume=6&issue=9&article=015

Singh, R., Mindel, V., & Mathiassen, L. (2016). IT-based revenue cycle management: An action research into relational coordination. 2016 49th Hawaii International Conference on System Sciences (HICSS).
https://doi.org/10.1109/hicss.2016.396.