Revenue cycle management (RCM) is more than a simple examination of billing activities. It’s a robust process—and it’s integral your practice’s survival in a changing marketplace.
Revenue cycle management (RCM) isn’t a singular event. It involves the relationship between the patients, providers, employees, payers and an overall understanding of the business process. Identifying areas for improvement in this cycle develops a better relationship between all of these individuals. A more harmonious work environment will also be created when operational efficiencies are developed.
RCM is a fairly new term in health care; it’s similar to what was previously known as a medical practice assessments. There are at least a dozen areas that can be isolated in this cycle. Segregating them for evaluation purposes is a recommended step to improving the overall operations. So, what should you know about a RCM analysis?
RCM Breaks the Revenue Cycle Into Three Areas:
- The Front End
- Includes pre-visit and visit activities such as patient scheduling/registration and co-pay/deductible collections.
- Transaction Processing
- Includes claims submissions, collection processing activities and the posting function.
- The Back End
- Includes all accounts receivable tasks involving both the patient and the payer.
Each component of RCM plays a distinct, yet integrated, part of the process. The better these relationships are understood, the better the overall outcomes will be when changes are implemented.
Associated Signs and Symptoms are Critical to a RCM Analysis
The RCM analysis gives you a way to holistically address issues within your revenue cycle. For example, if your practice is experiencing a problem with its accounts receivable and collections, it could actually stem from a completely different area of the revenue cycle. By looking at all areas of the revenue cycle, RCM allows you to see the connection and resolve the real source of the issue.
An analysis also lets you see how a change—such as when a payer renegotiates a contract—will truly affect your practice. Let’s say a payer allows your practice to increase prices by three percent, in the aggregate. What does this increase really mean? How will this impact your pricing and revenues? A RCM analysis will help you know what to expect.
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With 18+ years of professional experience in operations and accounting for medical practice groups, Annette Dunn has an adept perspective on the intersection between shareholders, key medical staff and the financial data. Throughout her professional work and advancement in the field of healthcare management, Annette uses her communication and collaboration skills to explain complex financial and operational data to users across all business areas.