RCM 101: The 13 Steps of Revenue Cycle Management

Is your medical office drowning in paperwork?

Are you sure you’re billing for all the services you’re providing?

Do you stay up at night wondering if the insurance companies will pay you?

If any of these worries sound familiar, then you need to review your revenue cycle management process.

Following these 13 steps of revenue cycle management will help you set up a proper system that’s easy to follow and will keep your practice viable and thriving. 

13 Steps of Revenue Cycle Management

What is revenue cycle management or RCM?

It’s the process of managing funds, billing for, and collecting payments for the treatments and services you offer your patients. Once in place, these procedures can allow you to focus more on patient care and less on financial management.

1. Choose Your System: Healthcare RCM Software or Outsource Processing

Mid-sized offices with team members who are comfortable using medical billing software could do this themselves. However, a very small team or much larger organization should consider outsourcing the RCM process to a third party.

2. Train Your Staff

Once you’ve chosen your system, train your staff so everyone knows their role in the process. The more comfortable they are, the less chance for errors during the process.

3. Patient Registration

Collect all appropriate information from your patients including a copy of their insurance card(s) and verifying their identity. Ensure returning patients’ information is up-to-date and confirm any changes in insurance.

4. Insurance Verification

RCM software automates the process of checking a patient’s eligibility for their insurance, what benefits the insurance covers, and any patient responsibilities such as co-payments and deductibles.

5. Patient Pre-Authorization

In this step, the insurance companies determine if the services, procedures, or medications being requested are medically needed. This pre-authorization determines if they will reimburse for them or not.

6. Collect Co-Payments and Deductibles

At the time of service, the patient should pay their co-payments and any out-of-pocket expenses they are required to pay. Or, if necessary they should arrange a payment plan according to the parameters your office allows.

7. Code Services into Billable Charges

Everything that happens in the office is transformed into a set of codes that ensure the insurance company reimburses your office. The codes follow the rules set up by the CPT guidelines and ICD-10 coding system. 

8. Submit the Claims

Once services are coded, the claims can be submitted to the insurance company. Practice management software is useful as it allows you to do this automatically and in batches to save time. 

9. Reimbursement for Services

Once the insurance companies match the procedures to their charges and verify the coverage limit, they are able to accept the claim. Then, any remaining amounts that the insurance company does not cover are billed to the patient.

10. Denial Management

Denied claims are inevitable and can cost your business money. But with a denial management system in place, you can immediately review, correct, and resubmit erroneous claims, increasing your chances for proper payment.

11. Payment Variances 

Similar to denial management, any variances in payments received against the expected amounts should be immediately reviewed. Make any necessary corrections and resubmit them for payment.

12. Patient Collections

Any remaining balance the insurance company is not reimbursing is billed to the patient. Having a proper RCM system in place ensures your patients are billed efficiently and correctly.

13. Reporting Systems

The RCM software is able to generate reports to help you evaluate financial data and management information all along this process. The proper reporting system creates a more efficient office and helps eliminate errors and denials. 

The Perfect Practice

Medical billing may not be the easiest process, but with the proper system in place, it can be easy to manage. Using these 13 steps of revenue cycle management, you will keep your office profitable and flourishing for years to come. 

Feel free to keep browsing our site for more great reads!