Revenue cycle Management

1. REVENUE CYCLE MANAGEMENT
Lecture 1
Vijay Patil School of Management Prof. Kamlakar Gadegaonkar

2. LEARNING OBJECTIVES
• REVENUE CYCLE MANAGEMENT IN HEALTH
CARE
• STAGES IN REVENUE CYCLE MANAGEMENT
• HEALTHCARE REVENUE CYCLE PROCESS
• REVENUE CYCLE PROBLEMS AND SOLUTIONS
• REVENUE CYCLE MANAGEMENT SYSTEMS

3. REVENUE
• Revenue
defined as income , especially when of an
organisation and of substantial nature ....oxford
dictionary
Money compnay recieves for its products or
servcies from it’s customers
it’s not same as profit , it’s the total amount of
money earned by the organisation before
deducting expenses and taxes

4. • Revenue has significant impact on profit
• it’s important to create the widest possible
difference between cost and revenue of
the business
• Profit = Revenue -cost

5. Revenue cycle in Healthcare
• “All administrative and clincial functions
that contribute to the capture,
management, and collection of patient
service revenue “- HFMA
(HEALTH CARE FINANCIAL MANAGEMENT ASSOCIATION )
Involves several steps - patient registration
, insurance verification , claim filling ,
coding , documentation , reimbursement ,
payment posting, account recievables and
collection , refunds etc ...

6. • Any incorrect or erroneous entry at any point
in the revenue cycle can turn it in to vicious
cycle.
• the farther the erroneous entry moves in to
revenue cycle , the more difficult it becomes
to trace and rectify it

7. Revenue cycle Management
• RCM ( Revenue cycle management ) in health care refers
to process of manging claims, payments and revenue
generation
• RCM in health care helps a medical practice to increase the
revenue by proper claim management
• if the claims are partly settled or paid after a long period of
time, then resources from accounts recievables and
collection departments must be utilised to enure full
settlement of claims ...to avoid legal obligations
• Such delays on settlement amd consecutive follow ups from
accoutns receivables & collection departments would have
a negative effect on overall RCM

8. 9/17/2022 8
9/17/2022 8
What is Revenue Cycle?
All the administrative and clinical
functions, processes, and software
applications that contribute and
manage the registration, charging,
billing, payment and collections tasks
associated with a patient encounter.
Revenue Cycle is the process that
begins when a patient comes into the
system and includes all those activities
that have occurred in order to have a
zero balance
In other words, think… Zero to Zero!

9. “Hospitals exist in a very uncertain time.
Reimbursement risk runs high, and receiving
payments from patients is not guaranteed. The
ability to capture lost revenue and improve the
ability to forecast actual revenue received to the
budget is necessary for hospitals' and other
service providers' survival and vitality.”
Source: Wall Street 2010
Importance of Revenue Cycle
And You…

10. Revenue cycle Management
• Key players in RCM of healthcare
Time management and productivity play a critical role in
healthcare RCM
Four key players are involved in revenue cycle management
of health care
- Patient
- Health care provider(Hospital / Pharmacy )
- Billing company
- Insurance player
It is important that all the four players align their goals and
work in tandem so that RCM runs smoothely
Patient
Health
care
Company
Billing comapny
Insurnace
provider

11. Revenue cycle Management
• Stages in Revenue cycle
 Due to the automation of the revenue cycle process today,
computers have replaced the typewriters used by the
medical transcriptionists, papers have been replaced by
digital copies , electronic data bases and softwares have
replaced the manual processes
 Data is being shared electroncially thrugh processes liek
EDI or FTP
 the reulst is that overall cycle time has got reduced , and a
significant reduction in errors
 Human intervention is still the key in RCM to ensure it to
run smoothly as multiple stakeholders are involved

12. Impact of Information technology
• Efficient practice management softwares (PMS) seamlessly
integrates patient registration , insurance verification , rela
time transactions and information sharing , age , eligibility ,
documentation , coding , claim submission , payment
receiving and collection
• If a single software can handle all the processes , it would
be easier to detect mistakes, rectify it in timely manner ,
however differnt stakeholder work on different softwares
and hence challenges associated with integration result in
delays in claim processing and overall RCM fetting delayed.
• Henc eright choice of this software is crucial and can be the
differentiator between success and failure for the medical
pracitce

13. contd...
• A reserch study from US analysed the data reported by a large
insurnace company and found that of the all the claims raised @25%
were rejected
• of this 25% ...almost 40% claims were not submitted again due to loss
of data or documents , or the claim submission being done after
deadline or a helathecare provder does not bother to resubmit the claim
thinking that amount is too small and hence the hassels of claming must
be avodied
• One important reason to develope efficient RCM is workign on claim
denial and claim rejections
• Maximum number of such claims are dnied for frivilous reasons
• Proper RCM works on each stage diligently to increase payments and
collections while reducing the costs

14. THANKS