How to Improve Healthcare Revenue Cycle Management
How to Improve
Here are some RCM recommendations such as joining front
and back-end functions that can help healthcare
organizations streamline their revenue.
Trends such as value-based reimbursement and healthcare consumerism
have changed the way healthcare is delivered and paid for. Revenue cycle
management (RCM) is the process of handling claims, processing payment
and generating revenue in the healthcare industry. Medical billing
companies with years of experience in managing medical claims can help
providers to meet their RCM requirements, allowing for a steady stream of
revenue. The process includes everything ranging from determining patient
insurance eligibility and collecting co-pays to accurately coding claims using
CPT, HCPCS or ICD-10 codes.
Though maintaining a steady income for hospitals is difficult, there are many
opportunities to significantly improve your revenue cycle management.
Join front-end and back-end RCM tasks
While the front-end staff collects information from patients, confirm
insurance coverage and eligibility, and register new patients, back-end
revenue cycle management includes claims management, denials
management, medical billing, and final patient financial responsibility
collection. When combined, these tasks results in complete healthcare
In an article published by RevCycle Intelligence, Rebecca Wright, Vice
President of Strategic Planning at the 25-bed Iroquois Memorial Hospital in
Illinois has shared her experience on how her organization boosted point-of-
service patient collections by 300 percent by shifting back-end business
office functions to the front-end. This front-end approach to RCM and
patient collections helped the hospital to even exceed a $7,000 per month
collection goal for all point-of-service payments, including walk-in visits. The
first step that was taken to improve the hospital’s chances of receiving
point-of-service payments was identifying the major inefficiencies in patient
access and RCM. It was found that revenue cycle fragmentation and lack of
patient collection understanding prevented the hospital from realizing more
patient payments. Also, patient access staff lacked understanding how
patient responsibilities were calculated and what was actually needed to
process a claim. Steps taken include:
Training on patient collection focused on a basic understanding of
patient financial responsibility was provided for hospital staff
Once staff understood the basics, the hospital worked on breaking
down RCM silos by allowing different patient access employees, such
as billers, centralized schedulers, and registration staff, to teach their
colleagues about their position.
Patient education was also provided, as the hospital expected patients
to pay for services upfront or make a plan to fulfill their financial
responsibility. Improved awareness made patients more willing to
make the payments upfront.
Along with improving patient collections and enhancing claims
management processes, the hospital also boosted staff productivity by
eliminating 33 hours a month spent on medical necessity verifications.
It is also recommended to consider taking suggestions from the frontline
staff, as they may have a lot of insight to share and making them active
participants in a culture of improvement helps to guarantee sustainable
Focus on Patient Financial Responsibility
A key component to the front-end revenue cycle is upfront patient
collections. More and more hospitals are now setting up programs for
patients to pay for their care in advance. As high-deductible health plans
increase in popularity, patients are responsible for a significant portion of
healthcare costs. According to the 2016 InstaMed survey, approximately 74
percent of healthcare providers reported a significant increase in patient
financial responsibility in 2015 because of high-deductible health plans.
Front-end staff must be trained to educate patients at the time of the visit
about what their insurance covers, what they will owe, how to pay, and what
services are included.
Implementing electronic payment methods can also streamline collections,
as patients can log in to online portals and pay their bills at their
convenience, thus taking responsibility for their healthcare costs. However,
healthcare organizations must take crucial steps to securely store credit card
information in an electronic format. More flexible payment options can help
patients to pay their large medical bills over time.
Automated Prior Authorization Solutions
Insurance verification services and prior authorization support help
organizations to reduce denials, minimize delayed payments and improve
patient care and satisfaction. Automated authorizations and verification
process can reduce administrative costs caused by manual processes, thus
optimize healthcare revenue cycles and clinical processes. According to the
2016 CAQH Index, manual prior authorizations cost providers an average of
$7.50 per transaction, while electronic prior authorizations only cost $1.89
per transaction. With automated process, staff can also reduce the time it
takes to fulfill prior authorization and eligibility requirements and can focus
on high-priority tasks, such as patient collections.