2. Vocabulary
• Revenue Cycle - the regularly repeating set of events that produces revenue.
• Revenue Cycle Management (RCM) – the supervision of all administrative & clinical functions
that contribute to the capture, management, & collection of patient service revenue.
• Copayment – cost-sharing measure in which the policy holder pays a fixed dollar amount per
service, supply, or procedure that is owed to the facility by the patient.
– Examples:
3. Vocabulary Con’t
• Charge Capture – the process of collecting all services, procedures, & supplies provided
during patient care.
• Charge description master – database used by healthcare facilities to house the price list for
all services provided to patients.
• Hard coding – use of the charge description master to code repetitive services.
• Deductible – annual amount of money that the policyholder must incur (& pay) before the
health insurance will assume liability for the remaining charges.
• Remittance advice – report sent by third-party payer that outlines claim rejections, denials,
& payments to the facility; sent via electronic data interchange.
• Explanation of benefits (EOB) – report sent from a healthcare insurer to the policyholder & to
the provider that describes the healthcare service, its cost, applicable cost-sharing, & the
amount the healthcare insurer will cover. The remainder is the policyholder’s responsibility.
• Key performance indicator – area identified for needed improvement through benchmarking
& continuous quality improvement.
• Accounts receivable – department in a healthcare facility that manages the amounts owed to
the facility by customers who have received services but whose payment is made at a later
date.
5. Revenue Cycle Flow Chart
Patient presents to hospital Demographic & payer information
collected
Services rendered Charge items captured
Coding Claim submitted to payer
Payer
provides EOB
to patient
Payer provides
reimbursemen
t & payment
information to
the providerOutstanding
copayments &
deductibles
collected from
patient
6. Patient presents to hospital
• Shanda arrives at the ER with stomach pains &
vomiting.
7. Demographic and Payer Information
Collected
• Registrar is responsible for collecting the patient’s
& responsible parties information completely &
accurately.
• Educate the patient on their financial
responsibility for services rendered.
– Such as copayments or deductibles.
• Verify data prior to procedures/services being
performed.
– Navinet is useful tool for verifying patient eligibility &
insurance plan details .
8. Services rendered
• Charge capture is vital.
• All clinical areas that provide services to a patient
must report charges for the services performed.
• Electronic order entry systems capture the charge
at the point of service delivery.
• Paper-based process are when the paper forms
are collected & then entered into the patient
accounting system, where the charge is then
transferred to the claim.
9. Charge Items Captured
• Coding is a major portion of charge capture.
• Claims submission regulations require ICD-10 &/or
HCPCS codes to be reported on a patient’s claim.
• Several types of visits are designed to have procedure
codes posted to the claim via the charge description
master (CDM).
– During order entry a unique identifier for each service is
entered.
– The unique identifier triggers a charge from the CDM to be
posted to the patient’s account.
– This is know as hard coding.
10. Coding
• Inpatient or complex ambulatory surgery,
require the diagnoses & operating room
procedures to be coded by health information
management.
• During this process, medical records are
viewed & read by the coding staff.
• All diagnoses & procedures are identified &
coded.
• Then they are posted to the patient’s claim.
11. Clearinghouse
• Once the claim is billed out it goes to the clearinghouse.
• The claim then goes through internal auditing system
known as scrubbers.
• Each claim runs through a set of edits specifically designed
for that third-party payer.
• The scrubber identifies data that has failed edits & flags the
claim for corrections.
– Examples
• Incompatible dates of service.
• Inaccurate diagnosis or procedure codes.
• Provider credentialing issues.
• Patient eligibility issues.
12. Submission of Claims
• Once reviewed & corrected, the claim can be
submitted for payment.
• Most larger insurance payers receive the
claims electronically.
• Small insurance payers such as auto, workers
compensation, etc. will receive a paper claim.
15. Transaction Rule
• Ensures that all providers, third-party payers,
claims clearinghouses use the same sets of
codes to communicate coded health
information, ensuring standardization for
systems & applications across the healthcare
continuum.
16. HIPAA Electronic Transactions
• Healthcare claims or equivalent encounter
information.
• Eligibility for a health plan.
• Referral certification & authorization.
• Healthcare claim status.
• Enrollment & disenrollment in a health plan.
• Healthcare payment & remittance advice.
• Health plan premium payments.
• Coordination of benefits
17. HIPAA Code Sets
• International classification of diseases, 9th
edition, clinical modification, volumes 1 & 2
• International classification of diseases, 9th
edition, clinical modification, volume 3
• National drug codes
• Code on dental procedures & nomenclature
• Healthcare financing administration common
procedure
• Current procedural terminology, 4th edition
21. Key Performance Indicators
• Dollar value of discharged encounter
• Days from discharge to coded
• Number of accounts receivable days
• Percentage & amount of write-offs
• Percentage of clean claims
• Percentage of claims returned to provider for
correction by third-party payers
• Percentage of denials by third-party payers
• Percentage of late charges
• Percentage of accurate registrations
22. Important Points
• Accurate patient registration
• Accurate coding
• Remember timely filing limits for original
claim submission for insurance payers
• Learn denial codes
• Learn corrected claim timely filing limits
• Learn capitation codes
• Recognize credentialing issues
