The industry that we serve on a daily basis is complex. We work within the healthcare space helping health systems, hospitals, clinics, medical billing companies, early out providers, physician groups, and providers manage what's known as the Revenue Cycle. Many people don't know what this means which is why we are announcing Etactics' Educational Whiteboard Series. This series of videos will explain the terminology, best practices, and procedures of our industry to make it easier to understand exactly what we do to help our clients get paid.
Episode 1 of the series lays out the foundation by explaining the process of the Revenue Cycle. The Revenue Cycle is defined by Oregon Health & Science University as, "All administrative and clinical functions that contribute to the capture, management, and collection of patient service revenue." Put in simpler terms it is the process that includes the entire life of a patient account from initial creation to the eventual payment. The processes within the revenue cycle flow into one another and the cycle may perform predictably. However, any problems that occur during the cycle will cause ripple effects and the further along the problem occurs, the more it will cost.
There are ten steps within the Revenue Cycle:
- Patient Scheduling & Registration - This step occurs when the patient initially schedules an appointment. If the patient is new to the practice, the patient will have to be registered. Depending on the practice, the patient will either be registered during the appointment or when the patient arrives.
- Insurance Verification - After scheduling, it's time to verify the patient’s insurance information and find out if they are eligible. Eligibility is a program that checks to see if a patient currently has insurance coverage and how much the insurance will reimburse the patient for the services they will be receiving.
- Visit and Co-Pay - After checking eligibility, the patient arrives to see the provider. Typically, this is a doctor, nurse practitioner or therapist. During this stage, the patient co-pay is also collected.
- Patient Exam & Documentation - The doctor, nurse, or therapist will then document the services performed, the diagnosis, and prescriptions from the visit during the Patient Exam Documentation phase.
- Coding & Charge Entry - In today’s world, many medical diagnoses and procedures have a defined universal medical code. The diagnoses from the visit will be transferred by billing staff into these code numbers to make them chargeable to the patient.
- Claim Scrubbing - After the data is entered, it is ready for submission. In the next step, the claim is double checked or “scrubbed” to make sure that all of the information that was enter is correct before submitting it to the insurance company or payer.
- Claim Submission - When all necessary checks and edits are created, the next step in the Revenue Cycle is the claim submission stage. This stage involves sending all billable fees to the insurance company via a universal claim form for payment.
- Payment Processing & Posting - After the form has been submitted for payment to the insurance, they either accept or reject it. If the claim is accepted it is then posted with information on how much of the requested amount of money was paid. If a claim is denied, then the reason for the denial is usually given.
- Denial Management - If the claim is denied, it can likely be reworked, resubmitted and accepted. This process is called denial management. 1 in 10 payments are incorrect and can be very costly to an organization if the claims are not re-worked.
- Payment Processing and Posting - Next, it’s time to send the information back to the patient. After it has been determined that a patient has insurance and their claim has been accepted, a statement is then sent to the patient with all of the information about the visit and how much money they still owe.
After step 10 it’s then up to the patient to pay the amount of money that they still owe. Collecting from patients can sometimes be very easy, but also can be very frustrating. Handling overdue payments is a process within itself that we will go over in a future episode. To watch and learn the Revenue Cycle process, click the play button on the video above.
To learn more about our company and how we help manage the Revenue Cycle, click here.