RCM, or revenue cycle management, is a financial framework that enables healthcare practices to get paid for providing medical services. It is colloquially referred to as medical billing due to its complete reliance on billing and coding work. Nonetheless, it is a complete cycle that starts with the patient registration or scheduling and ends with the payment collection and posting.

RCM is a vital component of healthcare financial operations. It is a streamlined way how medical facilities get paid for their services. And it is regulated by major bodies like CMS, AMA, and HIPAA.

Steps Involved in RCM Medical Billing

RCM fundamentally involves the following steps:

Patient Pre-Registration

It is the first step of RCM and involves collecting fundamental patient information like demographic details, contact information, and scheduling preferences. It also involves verifying their insurance eligibility to avoid any payment difficulties later on.

Insurance Verification

This step involves determining and confirming a patient’s insurance coverage and benefits. It also includes checking whether the healthcare facility has billed rendered services correctly. Down the road, insurance verification also helps estimate the patient’s responsibility.

Patient Registration

Patient registration advances the process of information collection. It involves gathering crucial patient details like medical history and patient consent. This information is then entered into the patient management system to advance the RCM process.

Charge Capture

This step involves recording and documenting all the billable services provided to the patient. The billing team must ensure that they have covered all the charges. This helps prepare precise claims.

Claim Submission

Claim submission refers to compiling and submitting the medical claim to the insurance company. It involves a number of steps before the billing team hits the send button. The major step is the allocation of the latest ICD-10 and CPT codes to the services rendered. Other important steps include insurance policy re-checking and claim scrubbing to eliminate any errors that may lead to a denial or rejection.

Claim Adjudication

Claim adjudication is a step at the payer’s end as they analyze and process the submitted claim. They examine the claim for its accuracy and compliance with the insurance policy. Then, they decide whether to proceed with the full or partial payment or deny the claim entirely. The job of the healthcare providers at this stage is to ensure they have adhered to all the steps above.

Payment Posting

During this step, the healthcare revenue team updates the patient accounts with the payments received from the payers or patients. It is one of the final checks to ensure that the payment received matches the amount billed. It is a vital process for maintaining accurate financial records.

Denial Management

In case of a denial, the RCM team works to identify, analyze, and rectify the claim to secure its reimbursement. For this, they first review the denied claim, identify the denial’s root cause, and categorize the denial based on that root cause. Then, they prepare an appeal and submit it along with the corrected claim. Once that’s done, they adjust the billing strategy to avoid such denials in the future.

A/R Follow-Up

This step involves the RCM team tracking and requesting outstanding payments from the payers and patients. To get it done, they analyze and prioritize the aged accounts for follow-ups. Then, they engage with the payers and patients, requesting them to pay the dues. Patients, in particular, are sent patient statements with details of services rendered and their costs.

Patient Payment Collections

During this step, the RCM team works to get the patients to pay their part of the bill. It involves educating those patients about their responsibility. It also includes providing them with flexible payment options to ensure timely payments.

Revenue Analysis And Reporting

This step is more about checking the overall financial performance of a healthcare facility. It involves examining the financial data in a more objective manner. The main aspects of this step include:

• Regular reporting
• Tracking important KPIs
• Setting performance benchmarks
• Ensuring data integrity
• Encouraging collaboration between revenue and financial teams

Compliance

The final and equally important step of RCM is compliance. It is a strategy to ensure proper adherence to regulatory and insurance guidelines. It also involves setting up internal policies and operations to ensure everything remains streamlined. And finally, it involves regular audits to identify lags and apply fixes accordingly.