Revenue has always been the bone of contention in any industry, however, nowhere has it been a more pressing issue than in the healthcare industry. It’s rather difficult for the healthcare providers to deal with all the different regulations imposed on them and this leads to issues in collecting the correct amount of revenue. Collecting revenues within the healthcare industry is way more complex than it ideally should be, however, revenue cycle management is a tool that can be used by almost anyone to make it simpler and more efficient. RCM basically involves the processing of payments, handling billing, and most importantly- collecting revenue. Most people don’t know what it is and this leads to confusion that could have easily been avoided with a little bit of studying.
In this article, we’re going to take an in-depth look at what RCM is and why it’s so important for you as a healthcare service provider. You’ll be able to understand how it works and how it can help you make your revenue handling easier and more efficient. So without further ado, let’s get to it and find out everything you need to know about revenue cycle management.
1. What It Is
As we discussed above already, RCM relates to the proper handling of billing, processing, and revenue collection. The entire cycle initiates when the customer makes a purchase and comes to an end when the payment is collected. There are many different types of businesses that handle this process very differently. For example, a retail store will be able to do both of these things at the same time which means that the cycle will be a very short-lived one. However, in certain cases like healthcare, it usually takes much longer because of the time difference between the patient coming in and actually having their issues solved. The hospital-based RCM process is usually a bit more time-consuming but it’s also very smooth. It enables you to bring in as much revenue as you’re legally entitled to and takes away the hassle that you might’ve had to face otherwise. Also, the statistics show that the global healthcare industry is set to grow further with each passing year, and this necessitates the use of RCM since such growth can’t be sustained without proper management.
2. How It Relates to Healthcare
We’ve already discussed how RCM is a handy tool that can be utilized by most businesses that have to deal with transactions that last long. However, you might still be wondering how RCM can actually be implemented in the case of healthcare services and how the transactions can be improved. One of the biggest advantages of utilizing RCM is that it helps with claim preparation. Every claim that’s made has to be supplemented with the patient’s treatment details and usually, this is done right before the very first appointment and helps cover the patient’s insurance. Many people underestimate the role of RCM but the Importance of revenue cycle management can be seen with an aspect closely related to the claim itself- the claim submission which finalizes the entire process of making claims from the insurance company. This shows that RCM is useful not only for the healthcare service provider but also for the patients. It helps avoid unnecessary errors that can easily be avoided, but if you’re careless about these errors, it can lead to complications in the future. The complications that can arise due to the errors related to a patient’s claims can even take a serious turn into the realm of legal battles. You definitely don’t want to deal with the legal ramifications as it can lead to huge financial losses for you and that’s something that every business wants to avoid.
3. How It Can Help You
Perhaps the most significant and the most sought-after benefit of implementing an RCM is the increase in revenue performance. Even though your revenue won’t increase magically just because you’ve implemented RCM, it’ll definitely help you bring it in faster, process it sooner, and save a lot on your expenses as well. Since the primary motive of you implementing RCM is to save money, this should be reason enough for you to adopt it. Even your visibility will improve quite a lot as your team can identify the core issues and inefficiencies in your systems which helps expedite all the processes. If you still feel that there aren’t many benefits of making the switch then you should think about the other aspects like the ability to demonstrate your value. You can very easily prove your organization’s prowess to the investors and stakeholders so that it’s easier to convince them. RCM will provide you with solid data that you can use to gain an upper hand and that’s something that you don’t want to miss out on. All in all, adopting an RCM is the best chance you can bring into the structure as it helps avoid all the frustrating parts of a business while helping you to improve the fundamental processes at the same time.
These are some of the most crucial things you should know about a revenue cycle management system. Most people are unaware of one or all of its aspects since it isn’t a widely adopted system yet. However, if you choose to adopt it then you’ll be able to witness significant changes rather soon. If you are still on the fence about this decision then go on ahead and compare the businesses that have adopted RCM to the businesses that haven’t. The differences you notice will be more than enough to convince you to make the switch. We’ve only discussed the basics and there’s much more to it than what’s visible from the outside. Whatever your reasons are for adopting the revenue cycle management system in your business, the important thing is that you make the change soon so that you can safeguard your business from the legal battles and all the loss of revenue that might happen at any time.