The medical revenue cycle is the process of managing a patient’s account from the beginning when they are pre-screened for financial coverage and their account is created, to the final payment of their bill at the end of the account cycle. You must manage patient data as it moves through the various departments in your healthcare organization, and in the process, maintain the accuracy of your records. Ensuring that your records are as accurate as possible will help you manage your organization’s revenue.
In this Article …
- The Medical Revenue Cycle in 9 Steps
- Step 1: Pre-Registration
- Step 2: Registration
- Step 3: Charge Capture
- Step 4: Utilization Review
- Step 5: Coding
- Step 6: Claim Submission
- Step 7: Remittance Process
- Step 8: Insurance Follow-Up
- Step 9: Patient Collections
- The Medical Revenue Cycle is the Key to Your Success
The Medical Revenue Cycle in 9 Steps
There are many ways to break down the steps of the medical revenue cycle. Some businesses combine steps or outsource the process, but here are the nine main steps to follow.
Step 1: Pre-Registration
Not all healthcare organizations employ this step but you may find it very beneficial to your medical revenue cycle. Pre-registration involves software that you can use to collect a patient’s data prior to when the patient schedules an appointment. By collecting their insurance and billing information in advance, you will be able to provide an estimate of how much the patient will owe for the planned services. You will also know their copay and deductible.
Data to collect during this step:
- Patient name
- Patient demographic information
- Patient-relevant medical history or reason for the visit
- Insurance information
- Billing information
The No Surprises Act of 2021 requires providers to furnish a good-faith estimate of the amounts a self-pay patient is expected to pay for services that are scheduled in advance. This is the time to develop and communicate that estimate to any self-pay patients.
Step 2: Registration
This step happens when the patient comes in for an appointment, or it may have been completed online by the patient. At this point, you can ask them to confirm their medical history and complete any necessary forms. Your organization will benefit from this step by catching any data entry errors resulting from the pre-registration patient history.
During registration, once the patient arrives at your business, you can verify:
- Insurance coverage
- Identification
- Phone Number
- Address
- Date of Birth
Step 3: Charge Capture
For each patient, charges for expected services must be captured onto a claim which is then submitted to the patient’s insurance company or health care plan. This is a crucial step, as it confirms the accuracy of the charges and how your healthcare organization will ultimately be paid.
Step 4: Utilization Review
If it is necessary, the patient’s insurance company or health plan performs this step. Here, they review the medical necessity of the planned services. The insurance provider will determine whether it will cover these services for this patient and remit the information back to you.
Step 5: Coding
After the insurance provider has confirmed its coverage and the procedure has taken place, the procedure or procedures must be coded into billable charges. Each procedure is assigned a billing code, and coders are trained to translate the documented procedures from the patient’s treatment record into these billable codes. The codes are then used to create claims for payment and bills for the patient.
Step 6: Claim Submission
When the claim has been created and coded, the next step is to submit those claims to the patient’s insurance company or health plan – the payors. The payor will review the claim and look for any errors or mismatches between the claim and the previously approved procedures.
Step 7: Remittance Process
Once the payor has processed the claim, it remits information to you about how much will be paid for the claim. Any errors or mismatches discovered can delay the claim payment. If there are errors found, you will have to resubmit the claim. Resubmission will postpone your payment from the payor and allow you to bill the patient for any final patient responsibility amount. You need to consistently review your remittances to check for errors; you may be missing payments.
Step 8: Insurance Follow-Up
At this point in the medical revenue cycle, you have actually collected payment from the payor. During this step, you may experience issues from nonpayment for claims, denials for claims, and under or over-payment of claims.
Step 9: Patient Collections
Once you have collected from the payor, you must determine the amount left over on the account and determine any remaining patient responsibility. For some organizations, this is often one of the hardest steps to complete. Make sure to send out statements promptly; the sooner you send the statement, the sooner you have a chance to receive payment.
Another part of collections is monitoring outstanding accounts to collect payments from the patients who still owe money. This step is becoming even more important as patients’ deductibles increase. The burden is shifting more to the patient for services performed. You should be upfront about the charges and fee schedules in your business, giving the patient ample notice of payments due. The more they know ahead of time, the more likely they are to pay their account in full.
The Medical Revenue Cycle is the Key to Your Success
Managing this cycle well is vital to the success of your healthcare organization. And as your organization grows, the more patients you will see, and the more data you will collect. The more data you have to manage, the more chance for error and loss. Your business might be large enough to devote a team to revenue collection or you may only have one person for this function. In any case, attention to each of these steps in the medical revenue cycle will help you succeed in securing payment from patients and insurers for your valuable services.