Mid-revenue cycle is becoming increasingly important for driving financial stability.
How do you define revenue cycle management (RCM)? Have you clearly delineated what is included in the front, middle, and back of RCM for your facility? You must do so before you can appropriately address the resource requirements for each component of the revenue cycle.
The revenue cycle includes all the administrative and clinical functions that contribute to the capture, management, and collection of patient service revenue, according to the Healthcare Financial Management Association (HFMA). RCM is the financial process that healthcare facilities use to track patient care episodes from registration and appointment scheduling to the final payment of a balance. RCM resources include people, processes, and technology used to keep track of claims through their entire lifecycle, ensure that payments are collected, and address any denied claims. RCM tools allow healthcare providers performing billing to follow a process and identify any issues quickly, allowing for a steady stream of revenue. A system running effectively prevents denials of claims and maintains a visible, efficient billing process. RCM also encompasses everything from determining patient insurance eligibility and collecting co-pays to properly coding claims using ICD-10.
As hospitals and other healthcare providers struggle to adapt to new reimbursement models, the “mid-revenue cycle” is becoming increasingly important for driving financial stability and improvements in quality performance. In general terms, the mid-revenue cycle is defined as the phase in the process between patient access and the activities of the care provider’s patient accounting or business office. The lines between the front, middle, and back of RCM are blurred and have overlap, so you are in good company if you find it a challenge to make clear distinctions. Some processes are rather fluid and are cross-functional, cutting across the entire revenue cycle. An example is monitoring for the correct patient identification or medical record number, which is a critical success factor.
The mid-revenue cycle has been described as being “the moment the physician puts pen to paper or literally finger to key to document the care that’s been delivered and the disease state of the patient, all the way to the completion of coding and the handoff of a case to the billing team in the business office,” according to an April 2015 edition of Healthcare IT News.
“Cost to collect” is a trending indicator of operational performance, and one of HFMA’s MAP Keys (FM-6), https://www.hfma.org/MAP/MapKeys/. It reflects the overall efficiency of a hospital’s collections management process. Health information management (HIM) expenses associated with the mid-revenue cycle are now recognized as a significant driver in the cost-to-collect calculation. According to HFMA, HIM expenses include the costs of transcription, coding, clinical documentation improvement (CDI), chart completion, imaging, and all related expenses associated with these functions, regardless of reporting structure.
In some organizations, the mid-revenue cycle also includes case management and utilization management. Mid-revenue cycle management systems now also can include technologies such as cognitive computing to help ensure that the correct medical codes are assigned to the correct patients, as well as robotic process automation to help speed up the process.
With the implementation of value-based payment systems like hierarchical condition categories (HCCs), physician offices now are recognizing the importance of the mid-revenue cycle to their bottom lines. They are also implementing processes such as CDI with physician queries and coding: top priorities for providers relying on performance bonuses and accurate payments based on patient risk.
Providers are increasingly seeking mid-revenue cycle management solutions to ensure accurate clinical documentation, coding, and data. According to a recent report, the mid-revenue cycle management and clinical documentation market is projected to reach $4.5 billion by 2023, growing at a compound annual growth rate (CAGR) of 7.9 percent.
Performance in RCM is measured in three phases: registration on the front end, coding in mid-cycle, and back-end billing. There has been much more emphasis on the front end of the revenue cycle, to receive payments upfront, or for a digital solution to set up periodic payments.
In the current state, there is an expanded understanding and appreciation of the importance of the mid-revenue cycle on the overall performance of the entire revenue cycle. As such, we can expect to see significant growth in identifying the right sizing of resources of people, processes, and technology for the mid-revenue cycle.
Listen to Bonnie Cassidy report this story live during today’s Talk Ten Tuesday, 10-10:30 a.m. EST.