What Are Revenue Cycle Management Services and How Do They Work? Revenue cycle management, or RCM, is a term that healthcare organizations have been using for years to describe the comprehensive approach to managing their operations and financials.
RCM has two main components: An effective revenue cycle management service helps providers control costs while enhancing reimbursement from third-party payers through efficient coding, billing, and collections processes. Secondly, it ensures resources are allocated toward services most likely to improve clinical outcomes. This combination generates more income with less administrative effort for the provider.
For context, let’s first define what revenue cycle management is.
RCM is a group of processes that help providers collect payments for patient care and other services in the simplest terms. The revenue cycle consists of four major activities:
- Patient registration
- Billing and collection
- Accounts receivable management
- Revenue cycle analytics and reporting
For example, an orthopedic surgeon would need to perform these steps when providing a knee replacement procedure for a patient. Once the procedure is complete, his office may bill the patient’s insurance company directly for all related expenses. It will also submit a claim to Medicare and Medicaid separately; either entity can provide reimbursement.
The steps outlined above are necessary to manage a practice effectively, but it can be arduous to perform them manually. RCM services create efficiencies by automating these tasks while also providing insight into how an organization is performing financially with revenue cycle management analytics tools. In addition, these software solutions often integrate with existing IT systems and connect with third-party payers, billing platforms, and collection agencies — thereby eliminating redundant work in each of those areas. They also help providers qualify for government reimbursements, so they avoid costly denials.
Discover how revenue cycle management services can improve operations for your practice. Contact AZZLY at Sitename today to learn more.