WHAT ARE THE SIX STAGES OF THE REVENUE CYCLE IN HEALTHCARE?

By eZmR7a

As per the Global Market Insights statistics report, “Healthcare revenue cycle management market size was valued at more than USD 140 billion in 2022. Driven by cumulative health spending, the industry is primed to grow at over 12.5% CAGR from 2023 to 2032.“

This statistical data indicates the significant standing of revenue cycle management in the healthcare industry and how practices are becoming aware of its considerable gains, driving financial success, operation efficiency, and feasibility through proper execution.

With revolutionized business processing in every industry and continuously shifting ways to satisfy customers and enhance services, it becomes highly critical for the healthcare domain to grow with the latest technology, ensuring market competency and an edge over competitors. This advancement is also necessary to offer your patients a service experience that is positive, supportive, and collaborative, leading to loyalty and increased profits consequently.

Revenue Cycle Management And Its Need In The Healthcare Industry

When it comes to the service-centered progression of practices, effective management of revenue precedes the list. This is a service factor that majorly associates with almost every other facet of your service and patient communication; hence, administrating it with a result-driven approach can surely bring a positive and thriving revolution to your overall organization. In this respect, revenue cycle management systems are the core of the resolution. These systems are technologically supported and offer comprehensive handling of the entire cycle, lessening staff expenditures, time consumption, and operational faults in the process.

So what entails the revenue cycle in healthcare? In healthcare businesses, the revenue cycle is a long and wide-ranging process, generally comprising six stages, commencing with the patient’s registration and finalizing when the total payment for the services provided is reimbursed. This whole cycle is highly information and time sensitive and requires meticulousness and diligence at every step to ensure effortless payment collection.

The strategically planned and well-carried-out management of the revenue cycle provides superior benefits to the medical service in terms of financial stability, timely reimbursement, compliance, and regulatory requirements, reduction of billing errors and denials, enhanced operational efficiency, and data-driven decision-making. With such wide scope advantages of an efficient revenue cycle, its magnitude in the progression of medical services becomes apparent.

To have a general overview of how this cycle operates in the healthcare industry and what are the six stages of the revenue cycle, let’s explore the stages that are common in every service.

What Are The Six Stages Of The Revenue Cycle?

1. Pre-Registration

Pre-registration is the initial stage in the revenue cycle in which demographic information of patients, like the name, contact, address, medical history, and insurance coverage, are obtained. As accurate data is highly critical in the smooth cycling of revenue, this stage greatly supports this notion and helps prepare for the patient’s arrival. Verification of insurance is also done, which is significant before scheduling appointments, involving confirmation of whether the given insurance policy covers the services required by the patient or not. If required by the insurance plan, pre-authorization is obtained for specific procedures or services. This step smoothens the registration process of patients by offering up-to-date and accurate data before they make a visit.

2. Registration

Upon the patient’s arrival, registration is done by recording further personal, medical, and insurance information. In this set of information, social security numbers, birth details, family details, insurance company’s name, policy number, and group number are gathered.

Additionally, the patient’s medical history, current medications, allergies, and any relevant information that could impact their treatment are also captured. Consent forms are also provided to document the agreement of the patient for the treatment being provided and the utilization of their medical information. After registration, a unique identifier like a medical record number is offered to the patient to help them track their financial and clinical interactions in real-time.

3. Charge Capture

In the charge capture stage, medical services which are provided to the patient are recorded accurately and then transformed into medical codes for the preparation of claim submission. It involves meticulous and detailed documentation of all medication, procedures, and supplies which have been associated with the treatment in any way by the staff and professionals. The information obtained in this step is then used to prepare bills; hence high accuracy must be maintained here for exact reimbursements. Generally, coding systems that are used to code here are Current Procedural Terminology (CPT) and Healthcare Common Procedure Coding System (HCPCS) code systems.

4. Claim Submission

Medical codes and information gathered in charge capture are now utilized to prepare claim forms. In this preparation, patients’ demographics, diagnoses, and procedural codes are inputted. They can either be generated electronically or through printed forms and then submitted to the insurance company, the government in the case of Medicaid, and to the patient if the entire coverage is being carried out by the patient.

In claim submission documents, standard formatting and coding, as per the payer’s requirement, is followed to avoid denial or rejection.

5. Claim Adjudication

Once the claim is submitted, it goes through several procedures to confirm its eligibility and exact reimbursement amount. These processes may include verification of patient eligibility, validation of coding accuracy, review of medical necessity, and calculation of payment amounts based on contracted rates or fee schedules. Claim adjudication results in either denial or acceptance; if it is denial, then the payer denies paying and provides the reasons for it. The errors pointed out by the payer are then settled by the healthcare service to validate the claim.

6. Payment Processing and Collection

After denial management or claim acceptance, the payment received from the payer is then recorded and posted to the patient’s account, representing the payment collection for the services covered. This last stage helps reconcile the payment received with the exact reimbursement amount derived from the adjudication process. It helps to determine the amount which is still due and also assists in managing account receivable, including tracking outstanding balances, following up on unpaid claims or patient balances, and initiating collection efforts by sending statements, contacting patients for payment, or working with collection agencies to recover the unpaid amounts.

CONCLUDING STATEMENT

These comprehensively defined stages sufficiently cater to the query of what are the six stages of the revenue cycle for any healthcare service and also cover all eminent aspects of the appropriate revenue generation cycle of any practice. Though there are some additional elements and alterations in the processes when it comes to medical services of varying scopes, these major facets remain the same, offering commendable management of the returns.

Hence, get your revenue cycle updated and administered with the latest technologies and witness a seamless and thriving market presence!