Tammy teaches business courses at the post-secondary and secondary level and has a master's of business administration in finance.
The Healthcare Revenue Cycle
Jamie, the office manager for Dr. Harris, is training a new employee, Lauren on the healthcare revenue cycle (HRC). The healthcare revenue cycle is a process whereby revenues are generated from services rendered to patients. In this lesson, Lauren will learn about the three main functions in the HRC cycle: patient scheduling, registration and treatment, claims processing and payment collection.
Patient Scheduling, Registration and Treatment
Jamie starts by explaining that the healthcare revenue cycle starts when a patient calls to schedule an appointment. At that point, we gather their insurance information, then call the insurance company to verify benefits. Lauren asks, 'What if the patient does not have insurance, do we turn them away?' Jamie states that the office accepts self-pay patients also. These steps, also called pre-registration, are paramount in establishing the patient's account, confirming accurate information before the appointment and ensuring the patient has sufficient financial wherewithal through insurance or self-payment.
On the day of the appointment, we ask the patient to complete paperwork where we gather more information about their health, insurance, employment and financial capacity. We also require each patient to sign a financial responsibility agreement which outlines their responsibility for payments not covered by the insurance company.
Once they're seen by the doctor and before expensive services are rendered, we discuss the fees with each patient to ensure their understanding of the costs involved. Additionally, we require them to sign a treatment and fee plan as legal documentation. Now, let's explore the claims processing step.
After services are rendered, coding each service correctly is paramount in the healthcare revenue cycle. Jamie shows Lauren how to code, then describes the revenue piece. The codes identify how much the office will be reimbursed for services. Once completed, the office submits the claim to the insurance company or governmental agency. Inaccurate codes result in claim denials, delaying reimbursement even further. If this occurs, Lauren must reconfirm the treatment, identify the accurate codes and resubmit to the appropriate agency.
Accurately submitted claims receive reimbursement and Lauren will post those payments and reconcile discrepancies. Even if everything goes according to plan, reimbursement can take months. Jamie explains that sometimes the insurance company does not reimburse for the total amount of services rendered and the patient is responsible for the balance or the patient is 100% self-pay. In this instance, Lauren must create a billing statement and mail it to the patient. Most patients submit payments timely. However, for accounts severely past due, the office must start collection procedures. While most of these patients usually are experiencing a hardship, the office must make every effort to collect payment to remain viable. Jamie explains that the office currently handles collections by simply calling the patients and mailing statements. However, Dr. Harris is considering hiring a collection management company to increase revenues on old accounts. Afterwards, Jamie asks Lauren if she took good notes because a new patient is on the phone to schedule an appointment.
The healthcare revenue cycle is a process whereby revenues are generated from services rendered to patients. Three main steps exist in the healthcare revenue cycle. The patient scheduling, registration and treatment set the revenue cycle in motion. Ensuring accurate insurance and personal information prior to the appointment is paramount. After the patient confirms the treatment plan and fees and receives the necessary services, it's time for the second step in the cycle, claims processing. Claims processing involves accurately coding treatments and submitting to the insurance company. Inaccurate coding results in significant delays. Any outstanding balance due is the patient's responsibility. While many patients settle their balances in a timely manner, other accounts must go through the collections process.
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