What is Healthcare Revenue Cycle? - Definition & Steps

Instructor: Tammy Galloway

Tammy teaches business courses at the post-secondary and secondary level and has a master's of business administration in finance.

In this lesson, we'll define the healthcare revenue cycle. You'll also learn about the three main steps in the cycle: patient scheduling, registration and treatment, claims processing and payment collection.

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.

Healthcare Revenue Cycle

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.

Claims Processing

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.

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