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The reimbursement approach in health care has gone from a simple fee-for-service to a more complex approach called Revenue Cycle Management (Harrington, 2016). A successful RCM involves the revenue cycle manager and management team to develop and implement policies, procedures, performance measures and standards. When services are provided to patients and no payments were received for these services, the facility will not receive cash and employees’ income will be affected.
The hospital would need to review the charge capture to make sure the recording of services, supplies, or items delivered to the patient are correct.
The hospital should also review the charge description master to identify the item used, the charge associated with it, and the code associated with it (Harrington, 2016). There are several parts of the cycle that have responsibility of their own functions.
The overall goal is to submit a clean claim for services rendered at the healthcare facility (Harrington, 2016). An effective model of the RCM is divided into three categories: front-end, middle, and back-end process.
The beginning of the cycle includes: development and implementation of policies and procedures, performance measures, and third-party payer negotiation and management (Harrington, 2016).
During the front-end process the provider can verify the patient demographics and secures the source of payment. The front-end process also identifies any requirements from the insurance company prior to service (Harrington, 2016). During registration at a hospital, the staff is figuring out the deductibles and copayments to provide patients with information about how much they are expected to pay out of pocket.
Patients are informed about options such as Medicare or Medicaid, when they may have limited or no health insurance (Rauscher, Wheeler, & Hilleary, 2008).
The Revenue Cycle During the middle process, hard and soft coding of diagnoses and procedures occur. These procedures and diagnoses are all based on clinical documentation. The focus of the middle process is to balance clinical practice guidelines and to document services completely and accurately (Harrington, 2016). The back-end process conducts the processing of bills, posting of payments, and making any corrections to claims and charge description master if needed. A very essential task in the billing process is claims editing. The task of claim editing is it to find potential errors before they are submitted to payers. This ensures the hospital receives the maximum payment for the services provided. When bills are not paid on time, denial management can help the hospital increase the amount of patient revenue through a claims recovery process. The hospital revenue cycle is complete with the collection and posting of the cash received (Rauscher, Wheeler, & Hilleary, 2008).
When prioritizing the departments at a hospital, the first department is the registration, insurance verification and preauthorization, financial counseling, and contract management process. This front-end process is crucial in letting the patients know their eligibility, coverage, and any benefits they may have (Harrington, 2016). The hospital is required to inform their patients on their responsibilities using financial counselors about payment options. During the front-end process the staff is responsible for obtaining demographics that will support the care provided and the billing process. This step ensures the revenue cycle runs smoothly without delays. This will help guarantee a method of debt resolution for services provided. Next, is the department managing the charge capture and making sure there is consistency in recording services and supplies or items delivered to a patient. The charge capture is important to the success of a hospital. The charge capture may be managed by individual departments, but this process impacts the entire facility and consistency is key because if all of the departments are not following policy then it will skew numbers and create errors (Harrington, 2016).
The Clinical Documentation Improvement (CDI) program to assure the health record accurately reflects the condition of the patient (Harrington, 2016). The coders in Health Information Management (HIM) department perform “Soft Coding.” During “Soft Coding,” the coder reviews the chart for documentation and designates the correct coding for the bill (Harrington, 2016). The process of “Hard Code” that uses the charge description master to identify the item, the charge, and code associated. Other departments apart of this process could be: nursing, radiology, and physical therapy.
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