Medical Billing vs. Revenue Cycle Management
Updated: Oct 11
Knowing the difference between these two makes a tremendous difference in how you run your practice. You may be saying to yourself “there is really no difference between medical billing and revenue cycle,” BUT there is, billing is only a half of the RCM process.
Although, RCM includes medical billing components there is still more beyond this process.
Medical billing is the "backbone" of revenue cycle management. It is the process in which healthcare claims are generated and submitted to insurance companies. The process involves many components in order to be effective. These components include:
Patient Registration
Financial Responsibility
Claims Creation
Claims Generation
Claims Submission
Monitoring of Claim Adjudication
Patient Statement Release
Follow-Ups
RCM is the financial process use by healthcare facilities to manage the administrative and clinical functions associated with claims process, payments, and revenue generation. RCM allows healthcare facilities to analyze, track, and successfully manage their account receivables.
The process starts the moment a patient calls to schedule an appointment to the finalization of their account.
A strong RCM system will allow your practice to function efficiently. Reports tell how your practice is doing on a daily, weekly, monthly, quarterly, or annual basis. These reports may include:
Daily cash flow reports
Weekly collections
Monthly, quarterly, or annual reports on your practice financial health
Factors that Will Affect Revenue
Patient Volume The total amount of patients coming to your practice or a change in volume with different payer mixes affects your revenue. Look at the chart below.
Staff delays and errors This may include errors in data entry. Insufficient or inefficient staff creating backlogs or poor job performance. Some examples include:
Patient demographic information is to be verified for EVERY patient for EVERY visit. Often times when a patient comes to a practice on a regular basis, staff members will assume that there have been any changes to the patient’s demographic and insurance information. ALWAYS verify patient’s demographic and insurance information for coordination of benefits, benefit maximums reached, and ensure demographics matches what the insurance carrier’s database, e.g. Jr., Sr., II, III, middle initial and correct spelling of the patient’s name.
Another factor, to this type of error is pre-authorizations not being obtained for certain services being provided to the patient.
Timely filing is the most difficult error to be appealed with the insurance carriers. The easiest way to prevent these errors from occurring is to ensure each payer timely filing guideline is noted for everyone doing the billing. Make it a rule to have claims submitted everyday if not every week.
Incomplete documentation from clinical staff. BE careful of inadvertent upcoding and under coding. Both actions are illegal and can result in criminal prosecution and fines. Upcoding occurs when codes are entered for services that were not rendered for a patient, often to increase the amount owed to a provider. Down coding occurs when codes are left off a patient’s bill often for the purposes of avoiding an audit. Is this done deliberately or accidently, you ask? Inexperience billers and coders can make this mistake, when overwhelmed with work or have not kept up with the recent changes.
Appeals deadline not met. Most insurance carriers allow 45-60 to file an appeal on a denied claim. Not working your account receivables report in a timely manner, will result in NON-Payment for services rendered.
Inappropriate write-off by staff that are denied as a contractual adjustment or as an administrative adjustment, this will cause potential payments to be missed.
Coding and Billing The constant change to coding rules and guidelines due to healthcare regulation modifications on newly discoveries illnesses and newfound treatments are easy to slip through your fingers if no one is responsible for keeping up with such changes.
In addition, providers are not documenting thoroughly enough, which results in improper coded claims and may not close their encounters in time to allow charges to be billed. Another instance is when a provider selects a level of service as the patient leaves the office and wait until the end of the day to dictate or document that services. This can create a discrepancy in the services billed and the services documented. If audited, this can create a loss in revenue.
Duplicate billing is also always a factor for insurance carriers to deny a claim. Ensure your staff is paying close attention to detail especially, if there is more than one individual submitting your claims.
Insurance Delays Credentialing and re-credentialing issues, insurance company errors or delays in insurance payments are all examples of what can cause delays. As soon as a practice decides to bring on a new provider, the credentialing process should begin.
Contact info@md-prac.com or call 833.245.5633 to discuss how to improve your medical practice billing, collections and credentialing.
Visit us online at www.mdpracbillingsolutions.com