In this blog post
In the previous article, we explored what is Healthcare RCM, who are its stakeholders and their roles, the types of payers – Government and Private, and the various activities performed by Front Office and Claims Office in the RCM process. You may read it here: https://www.gavstech.com/healthcare-revenue-cycle-management/
In this article, I will take you through the duties of the Back Office, functional flow of RCM from start to finish, importance of RCM in healthcare and the role of technology in RCM industry.
To reiterate the concept, Revenue cycle management (RCM) is the process followed by healthcare systems all over the world to maintain and track their revenue for the services rendered to patients. It is a major stream of work in the healthcare ecosystem which involves clinical, administrative, and financial functions. These functions enable healthcare providers to capture, manage and collect their patient service revenue.
Back Office
In the whole of the above process, there is a lot of communication and coordination that happens between the patient-provider-payer as back-end activity which includes claims status check, denial analysis, appeals, amount to be settled or refunded to patient, write-offs, and so on.
To visualize the flow:
Why is RCM important?
An efficient RCM system enhances a hospital’s revenue stream. It considerably reduces the time between care services given and payment received. It connects the commercial and clinical aspects of healthcare.
CMS views denials as a crucial non-performance factor on the hospital side. Hence, hospitals must keep their number of denied claims to the utmost minimum. RCM process help hospitals in achieving this.
RCM process help providers to reduce errors in claims processing, improve patient experience, speed up claims submission and bring down reimbursement cycle time. RCM process bridges the gap between service providers and insurance firms, which eventually improves the RCM turnaround.
Denials rose to 11% of all claims last year, up nearly 8% from 2021, according to a recent study. That 11% rate translates into 110,000 unpaid claims for an average-sized health system, according to the report.
Cost of denials saw 67% increase in 2022.
Source: HealthLeaders
Role of technology in RCM Industry
The RCM industry is anticipated to experience substantial changes and growth in the coming years. Technological progress, including artificial intelligence and machine learning, will play a crucial role in automating and streamlining RCM procedures, resulting in decreased administrative expenses and faster revenue cycles. The following technologies will play a crucial role in RCM:
- Blockchain for handling transaction surge, revenue velocity and payment accuracy
- RPA – Robotic Process Automation for bringing in digital workforce to improve efficiency and reducing errors
- Big data and analytics to stop revenue leakage, improving date integration, processing, and management
- AI/ML to alert denial risk, medical coding error detection, claims admin, denial recovery, etc.
Major players in the global RCM market
Some major players in the global RCM market include R1 RCM, Oracle, and Optum. Other prominent players include McKesson Corporation, GE Healthcare, Cognizant, 3M, and Athenahealth.
RCM is a critical process for healthcare organizations to ensure that they are properly reimbursed for the services they provide. Technology is playing an increasingly important role in RCM, with solutions such as blockchain, robotic process automation, and big data analytics helping to automate and streamline RCM processes. Overall, the future of the RCM industry holds immense potential for innovation, efficiency, and improved financial outcomes for healthcare organizations.
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