Manage your revenue cycle well and watch your business bloom.
Due to strains on HME and pharmacy providers and their employees, the healthcare sector is at difficult crossroads. As it currently stands, many businesses are understaffed and their employees feel overworked. This leads to lower efficiency, decreased revenue, and long-term instability. So, what’s the solution? While there’s no easy fix to such a complex problem, the first step is a review of your revenue cycle management (RCM).
This begs the question: What is revenue cycle management? What changes can you make to improve it? Finally, how will improving your revenue cycle management affect your bottom line?
We will answer all of these questions and more. First, let’s look at the process of revenue cycle management and what that involves.
What is Revenue Cycle Management?
The revenue cycle refers to all front- and back-office processes for managing new HME and infusion pharmacy orders. First, a new order comes in from a physician, hospital, or another referring source. Then, your staff reviews the order, as well as the patient’s coverage, health records, and eligibility. If all of the necessary conditions are met, your staff fills the order and sends it to the back office.
This is when the revenue cycle becomes more complex.
The Back-office Process
Once your front office fills an order, a multilayered process of checks and balances takes place.
Here is an overview of the revenue cycle process once an order reaches the back office:
- Order Confirmation: This step involves a quality assurance check to ensure that the claim can be sent to Accounts Receivable (A/R).
- Hold Management: During this step, the claim has been generated by A/R, but has not yet been billed. Holds occur for a variety of reasons, but they all work to confirm that a claim is genuine and is ready to be authorized.
- Claims Transmissions: These transmissions include incoming and outgoing claims or invoices to and from the provider’s payers. Efficient management solutions are key to ensure that transmissions are processed quickly and without error.
- Front-end Rejections: A front-end rejection occurs when a payer or clearinghouse rejects a claim immediately. These rejections often happen due to minor errors, but can lead to significant backlogs. Workforce optimization and team management are needed to avoid this issue.
- Cash Posting: Cash posting is the process of applying payments, adjustments, or denials to line items in A/R. A dedicated team is usually required to manage this step of the revenue cycle.
- Denial Management: Denials occur when the system rejects a claim for not meeting one or more of the payer’s requirements. Ideally, you should process denials in one-to-two business days.
- A/R Management: When there are existing A/R balances, you need a team and process to follow up. Typically, “unstatused” balances received no denials, but have not yet been billed.
- Special Processes – Though all of the steps and processes above account for a “standard” revenue cycle, they do not cover every situation. There are special circumstances that call for unique processes. For example, Reasonable Useful Lifetime (RUL) caps on DME, among others.
Why Does Revenue Cycle Management Matter?
The revenue cycle is the foundation of HME and pharmacy businesses. Without proper revenue cycle management, orders go unfilled, paperwork gets lost in transmission, backlogs will grow, and revenue will drop. All of these issues hurt an industry that already suffers from staffing issues and long hours.
Fortunately, Prochant has been helping HME and pharmacy providers refine and improve their revenue cycle management for over 20 years. Prochant has the knowledge and expertise to evaluate your revenue cycle processes, your business software, and your budget to find areas for improvement. This way, your business can operate at its full potential.
If you’d like to learn more about revenue cycle management or discover more tips to improve your business, contact our experts today.
Prochant is the leading reimbursement firm with a dedicated focus on HME and pharmacy. We have a proven track record of helping HME and pharmacy providers meet their financial goals. Our scalable solutions, years of experience, and advanced technology provide best-in-class results to the healthcare community. Headquartered in Charlotte, North Carolina, our client base includes national HME and pharmacy providers and health systems.