The revenue cycle is known as the process by which healthcare providers receive reimbursement for care provided. Bringing in revenue is necessary for the efficient operation of any healthcare facility. The revenue cycle consist of all the steps involved in patient care starting from bringing in the patient, meeting their needs, and receiving payments for services provided (Gillikin).
Factors contributing to the complexity of revenue cycle
There are several factors that contribute to the complexity of the revenue cycle. Frequent changes in contracts with payers, legislative mandates, and managed care are just a few examples of reasons why revenue cycle in the healthcare industry is so complex. Furthermore, the problems that arise in the steps of the revenue cycle further complicate the whole process. For example, going through the steps of the revenue cycle efficiently is extremely difficult when it is managed by poorly trained personnel. Furthermore, if a healthcare provider does not have the proper information system to track patient records and billing, receiving reimbursement can become difficult. In addition, one of the main factors that delay payments is denial from the insurance companies. The reason for Denial includes incorrect coding, the certain sequence of care and medical necessity or even delay in submitting claims. Lastly, inefficient patient correspondence can not only hinder the process of revenue cycle but also result in many patient complaints (Wolper, 2004).
Six stages of revenue cycle
The Six stages of the revenue cycle are provision of service, documentation of service, establishing charges, preparing claim/bill, submitting claim, and receiving payment. The first step consist of providing the patients with proper care and prescribing the right medication. The Next step is to properly document the services that were provided. This step is crucial in the healthcare industry because of liability. If every part of the provision of care is accurately documented, everyone involved in the care can be held liable for it and severely punished. Proper documentation includes noting patient’s demographic information, clinical information, and insurance information. In addition, detailed notes about the visit, the tests that were performed or ordered, and the medications that were prescribed have to be recorded. In order to make this step easy and efficient, the healthcare industry has switched to electronic medical records.
The third step of the revenue cycle is preparing claims. There are several ways to prepare claims or billings. In order to accurately prepare claims, all the charges from the services provided must be created. A charge master is known as the list of the firm’s price for each service offered. After the charges have been organized and put in to the proper forms, proper editing needs to be done. During editing process, the forms have to be reviewed to check whether all the necessary information has been...