Although it might sound cliche, you cannot deny the fact that, even in the hospital setting, how much control you have over your different revenue drivers can have an impact on how financially stable your company will be. This is often why companies of all shapes and sizes typically have a revenue cycle management program in place.
Revenue Cycle in A Hospital Setting
There are 3 major areas that can be considered as revenue drivers in a hospital – the front-end, which involves the scheduling of appointments and verification of insurance coverage; the administrative part, which typically includes the encoding of the patient information including any insurance coverage or healthcare benefit eligibility; and, back-office processes, which would include posting of payment, generation of invoices, and management of claims.
Aside from the three major areas, revenue cycles in a hospital setting can also be categorized as internal and external. Under the internal revenue cycle drivers would be the volume of the patient as well as the hospital’s own schedule of fees. On the other hand, one can find under the external drivers such areas as collections and payments from patients as well as claims from government payers.
One of the things that most revenue cycle management companies have to deal with would be insurance claims. In insurance claims, the hospital charges the service provider instead of the patient for the invoice. What makes this complicated though is the fact that any error in the encoding process can make it doubly hard for the hospital to secure payment. Aside from this, if the hospital is unable to screen the eligibility of the patient for a certain coverage, they would have to shoulder the costs instead.