How to Reduce Denials and Improve Revenue with Effective Cycle Management

Healthcare organisations are continually faced with the challenge of managing their revenue cycle. The process involves everything from patient registration and appointment scheduling to final payment of a balance. However, one crucial aspect that often impedes the smooth flow of this cycle is the high rate of claim denials. Reducing these denials and improving revenue is essential for the financial health of any healthcare organization. One effective strategy is effective cycle management, which can be further enhanced by deciding to outsource RCM.

Understanding Denials

Claim denials occur when an insurer refuses to pay for the healthcare services provided. These denials can be a significant source of revenue loss for healthcare providers. Therefore, understanding and addressing the root causes of these denials is crucial. Often, these denials occur due to coding errors, missing information, or lack of medical necessity.

Effective Revenue Cycle Management (RCM)

Effective Revenue Cycle Management (RCM) is a crucial component of a healthcare organization’s financial success. It involves managing the administrative and clinical functions related to claims processing, payment, and revenue generation. Effective RCM can help reduce denials by ensuring accurate patient registration, insurance verification, and proper coding and billing.

Steps to Reduce Denials

Patient Registration: The first step in the revenue cycle involves collecting accurate patient information. Any inaccuracies in this step can lead to claim denials.

Insurance Verification: Verifying a patient’s insurance coverage can help avoid denials due to lack of coverage or out-of services.

Coding and Billing: Accurate and up-to-date coding is essential to avoid denials. Regular training for coders and billers can help ensure this accuracy.

Claim Submission: Regular audits of claims before submission can help identify and correct any errors, reducing denials.

Payment Posting: Accurate posting of payments to the correct patient account is crucial to avoid confusion and denials.

Denial Management: Regularly analyzing denial patterns can help identify areas of improvement in the revenue cycle.

Outsource RCM: A Strategic Move

Opting to outsource RCM can be a strategic move for healthcare organizations looking to reduce denials and improve revenue. By outsourcing, healthcare providers can leverage the expertise of specialized RCM companies. These companies have skilled professionals who are adept at handling complex revenue cycle processes, including denial management.

Outsourcing RCM can also provide other benefits such as cost savings, access to advanced technology, and reduced administrative burden. This allows healthcare providers to focus on their core services – patient care.

Conclusion

Reducing denials and improving revenue is crucial for the financial health of healthcare organizations. Effective cycle management, coupled with the decision to outsource RCM, can be a strategic move towards achieving this goal. It ensures efficient and accurate handling of the revenue cycle, leading to reduced denials and improved revenue.