If you're new to the medical billing world, you may wonder what a Revenue Cycle Management (RCM) team does. Understanding what a Revenue Cycle Management (RCM) team does can be overwhelming. And rightly so! RCM is a critical part of the medical billing process.

To begin with, RCM refers to the process of managing the financial aspects of a patient's healthcare journey, from scheduling an appointment to receiving payment from insurance companies or patients.

A revenue cycle management team is responsible for handling this process and making sure that healthcare practices receive the correct reimbursement for their services and that patients are billed accurately.

We know there is a lot to take in. But don't worry! We're here to help. This blog post will explain what a revenue cycle management team does and how they can help you with your medical billing needs. But first, what exactly is RCM, and why do we need a revenue team?

Key Takeaways

• RCM includes everything from patient registration and scheduling to claims processing and collections.
• The RCM department ensures that healthcare practices receive full reimbursement for the services they provide to their patients.
• RCM is a team effort between the front desk, the provider, and the RCM experts. Each plays a critical role in achieving accurate and timely reimbursement.

What is Revenue Cycle Management (RCM) and Why Do We Need an RCM Team?

Revenue Cycle Management (RCM) is the process of managing the financial operations of a healthcare practice. This includes everything from patient registration and scheduling to claims processing and collections.

For instance, one of our clients, CareMed (a multilocation practice in New York), was facing serious high claim denial rates, slow reimbursements, and extended AR cycles. Aging AR climbed above $410,000, which affected cash flow and created visibility gaps for administrators.

By working closely with our revenue cycle management team, CareMed observed a drastic drop in pending AR from $410,000 to $230,000. The claim denial rate dropped by 91%, and the clean claims rate climbed to 98% within three months.

A reliable RCM team with an advanced RCM tech can deliver similar impactful results for medical practices stuck with hundreds and thousands of pending ARs.

What are Medical Billing Services?

Medical billing services can be broken down into a few key components, and a revenue cycle management team is responsible for the "revenue cycle." The revenue cycle collects data from different systems and integrates it into a single RCM system connected to payers.

The revenue cycle includes everything from when a patient first schedules an appointment to when the last insurance payment is received.

In order to understand what a revenue cycle management team does, it's important to understand the medical billing process as a whole. Here's a quick overview:

• A patient schedules an appointment with a provider
• The provider sees the patient and provides care
• The provider documents the care in the medical record
• The provider submits a claim to the payer (insurance company)
• The payer processes the claim and determines the amount they will reimburse the provider
• The payer releases a payment to the provider
• The provider applies the payment to the patient's account
• Any remaining balance is billed to the patient

As you can see, there are a lot of steps involved in the medical billing process. And that's where a revenue cycle department comes in.

So, What Do Revenue Cycle Management Teams Do?

Before we jump into what a revenue cycle management team does, it's important to understand who makes up the RCM team. RCM isn't just about the process; it's also about the humans behind the process.

RCM really is a team effort between the front desk, the provider, and the RCM experts. Each plays a critical role in achieving accurate and timely reimbursement.

We know that RCM teams are responsible for optimizing the revenue cycle, but what does that mean in terms of day-to-day tasks and who's responsible for what? Here’s a clear breakdown!

Task #1: Manage Patient Registration and Scheduling

When it comes to patient registration, it's crucial for RCM teams to make sure that all of the necessary information is collected upfront. Because a minor mistake in demographic information or incomplete insurance details can impact the RCM workflow and influence the practice's overall financial performance.

How Does The RCM Team Manage Patient Registration?

One of the first things a revenue cycle management team will do is manage patient registration and scheduling in collaboration with the front-desk staff. This includes tasks like:

• Verifying patient insurance coverage
• Collecting copayments
• Collecting crucial information, like insurance details

Task #2: Charge Capture

Charge capture is another critical function of the RCM team. It involves ensuring that all medical services provided to patients are accurately recorded and billed to insurance companies.

Imagine you were unable to capture charges accurately, and now a minor mistake has led to lost revenue and compliance issues. In such a situation, charge capture, after a thorough understanding of billing codes, comes into play.

How Does the RCM Team Capture Charges?

Revenue cycle management teams work closely with healthcare providers to capture charges in a timely and accurate manner. This process involves:

• Reviewing medical documentation
• Identifying billable services
• Assigning relevant codes to the provided services.

Task #3: Submit Claims to Payers

Claims management is a core responsibility of the RCM team. This function involves managing the submission, tracking, and processing of insurance claims, ensuring that healthcare providers receive timely reimbursement for their services.

Claims are like invoices. They detail the services that were provided and the cost of those services. Once a provider has seen a patient and documented the care, it's up to the Revenue cycle management team to submit those claims to payers.

How Does the RCM Team Handle Claim Submissions?

Once an encounter is closed, the RCM team creates and submits claims to the payers. The revenue cycle department works closely with insurance companies to track the status of claims, identify any issues or errors, and resolve them quickly.

They also ensure that claims are submitted in a timely manner to avoid delays in reimbursement. Effective claims management through healthcare revenue management is critical to the financial health of medical practices, as it directly impacts their revenue streams.

This process can be time-consuming, as each claim must be reviewed for accuracy and completeness before it is submitted. But it's essential to make sure that claims are submitted correctly, as errors can result in delayed or denied payments. Nobody wants that!

Task #4: Accounts Receivable Management

Accounts receivable management is another critical function of the RCM team. It involves managing outstanding patient and payer balances and working to collect payments from both the payers and the patients.

How Does the RCM Team Manage Accounts Receivable?

Revenue cycle management teams follow up with patients and payers to resolve any issues related to outstanding balances. They also handle any billing disputes or discrepancies related to patient accounts.

Effective accounts receivable management helps healthcare organizations improve their cash flow and reduce their bad debt.

Task #5: Insurance and Eligibility Verification

A crucial function of the revenue cycle management team is to verify the insurance and benefits coverage of patients. This step is essential to ensure that healthcare providers receive full healthcare reimbursement for the medical services they provide.

How Does the RCM Team Verify Insurance and Eligibility?

RCM teams meticulously review patients' insurance policies to determine their deductibles, copayments, and coinsurance amounts. By doing so, they can provide healthcare providers with accurate information about patients' insurance coverage.

This helps the medical practice revenue optimization team determine which services are covered and which ones are not. Accurate insurance verification as a part of healthcare revenue management helps medical practices avoid denied claims, billing errors, and compliance issues.

Task #6: Review and Appeal Denied Claims

Unfortunately, even with the best efforts, claims can sometimes be denied. When this happens, it's up to the RCM team to review the denied claim to see why it was denied and then take the necessary steps to appeal the decision. This process is called claim denial management.

How Does the RCM Team Handle Claim Denials?

The RCM team can make an appeal against the denied claims. The appeals process can be complex, so it's important to have a team of experienced professionals on your side. Revenue cycle management teams will know exactly what to do to get your claims approved and get you the healthcare reimbursement your practice rightfully owes.

Denial management is a complex process that requires expertise in medical billing, insurance policies, and regulations. RCM teams analyze the reasons for claim denials and develop strategies to avoid future denials. By doing so, they help healthcare providers reduce their financial losses and improve their revenue streams.

Task #7: Follow Up On Unpaid Claims

Even when claims are paid, there can be a delay between when the services were provided and when the provider actually receives payment. This is called Accounts Receivable (AR), and it's something that all providers have to deal with.

How Does the RCM Team Follow Up on Unpaid Claims?

When claim payments are delayed, it's up to the RCM team to follow up with payers to find out why the payment is being delayed and take the necessary steps to get the provider paid. This might involve submitting additional documentation or even appealing a claim denial.

Task #8: Process Payments and Apply Them to Patient Accounts

As a practice owner, you can't just leave money sitting in your account. You need to make sure it gets applied to the patient's balance so that they don't end up owing you money. That's why this is such an important task for RCM teams.

How Do RCM Teams Process Payments?

Once a provider has been paid, it's up to the RCM team to process the payment and apply it to the patient's account. This includes tasks like posting payments, issuing refunds, and updating patient balances.

Task #9: Bill Patients For Any Outstanding Balance

After a provider has been paid against the submitted claims, there might still be some balance remaining on the patient's account. This is called a patient balance, and it's the responsibility of the RCM team to bill patients for any remaining balance.

How Do RCM Teams Bill Patients For Outstanding Balances?

The RCM teams bill patients for outstanding balances by:

1. Ensuring accurate post‑insurance billing by capturing all remaining patient responsibility immediately after claims are processed.
2. Communicating the patient's portion clearly and promptly reduces confusion and increases the likelihood of payment.
3. Offering flexible payment options and deposit collection at the point of service to minimize outstanding balances.
4. Monitoring patient‑balance collection metrics (e.g., patient responsibility as % of revenue, collection rate) to identify and improve gaps.

This can be a tricky task, as you don't want to overcharge patients or end up in collections. But as long as you work with experienced RCM professionals, they'll know exactly how to handle patient billing to ensure everyone is happy.

Task #10: Financial Reporting

In addition to reducing AR, RCM teams generate financial reports that provide insights into the financial health of healthcare organizations. These reports include information on revenue streams, expenses, and profitability.

What Are Some Key Insights You Can Gain From These Reports?

By analyzing these reports, healthcare providers can:

• Make informed decisions about their operations
• Identify areas for cost savings
• Increase revenue
• Improve efficiency

Financial reporting is a critical function of the RCM team, as it provides healthcare providers with the information they need to run their organizations effectively. Modern EHRs, like Practice EHR, now help RCM teams with accurate financial reporting through intuitive dashboards and centralized data.

Practice EHR - The All-in-one EHR Platform RCM Teams Love!

By taking care of all these tasks related to medical billing, an RCM team keeps a practice healthy on the financial side. It ensures that healthcare providers receive timely and accurate reimbursement for the services they provide.

Optimal RCM in healthcare practices not only helps providers but also patients. When practices and providers are paid on time, they tend to deliver more efficient and effective healthcare services to their patients.

If you're looking for a medical billing partner that can handle all of these tasks for you, look no further than Practice EHR. Equipped with advanced RCM tools, we have a team of experienced RCM professionals who will take care of everything for you so that you can focus on running your practice.

Request a free demo today to get your questions about our medical billing solutions answered and see Practice EHR in action. It’s quick, easy, and fun!