Revenue Cycle Management Automation in Healthcare — Everything You Need to Know

Healthcare is, and should always be, primarily about health. But the inescapable truth is that all medical services cost money.

This obvious fact has led to the developing of a robust IT infrastructure that manages the healthcare revenue cycle, from handling insurance claims to collecting payments. The whole process is a sequence of numerous tightly interdependent steps. Its complexity leaves room for optimization and very little room for error.

Smooth Revenue Cycle Management (RCM) is critical for effective healthcare and reducing revenue leakage, but surprisingly few industry leaders perceive its importance. For example, a 2020 report showed that 87% of providers still used manual and paper-based processes for collections. The consequences? 78% claimed they failed to collect payments over $1000 within 30 days. Add fluctuations in healthcare spending, and you have a recipe for an unstable and inefficient system from the perspective of patients and providers alike.

Even though the pandemic has undoubtedly increased the level of digitization in healthcare organizations, many still rely on manual revenue management operations. Luckily, solutions exist that can be easily adopted and don’t require a massive investment in complex IT infrastructure setup or maintenance. This article will explore some of them, discussing RCM systems for medical services and suggesting how your medical organization can benefit from Revenue Cycle Management automation.

Learn more about using Robotic Process Automation in other industries, like RPA in insurance, RPA in logistics, or automation for consultancy.

Revenue cycle management refers to all the administrative tasks devoted to financial transactions between patients and their providers and how they are handled. The key processes in RCM are:

Pre-authorization — the process starts when a patient makes an appointment. To set up a patient account, the provider must gather and register all the necessary data, such as personal info and medical records, and assess the patient’s insurance eligibility.

Medical coding — next, medical data like test results, diagnoses, or procedures are translated into a unified code. This standardized system facilitates communication between physicians, office staff, insurance companies, and various healthcare providers involved in the treatment.

Claims submission — a coded record of the patient’s treatment is submitted to their insurer, who then reviews and approves or denies the claim.

Payment collection — if the insurer reviews the claim positively, the provider receives reimbursement. The amount depends on the patient’s eligibility, as insurance doesn’t always cover the amount due. If so, the provider must follow up with the patient and collect the rest of the payment.

Service review and reporting — once the payment is complete, the data used in the revenue cycle and clinical treatment is analyzed. This process ensures insight into possible issues and methods of overcoming them to streamline the entire process.

At this stage, it’s important to note that even though the term revenue cycle management is often used interchangeably with medical billing, the two aren’t synonymous.

RCM encompasses all the processes mentioned above, while medical billing refers only to those concerned directly with claims, i.e., coding, submission, and payment collection. In that view, RCM is a broader, end-to-end workflow that includes billing as an important part.

The revenue cycle is affected by many unpredictable, shifting factors that can be internal or external. These moving parts often complicate revenue cycle management, making many cases wholly unique.

Revenue Cycle Management software aims to digitize and replace paper-based procedures and documentation in the revenue cycle workflows. Think of it as the EHR of medical billing and claim management.

According to a 2021 forecast, the Revenue Cycle Management software industry is expected to grow by 10% annually through 2021 and 2025. This and other research prove that the demand for RCM solutions is rising. And for a good reason.

Revenue Cycle Management systems assist the back-office staff in many essential tasks within the revenue cycle management, such as:

• checking eligibility,
• claim correction and tracking,
• KPI reporting,
• data entry,
• medical coding,
• denial management and alerts,
• contacting patients and insurers,
• cost estimation.

… and more. They achieve all that by leveraging innovative technologies — including Revenue Cycle Management automation.

Many RCM processes—medical billing in particular—can be optimized with the help of intelligent software. What’s more, algorithms can entirely take over the execution of some simpler tasks. Here are the most popular solutions used for revenue cycle management automation.