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Healthcare Revenue Cycle

Management (RCM) Important
Approach That Hospitals
Should Follow
By Ahmed Ezz Eldin May 25, 2021 # 66 " 0

In fact, many parties have realized how important and

profitable to invest in the healthcare sector earlier, I am
talking here about countries and healthcare authorities in
the Middle East that have already started to take some
serious steps to develop their Healthcare system, such as
adopting new management methodology like total quality
management TQM, revenue cycle management RCM, etc.

United Arab Emirates was the first mover, it spent billions of

dollars and huge investments in medical education, and
medical training for personnel and equipping healthcare
facilities with the latest technologies, and today it has
already come a long way.

Here we would come to some common questions!

How many patients pay for their healthcare services

in cash? And who is not covered by at least one
health insurance nowadays?

We live in the health insurance coverage era, many health

insurance companies start their business in the Egyptian
market every year, approaching multiple marketing
strategies and providing many health insurance package’s ”
Individual package, family packages, firms’ packages, etc.”.
This is in addition to the Egyptian governmental health
insurance parties which is living great develop recently
from the government, represented in Comprehensive
Health Insurance Law issuance in 2018, specialized
authority in accreditation, monitoring and regulating the
quality of medical services provision ” General Authority for
Healthcare Accreditation and Regulation (GAHAR), that’s
why claims become the most generally accepted payment
method between providers and insurance companies.

“IF YOU ARE BRINGING IN A CERTAIN AMOUNT

 OF REVENUE, YOU CAN’T HAVE EXPENSES THAT
EXCEED THAT REVENUE. IT SEEMS VERY BASIC,
BUT PEOPLE DON’T LOOK AT IT THAT WAY.”

GARY MARLOW, VICE PRESIDENT OF FINANCE FOR BEVERLY HOSPITAL

So, What is the Insurance Claim?

The insurance claim is a formal request from the hospital to
the insurance company that asks for a payment of services
given to a patient based on a former contract between the
hospital and the insurance company.

The insurance company would review the claim of the

hospital to validate its items then it pays out the requested
amount of money to the hospital after approval.

What is the Revenue Cycle

Management (RCM) for Healthcare
facilities?
Sybridmd.com

Healthcare revenue cycle management is a financial

process, hospitals use it to manage their operational,
financial even administrative issues associated with claims
processing, payment, and revenue generation, which
contains identification, management, and collection of
healthcare service revenues.

On the other hand, medical coding as an example is one of

the main pillars of revenue cycle management (RCM)
systems, it is the process of translation to all medical
documentation, patient records, medical history, etc. to a
widely acceptable and recognized code, and we will talk
about medical coding in some deep details in the upcoming
articles.

In this article, we will discuss the basics of healthcare

revenue cycle management (RCM) and how it impacts the
healthcare industry.

Healthcare revenue cycle management (RCM) begins when

a patient schedules his appointment for a medical service
and ends when all claims and patient payments have been
collected. However, the patient’s lifecycle is not as
straightforward as it looks like.

Registration and Booking Appointment for

Patient
As we mentioned, the first step in the RCM system is
registering patient data in the practice management
system and booking an appointment either through the call
centers, online, or individually.

Administration sta! must handle the following processes:

Patient appointment scheduling.

Insurance eligibility verification.

Patient account establishment.

Collection of any Due Co-Payments from the

Patient
After that, the healthcare facility should calculate any
amount of money to be collected from the patient, this
amount is variable and may di!er from a patient to another
according to the insurance contract between the insurance
company and the healthcare facility.

Co-Payments could be as a percentage of the service price,

or a specified value written in a published Co-Payments list
for each insurance company.

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Patient Visit Documentation

Then, patient visits his physician’s o"ce for a medical

investigation, that must be scientifically and fully
documented, as it is as important as the medical advice
itself, because it is going to be archived in patient medical
records which has an impact on the quality of patient care.

Medical Coding
One of the most important stages in RCM system, when the
“Medical coder” translate all patient’s medical documents
such as diagnoses, procedures, medical tests etc. into
some organized and acceptable codes which designed
according to certain policies and rules.

Costing and Pricing

Generally, you cannot provide any healthcare service to a
patient without accurate calculation of your costs, profit
margin, selling prices. even if you are not seeking a profit
like charity hospitals. simply, it is your guarantee to
continuity.

So, you have to calculate all your costs then determine

which pricing strategy you should take? and why? – if you
want to know more about the importance of pricing and
di!erent pricing strategies kindly review our articles
“Healthcare
Healthcare Services Pricing in the Egyptian
Healthcare System – 6 Powerful Pricing Strategies
Used in Healthcare
Healthcare””

Now, after the Medical coder finished his job, you should
record all services prices that your patient has. here we can
tell that our claim is established and ready to send to the
insurance company after the medical and financial revision.

Claim Submission
At this level, your claim is ready to send to the party that
will pay, whether it is a private or governmental insurance
company or any other party.

Accounts Receivable Management

Finally, the financial accounts receivable team’s role comes
in following up the hospital’s dues with insurance
companies, receiving financial dues, submitting financial
reports, and following up on rejected claims.

And now after we had a quick review on hospital RCM

systems, we have to say that it not always this simple, you
must know that insurance companies will examine the
claim, medical procedures, prices and in many times will
deny the claim and return it to the hospital.

Hospital claims denial rate has increased since 2016, But

the recent COVID-19 pandemic has accelerated that
upward trajectory, pushing the denial rate up to 23 % in
2020 compared to the last 4 years, according to Revcycle
Intelligence
Intelligence.

Best practices have taught us that most of these claim

denials are potentially avoidable, but hospitals must
develop some Strategies to minimize claims denials such as
sta! training, RCM system automation, do some analysis for
the most common reasons for claim denials.

Overall, report says that 86% of claims denials were

potentially avoidable by hospital sta!, artificial intelligence
also can make a huge di!erence to healthcare
organizations and RCM systems

Those manual processes like patient access, coding, billing,

collections, and denials can be easier if it has been
automated using artificial intelligence (AI).

The Conclusion
Finally, we have to say that revenue cycle management in
healthcare is not just some sections or employees, it’s
much bigger, it’s a whole system that a!ects your patient
satisfaction, in cash flows, accounts receivable, financial
statements, and shareholders.

So, if you manage this system e"ciently, handle its errors,

you will guarantee that your business will continue to grow
safely.

If you liked this article, please don’t forget to share your

thoughts and best with HBC in the comments and let us
know your opinion about the revenue cycle management
(RCM) for healthcare facilities and its importance for
organization’s growth. If you have valuable content to share
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