What are the risks associated with the revenue cycle?
Common risks associated with the revenue cycle include the authorization or accuracy of sales contracts with clients. You must ensure prices are quoted correctly following your sales pricing policy.
Any Revenue Cycle Management process faces many challenges owing to the plenty of finer steps involved. Right from verification, clear check on insurance coverage, medical coding, raising, and tracking claims, denials can be at any stage.
1) Patient Payments
One of the most unavoidable revenue cycle challenges that small practice providers face is the receiving of patient payments. With the rise of high-deductible plans in the US, providers struggle to receive enough from patient payments.
Preregistration. Preregistration is the first and most vital step in the revenue cycle process.
Romney (2015), in his book, stated that revenue cycle is exposed some of the risks, i.e. inaccurate order, invalid order, uncollectible accounts, loss of customers, shipping errors, failure to bill, billing errors, posting errors in accounts receivable, theft of cash and cash flow problems.
Incorrect goods or quantities could be despatched. Goods despatched may not be invoiced. Invoices could be duplicated in the sales journal. Payments received from customers may not be deposited in the bank due to theft or carelessness.
Current revenue cycle management struggles include sustaining and building infrastructures, understaffing, unstable healthcare revenue streams, and few resources necessary to establish new payment models. The increased patient volumes at community health centers have caused a laundry list of problems.
The major challenge facing providers is to organize, interpret, and report information on the results of treatment, both in terms of cost-effectiveness and efficiency, and to be in the position to compare results with other providers and treatments.
Revenue cycle management (RCM) is the financial process, utilizing medical billing software, that healthcare facilities use to track patient care episodes from registration and appointment scheduling to the final payment of a balance.
Revenue collection concerns the sources of funds, contribution structures, and the means by which they are collected, while fund pooling addresses the need to spread the risk of incurring unexpected health care costs over as broad a population group as possible.
How do you explain revenue cycle?
What exactly does the term “revenue cycle” mean? The revenue cycle is defined as all administrative and clinical functions that contribute to the capture, management, and collection of patient service revenue. In the most simplistic and basic terms, this is the entire life of a patient account from creation to payment.
RCM systems can minimize the number of errors, increase the likelihood of payment, and avoid aging accounts receivable. Additionally, it strives to increase claims efficiency while reconciling costs against revenues to optimize cash flow.
- Revenue Cycle Phase 1: Setting Appointments & Capturing Patient Demos.
- Revenue Cycle Phase 2: Capturing Charges & Submitting Claims.
- Revenue Cycle Phase 3: Remittance Posting, Collections & Data Analysis.
- How does your practice optimize the revenue cycle?
The common objectives of these internal controls are to: Ensure that all sales are billed and that all billings are recorded. Control the risks associated with extending credit. Prevent loss or theft of assets, particularly cash or cheques.
The Healthcare Revenue Cycle is defined by the Healthcare Financial Management Association as the set of all administrative and clinical functions that contribute to the capture, management, and collection of patient service revenue. The healthcare revenue cycle is a complex process with numerous complicating factors.
With this knowledge, the auditor can identify key terms of standardized contracts and evaluate the effects of nonstandard terms. Such information helps the auditor determine the procedures necessary to test whether revenue was properly reported.
A revenue control and management policy establishes proper control over all receipts and receivables and helps ensure sound financial management practices. Governments should adopt a revenue control and management policy over revenues as an integral component of their overall financial policies.
