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The revenue cycle process in healthcare is complicated, requiring the coordination of numerous moving pieces and actors.
FREMONT, CA: The term "healthcare revenue cycle management" refers to administrative and clinical responsibilities involved in capturing, managing, and collecting income from patient services.
The revenue cycle in healthcare begins with a patient's preregistration and continues until all of the patient's payments are collected. The revenue cycle begins when a patient calls to schedule an appointment and ends when their account balance reaches zero. In other words, it encompasses the entirety of a patient's account's journey.
Significance of Revenue Cycle in Healthcare
A healthcare organization's principal objective is to provide high-quality care to patients, which cannot be accomplished unless the business is first and foremost profitable. This highlights the critical nature of revenue cycle management in healthcare.
For instance, one out of every five dollars spent on revenue cycle management is spent on denials-related issues. While 67% of denials are recovered, 90 percent are preventable. Additionally, evidence indicates that efficiently preventing denials might result in an additional revenue stream of up to $5 million for a typical hospital.
While healthcare businesses have long recognized the value of revenue cycle management as an integral element of daily operations, unanticipated changes in policies or laws can further complicate an already complicated process. When a business has established good revenue cycle management, it is in a stronger position to deal with unplanned circumstances.
COVID-19 had a considerable impact on healthcare organizations in 2020 and even now, in various ways, some more evident than others. One of the less-discussed consequences has been the expansion of the revenue cycle. For most hospitals and health systems, the costs of canceling elective treatments far outweigh any money gained by COVID-19 patient care, if any.
COVID-19 has put most of the United States' healthcare system under unprecedented financial hardship, with losses projected at much to $122 billion. However, health insurance firms have reported outstanding profits during the pandemic.
Healthcare leaders seek revenue cycle professionals to assist them in optimizing reimbursement under COVID-19 by focusing on the entire revenue cycle. Patients and customers may overlook the critical role of effective revenue cycle management in keeping a healthcare organization's doors open.
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