Fundamentals of Reimbursement in Health Care

Dena Rasnick

HSS210

Fundamentals of Reimbursement in Health Care

Professor Carole Sanders

Individual Project 5

November 9, 2015

Colorado Technical University

        The revenue cycle is the process of how patient financial and health information moves into through, and out of the healthcare facility or medical practice, culminating with the facility or practice receiving reimbursement for the services provided.

        There are many fundamental elements that must be in place at any healthcare organization. Proper organizational structure to support the revenue cycle management, along with physician support, is a best way to have a solid foundation for the practice. Clear communication about the revenue cycle between administration and providers must include more than simply supplying monthly reports or dashboard reports to specific departments or providers. Each individual should understand how to read and interpret the monthly reports regarding the revenue cycle, as well as take action, if necessary.

        Each step of the revenue cycle requires documented policies and procedures that are followed by the healthcare organization leadership. In the medical practice setting, these positions may be called Practice Administrator or Office Manager and may be outsourced, such as with a billing company, collection company, or healthcare accounting firm.

        This highly skilled team of professionals oversees and monitors the revenue cycle from all aspects beginning with the first patient contact and continuing until the account balance reaches zero. Proper credentialing of providers, skillful negotiations of managed care contacts, and accurately developed fee schedules and charge description masters are among the first blocks of a stable revenue cycle foundation. If the credentialing process is not completed correctly, proper reimbursement for services performed is not received and denials are affected. Just as important are the skillful negotiations of managed care contacts and the development of an accurate fee schedule and charge description masters. When completed successfully with the necessary analysis, the components of credentialing, contracting, and pricing offer a mechanism to begin the financial projections of the revenue cycle.

        Other important steps from the front end portion of the revenue cycle are preregistration and registration, insurance verification and preauthorization, patient scheduling, and provider documentation. When all of these beginning steps are completed accurately, the claims are submitted to the payer and the proper reimbursements are received. From the billing perspective, this is the ideal world. However, the payers develop policies and the government develops regulations that all affect reimbursement. Monitoring the revenue cycle on the payment side is critical to resolving operational issues that negatively impact reimbursements.