RCM vs Medical Billing

What Is Medical Billing?

Medical billing is a widely-used term for the simple process of submitting billing claims to a patient after they have received medical care, and then following up on those claims to insurance companies until they have been paid to the medical provider. The remaining balance from the insurance companies will then be billed to the patient who received the care until the facility that performed the work is adequately reimbursed for their services.

What Is the Downside of Traditional Medical Billing?

While the process of medical billing may seem straightforward on the surface, it doesn’t typically give organizations a broader view of revenue cycles or a company’s financial stability. It can also be slow and tedious, requiring the entire medical billing staff to organize and implement effectively. To streamline this process and improve processing procedures, many healthcare practices have turned to RCM (revenue cycle management) tools to increase billing accuracy and overall earning potential.

What Is Revenue Cycle Management (RCM)?

Revenue cycle management (RCM) encompasses all of the financial processes involved with a patient’s medical appointment. RCM is highly detailed, organized, and efficient throughout the complexities of medical billing. These tools therefore can give healthcare providers a better look into the flow of money involved for each party involved in the collections process. Some financial transactions that RCM helps to administer include:

• Payer contracting
• Coding
• Medical collections
• Provider enrollment
• Management
• Compliance
• Analytics

What Are the Four Key Steps of RCM?

RCM can go above and beyond what typical medical billing can do. To capture the revenue cycle management process at a higher level, here are the four key steps involved in the payment processing system.

Step #1: Capture Patient Payments

After a patient leaves a medical facility, it can sometimes be difficult to receive a payment from them. It may seem like a simple step in the process, but having an automated tool or outsourced team to help record each payment can improve the individual collection system for patients. RCM systems can train staff on how to properly collect payments from patients or even set up an online payment system to make it easier for patients to access.

Step #2: Receive Insurance Collections

Insurance collections are a part of the process that is similar to traditional medical billing that most organizations are familiar with. Revenue collection management can ensure that all insurance claims are accurately processed, and if any denials in payment come through, they can be resubmitted. This process helps confirm that the services have been coded correctly for all parties involved.

Step #3: Generate Revenue for Your Facility

To keep the lights on and healthcare workers paid fairly, you will need to generate revenue for your facility. As patients in the public use your services, each service (or outsourced, contracted service) needs to be credentialed or coded correctly so all revenue streams from insurance companies to individual patients can be processed effectively.

Step #4: Improve Processes With Accurate Reporting

The last step is procedural adjustment and reporting. RCM takes medical billing further by going through the small details and personalized patient adjustments so they can be reported seamlessly. This reporting saves healthcare staff time and can help bring in additional revenue to a healthcare facility.

Is RCM Right for My Practice?

If your healthcare practice is a small facility with minimal patients and staff, you may not need a robust billing system such as RCM. Traditional medical billing may suit your practice’s needs just as well. However, if you operate a large healthcare facility with many moving pieces involved in patient care, an RCM can drastically improve billing processes and put you in better financial shape for the future.

For informational purposes only.