The medical revenue cycle is a process of actions used to turn the medical claim into cash flow. The cycle includes receipt of claims, patient demographic and insurance information. The claims are coded, and data entry of the information is accomplished. Next, claims are filed with the insurance carrier. When electronic deposits or check payments are received, these payments are posted to the patient’s account.
For a claim that did not pay or paid incorrectly it moves to the follow-up process for review and action that will cycle the claim back to the insurance carrier for reconsideration. Claim balances with co-pays or deductibles are mailed to the guarantor as a statement.
The cycle for a single claim ends when the patient account balance is ZERO. The on-going revenue cycle never ends, but is managed through software processing techniques and benchmarks, such as, expected collections, the collection ratio, days-in-accounts-receivable, and analysis of aged receivables.
Medical revenue cycle management requires a good billing software, experienced employees in coding, data entry, follow-up, posting, and account management. Most important, the cycle requires dedicated time and consistent performance of each employee.
The “inputs” to the revenue cycle are medical claims and patient information. The “output” is cash flow.
The analogy of maintaining the revenue cycle is like riding a bicycle. As long as someone is pedaling, steering, and looking at the road (the cycle), the bike moves forward (cash flow).