Healthcare Revenue Cycle Essay

Just like any other business that keeps track of claims for payments the health care industry also has a system of their own called The revenue cycle. The revenue cycle manages claims processing, payment and revenue generation. Meaning the process includes keeping track of claims and making sure payments are collected and denied claims are addressed in an appropriate manner. In present times health care industry is a very complicated in terms of managing the services provided. A physician must document every single detail when seeing a patient. The documentation serves are proof that services need to be charged. The reason behind this is to limit fraud that can occur and making sure that there is no waste of health care resources.
The recent passion for medicine has created a sense of
urgency for hospitals and health care systems to complete these transactions in a quickly manner as possible in order to remain competitive. The six stages of revenue cycle include 1) service, 2) service documented, 3) charges developed, 4) coding performed, 5) Bill/claim produced, and 6) payment received. The stages in the revenue cycles are crucial as they are a step wise process of generating revenue for a physician clinic or the hospital system. “Health systems that acquire physician practices often underestimate not only the challenges of developing an effective professional fee revenue cycle process, but also the consequences of not doing it right. Developing an effective physician practice revenue cycle requires sophisticated leadership skills, including strategic vision, organizational design, management discipline, and infrastructure development.” (Colton).

When you go to the hospital the first thing that we always do is get identified.
The typical step usually involves registration and it’s a simple process of knowing who you are. The registration process is a process of collecting Basic information such as Insurance verification, including patient’s health plan identification number, the amount due from patient for deductible or copay and finally financial counseling for patients who are self-pay. Registration is crucial for revenue cycle as the hospital. According to American hospital association 60 percent of hospitals In the United States lose money providing patient care “While that percentage might seem high, it’s even more shocking when paired with the statistic that healthcare providers lose $60 billion a year due to registration errors alone.” (Woodhead). Hence the process of registration is very crucial for the revenue cycle as the staff must obtain accurate information as all the information collected leads to the creation of medical record which must be accurate to provide the best medical service as possible. Accuracy is an important factor as one mistake could cause the hospital to bill the patient with false
statements.
“In 2011, $2.27 trillion was spent on health care and more than four billion health insurance claims were processed in the United States. It is an undisputed reality that some of these health insurance claims are fraudulent.” (NHCCA). The most common types of fraud that could occur in health care industry is due to inaccurate billing. Billing for services that were never rendered by genuine patient information, sometimes obtained through theft, fabrication or claims with charges for procedures or services that did not occur.
Billing for expensive services or fraudulent procedures is commonly refered to as “up coding”. falsely billing for a higher-priced treatment than was actually provided, which often requires the accompanying "inflation" of the patient's diagnosis code to a more serious condition consistent with the false procedure code. Hence it is crucial appropriate training for medical professional to obtain appropriate information from the patients for accuracy in billing and coding.
After a physician sees a patient and makes appropriate diagnosis. Each diagnosis is assigned an ICD9 code. The codes are usually numbered to assist insurance companies in determining coverage for the services provided. The medical biller is usually transmits the codes to the insurance companies electronically for payment. In the past most of these codes were sent in paper format which would take time but in recent times due to the effective use of technology all of these transactions are done electronically. The two most common types of forms that were used are CMS-1500 and CMS-1450 (UB-04). The major difference between CMS 1500 vs CMS 1450 is that the 1500 is a health insurance claim form used for submitting claims for health care service providers such as your general practitioner. While the CMS-1450 is used by institutional providers such as hospitals.
CMS previously known as health care financing administration is a federal agency that administers the Medicare/Medicaid program. CMS makes sure the information submitted to them by health care providers is compliant with HIPAA standards. Hence claims submitted electronically must be transmitted through software that is compliant with standards instituted by the health insurance portability and accountability act. “ The claim is electronically transmitted in data “packets” from the provider's computer modem to the Medicare contractor's modem over a telephone line. Medicare contractors perform a series of edits. The initial edits are to determine if the claims in a batch meet the basic requirements of the HIPAA standard. If errors are detected at this level, the entire batch of claims would be rejected for correction and resubmission.” (CMS)