WHAT IS REVENUE CYCLE MANAGEMENT (RCM)?

[Pages:2]WHAT IS REVENUE CYCLE MANAGEMENT (RCM)?

It turns out that the term "revenue cycle management" (RCM) may not be understood by many Behavioral Health agencies. Perhaps because EHR and other system vendors have adopted the term to describe their back-end billing technology. Or perhaps because a term that is well understood in most medical specialties and hospitals simply hasn't migrated to Behavioral Health. In this article, we describe RCM as it is known in those other worlds and, increasingly, as it is viewed in the Behavioral Health community. Traditional Behavioral Health reimbursement was primarily in the form of grants. And many agencies still receive significant grant income. But Behavioral Health agencies find more and more of their revenue is from insurance carriers, including Medicaid and commercial insurers. This trend is continuing and becoming more complex as Medicaid beneficiaries are moved into managed care plans and as integrated care models are introduced. The result, of course, is that agencies must now deal with insurance billing and collections just as physicians and hospitals do. But most Behavioral Health systems and agencies did not "grow up" with these expectations. Many EHR's have adapted by adding a billing module onto their clinical workflow. Even so, comprehensive capabilities remain an exception. Which brings us to: "What is the difference between billing and revenue cycle management?" or "What is the difference between a clearinghouse and revenue cycle management?" The answer: an end-to-end perspective. For example, it is relatively straightforward to have a billing module that prepares claims and files them with a clearinghouse for processing. Note that the clearinghouse accepts agency claims and passes them along to the right insurance company; it does no processing of the claims, nor does it do any billing work to prepare them. The billing module then posts the payments when they come in. A complete RCM workflow, on the other hand, includes comprehensive information capture from the client and check-in staff, verification that all charges are properly captured, claim scrubbing, claim filing via clearinghouse or directly, verification/ eligibility for each claim, payment posting, identification of claims not processed, management of each denial, identification of underpayments and comprehensive reporting. Plus auditing and verification steps throughout the process.



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Some agencies have matured to the point where they execute these processes effectively every day. But many more struggle, for several reasons:

- Staff may be insufficiently trained or, more often, staff turnover makes it difficult to keep enough expertise - Experienced staff may not have enough time to keep up with changes in insurance company rules and regulatory

requirements - The EHR or other technology used often has limitations that make it difficult and/or time-consuming to manage the

entire RCM process.

As a result, most agencies attempting to perform revenue cycle management in-house achieve sub-optimum results: i.e. their revenue is less than it could be.

These agencies have two choices: spend more money on staff, training and technology or outsource revenue cycle management to an RCM specialist. Hiring an RCM firm to do the work means that the agency can focus on clients while their RCM firm deals with all of the billing and insurance complexities. For these reasons, outsourced RCM services are commonplace with physicians and hospitals.

Note that the fixed expenses associated with in-house billing such as staff, training, space (rent), clearinghouse, etc. are eliminated. RCM firms typically charge a percentage of what they collect or a fixed amount per case. This variable cost that varies with client volume contrasts with the fixed expenses and overhead associated with in-house billing.

There are also other benefits to consider. RCM firms typically have much deeper compliance expertise which can significantly reduce agency risk. And they usually offer more complete reporting and dashboards than are available in-house.

The largest benefit, however, is from increased revenue. By specializing in RCM work, an outsourcing firm is familiar with each insurance company's nuances and has comprehensive follow-up attention on denied claims and under-payments.

SUMMARY

To summarize, an end-to-end "Revenue Cycle Management" (RCM) billing process is essential for the current and emerging Behavioral Health environment. But RCM means much more than filing claims or a clearinghouse.

RCM can be performed internally or it can be outsourced to an RCM firm. Since many agencies don't have the expertise needed and/or have trouble keeping skilled staff, the trend toward outsourcing is expected to continue as billing and insurance requirements become more complex.

AdvantEdge Healthcare Solutions is the nations largest behavioral health biller that provides complete billing, and revenue cycle management solutions for behavioral health since 1987. If you have questions about how AdvantEdge can improve your billing to collect every dollar that you're legally and ethically entitled, please call us at 877-501-1611 or email info@



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