The healthcare industry is complex and expensive. Running a healthcare facility sustainably and profitably requires careful financial management, carried out by professionals – either in-house or outsourced – who are experts in patient revenue management, as well as controlling expenditure and capital investment.
3 ways to build and manage your patient revenue cycle
Healthcare financial management is vital to ensure that your facility maintains sufficient cash flow, provides value-based care, manages risk effectively, and continues to invest wisely in medical research and equipment. As with any other business, timely revenue collection is vital for supporting financial and operational functions. In order to keep an efficient revenue management system that sustains cash flow and fuels the viability and growth of your facility, incorporate the following three steps into your finance department:
- Separate front-end and back-end revenue management. A healthcare facility’s revenue collection system is divided into two distinct parts: the front-end is patient-facing and involves the collection of information patients at the point of service, including ascertaining payment capacity, insurance data, coverage information, etc. The back-end is where claims are managed, including denials and approvals, bills are generated, and final patient responsibility is collected. For maximum efficiency, these two halves of your revenue cycle should be kept separate. Doing so will make the revenue cycle seamless and efficient.
- Take a data-driven approach to track and adjust your revenue cycle. You should have all the data you need to track your revenue cycle and assess its performance, as well as the overall financial health of your facility. By developing and tracking key performance indicators (KPIs), you can make it easier to measure your business’s financial performance. You can then adjust your financial practices, including managing your revenue cycle, in line with your KPIs.
- Collect patient financial responsibility up front. The insurance market is dominated by high-deductible health plans, which means that a significant portion of the funds owed to healthcare facilities is the responsibility of patients, rather than insurance companies. Collecting patient responsibility in arrears takes time and resources that could be better allocated elsewhere. For this reason, it is best to demand payment of deductibles upfront, at the point of service. With patients having paid their portion, your financial management team can focus on collecting payment from insurance providers.
The effective management of your patient revenue cycle requires the assistance of trained professionals. Whether you decide to recruit in-house or outsource services in this area, Grace Federal Solutions LLC can help you set up an efficient revenue cycle that flows seamlessly and ensures the financial strength of your facility.
Grace Federal Solutions LLC offers healthcare recruitment services, as well as healthcare financial management and healthcare consulting services. Contact us for more information about how to improve your patient revenue management system.