If you’re a private pediatric therapy clinic owner, you started your practice because you love helping and healing. Seeing a child’s life improve because of the work you do is fulfilling. And even if some days are stressful, you probably love providing care. But financial management? Maybe not so much.
The revenue cycle is an integral part of the business, however, and understanding how it works can help you grow your practice to serve even more patients. For your practice to thrive, you need to know the components of the revenue cycle and how they work together to create your practice’s financial picture.
What is the Healthcare Revenue Cycle?
The revenue cycle is about getting paid for the services you provide. The Healthcare Financial Management Association (HFMA) defines the cycle as “all the elements that contribute to the capture, management, and collection of patient service revenue.” When you’re managing the revenue cycle well, your practice can thrive. But problems in one stage of the cycle can affect later stages, compounding the problems’ effects and wreaking havoc on your clinic’s profitability.
What are the Components of the Revenue Cycle?
There are six basic components to the revenue cycle, starting with scheduling and pre-authorization and continuing through payment posting.
1. Scheduling and Pre-Authorization
Before a patient can be treated, they need to be scheduled and pre-authorized. Unless the treatment is an emergency, all insurers require pre-approval for services and procedures to document that they’re medically necessary. Note that pre-approval doesn’t guarantee coverage, however. It’s important to check the specifics of the patient’s plan to ensure that a treatment is covered.
2. Providing Care
When a therapist is providing care, be sure to fully document what’s being provided. Depending on the treatment, you may need to track time. A good EMR software will offer specialized templates that will save you time on notes and evaluations.
Check out our EMR Buyer’s Guide to learn what you should be looking for in an EMR to improve your practice’s profitability.
3. Submitting Claims
This stage is where many clinics are leaving money on the table. If you’re not using the best codes for the treatment you provided, or if you haven’t accounted for all time spent with the patient, you won’t be reimbursed appropriately. Other mistakes in the claims process can hold you back as well. A good EMR will help you at this stage, giving you the ability to automate parts of the process and bulk-submit claims.
4. Managing Rejections and Denials
If a claim is rejected due to a simple mistake, you can correct the error and resubmit the claim. If the problem with the claim is more significant, the claim may be denied. Depending on the nature of the problem, you may be able to appeal and reprocess the claim. Look for patterns in rejections and denials to see if there’s a weakness or breakdown in your claims submission process.
5. Payment Posting
After a claim has been approved, payment can be posted. You can notify the patient and send a “click to pay” link so they can conveniently pay online. Again, your EMR can help you streamline this process, especially if it has an integrated payment processor (like Fusion has).
Reports give you insight into the health of your practice. You’ll want to regularly run reports on patient attendance, charges by type and source, payments, staff productivity, and other data that will help you make improvements.
How Can Understanding the Revenue Cycle Help Me to Grow My Practice?
When you understand how the revenue cycle works and identify problems that frequently crop up in the various stages, you can make changes that will clear up issues and streamline the process. Understanding and improving your revenue cycle has three benefits:
Improve Your Revenue — You’ll maximize your reimbursements by using the proper codes and accounting for all time and treatment given.
Reduce Costs — You’ll waste less staff time dedicated to correcting mistakes and resubmitting or appealing claims. You can also reduce costs by automating much of the process using software.
Exceed Patient Expectations — Patients appreciate a well-organized practice where staff are responsive and helpful. When you free up time previously spent correcting problems, staff can spend more time with patients (and they’ll be less stressed while doing so!).
Understanding the revenue cycle is essential for a healthy clinic. By improving your revenue cycle, you can grow your practice, serving more patients and providing a better experience for them.
Need help with billing? Let us take care of your claims.
Spend less time on billing with Fusion’s claims management service. Schedule a call to find out if Assisted Billing is a good fit for your practice.
In-House Billing Kit
We’ve put together some resources to help you bring billing in-house. This In-House Billing Kit includes:
- A Verification Questionnaire to use when calling payers to verify coverage
- A 50% off coupon for our billing course, The Essentials of Insurance Billing for Therapy
- A Billing & Collections Checklist to guide you as you interact with caregivers
- A Payment Policy Generator to help you set expectations for caregivers
- 7 Tips to Help with Billing & Collections handout