REIMBURSEMENT AND REVENUE CYCLE 7
Reimbursementand Revenue Cycle
Reimbursementand Revenue Cycle
Reimbursementand revenue cycle are considered to form an integral component of thenation well-being, and as the cost of healthcare increases, there arechallenges that are faced by the doctors and that can prevent themfrom providing better healthcare to the patients(Consolver & Phillips, 2016).Therefore, the primary purpose of the research is to examine thevarious aspect of reimbursement and revenue cycle within healthcareorganization as discussed below.
Descriptionof Reimbursement to Specific Healthcare Organization
Regardingpayments and rendering of services, hospitals operate differentlyfrom other organization since payment is made after the service hasbeen offered. Therefore, according to Rauscher(2008), reimbursementis a common term that is applied to the healthcare system to refer torepayment or compensation for healthcare services offered. Similarly, reimbursement is the payment received or the compensationmade for any expenses that have already been incurred within thehealthcare. As mentioned earlier, most of the services offered withinthe healthcare are rendered before the actual payment is made(Rauscher, 2008).In other sectors, customers are required to pay for goods andservices before the ownership is transferred to the client or serviceoffered. On the other hand, once the patients have been attended tothey walk out and it is upon the physician to seek for payment forthe service offered among other expenses such as the suppliers.Hence, the healthcare organizations, practitioners, hospitals,clinics, and physicians have the right to request for reimbursementfor the services offered (Rauscher,2008).
Consequencesof Delivery Services to Patients without Receiving Payments
Rauscher(2008), stated that thereare numerous challenges that can be experienced when health servicesare provided to the patient, and they fail to pay for them. First,lack of payment can demotivate the physicians, and that can influencethe quality of service offered to the patients. Similarly, thecommitment of the practitioners is likely to reduce since they do notobtain the reward of their hard work. Therefore, lack of payment canresult in poor service, and that has an impact on the health of thepatient and by extension to the whole society (Rauscher,2008).The community can experience the pain due to the death of their lovedones from the illness that could be easily prevented or treated.Secondly, the payment received from the patient can be used toimprove the facilities that are used in the hospital. When thepayment is not made that imply that essential amenities that arerequired to improve service delivery will not be available. On theother hand, patients can be forced to look for healthcare in otherplaces, and that would force them to incur more expense on transportamong other expenditures (Rauscher,2008).
Typeof Data to Review in Reimbursement Area
Withinthe reimbursement area, there a lot of data that can be examined todetermine whether changes are necessary. First, within thereimbursement area, there are certain debts that are commonlyreferred as the bad debts. These are debts that are owned by thepatients, and they are not able to pay them, so the debts are writtenoff. When the amount of bad debts is huge, that is a clearindication that there are certain changes that are necessary withinthe healthcare system. Additionally, another type of data to considerthat can help to make necessary changes is the amount of paymentreceived (Rauscher,2008).The payment received help in daily operations that take place in thehospital and when it cannot cater for all the expenses that implythat there is need to make an immediate adjustment in thereimbursement. Hence, when bad debts and payment received areanalyzed, they can help to assess whether there is a need to makechanges in the hospital or not (Rauscher,2008).
Depictionof Revenue Cycle Using Flow Charts
Schuler,Berkebile & Vallozzi (2016), suggested that Revenuecycle within the healthcare system can be regarded as all theclinical and administrative functions that play a significant role inmanagement, capturing and collection of patient service revenue.Similarly, the revenue cycle represents the complete life of thepatient account from the initial contact to payment. Revenue cyclehas an impact on one another, and when the functions are performedcorrectly then the cycle become predictable. Therefore, the followingrevenue cycle depicts the expansion and implantations of proceedscycle management procedures, rules, standards, and performanceestimation(Schuler, Berkebile & Vallozzi 2016).
Third-partyagreement intervention and management
Patientarrangement and registering, precertification and assuranceconfirmation
Deliveryof services and medical official papers
Duration: 15-19 days
(Estimatedas day of charge entry lag)
Billing,claims planning, and claims excision follow-up and denials management
Period: 57-66 days
(Estimatedas days in accounts
Cashcollection and posting
Figure(1), shows the revenue cycle in the hospital (Schuler,Berkebile & Vallozzi, 2016)
Prioritizationof Departments in Order of Their Importance to the Revenue Cycle
Thereare certain departments within the healthcare system that mustfeature in the revenue cycle and they vary regarding their priorityas listed below.
Admission department (keeps record of the patients)
Finance department (contains financial statement of the patients)
Medical Department (shows various medical produces that the patient has undergone)
Support department (helps to keep vital information such IT)
Public relation department (assist in maintaining the relation between the organization and the public)
Communication department (helps to communicate with the patients)
Reimbursementand revenue cycle are considered to form an integral component of thenation well-being, and as the cost of healthcare increases, there arechallenges that are faced by the doctors and that can prevent themfrom providing better healthcare to the patients. Similarly,reimbursement is a common term that is applied to the healthcaresystem to refer to repayment or compensation for healthcare servicesoffered. Additionally, revenue cycle within the healthcare system canbe regarded as all the clinical and administrative functions thatplay a significant role in management, capturing and collection ofpatient service revenue.
Consolver,P., & Phillips, S. (2016). Creating a culture of accountabilityin patient access. Managementin Healthcare,1(1),33-41.
Rauscher,S. (2008). Effective Hospital Revenue Cycle Management: Is There aTrade-off Between the Amount of Patient Revenue and the Speed ofRevenue Collection?/PRACTITIONER APPLICATION. Journalof Healthcare Management,53(6),392.
Schuler,M., Berkebile, J., & Vallozzi, A. (2016). Optimizing revenuecycle performance before, during, and after an EHR implementation.HealthcareFinancial Management,70(6),76-81.