Revenue cycle management
Revenue cycle management or RCM describes the process of managing and tracking all the revenue from patient interactions starting with scheduling the patient and ending with collecting final payments.
Financial management is one important aspect of running a therapy business and revenue cycle management or RCM describes the process of managing and tracking all the revenue from patient interactions starting with scheduling the patient and ending with collecting final payments.
Summary
- Effective RCM ensures smooth revenue tracking from patient scheduling to final payment collection. Key steps include accurate patient intake, proper coding, electronic claims submission, and timely denial management.
- Investing in tools and conducting regular staff training can streamline billing, coding, and claims management. Automated systems such as EHRs can help track invoices, payments, and authorizations, minimizing errors and improving cash flow.
- Issues can arise from therapists (documentation and coding errors), administrative staff (claims processing and preauthorization tracking), and patients (misunderstanding insurance benefits). Proactive communication and training can mitigate these challenges. Enrolling in an insurance billing course for therapists can help providers enhance their knowledge.
- An optimized RCM process improves cash flow, enhances transparency in billing, and reduces administrative burden. This not only benefits the clinic financially but also fosters trust and satisfaction among patients.
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Therapy school prepares therapists to care for many types of patients across numerous healthcare settings. In general, though, little time is spent preparing them to open and successfully operate their own businesses.
In this article, we will outline the aspects of effective Revenue Cycle Management and highlight some of the challenges and benefits of implementing these systems in your practice.
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The basics of Revenue Cycle Management for therapists
Revenue Cycle Management for therapists outlines the process of revenue tracking for patient encounters.
The timeline from an initial patient encounter to receiving the final payment for services can be quite long and a structured strategy for tracking expenses and payments is important for the overall financial health of the business.
The steps of Revenue Cycle Management or RCM include:
- Accurate patient intake and verification
- Obtaining preauthorization and prior approval where needed
- Accurate ICD-10 coding with thorough documentation and code capture
- Prompt and accurate electronic claims submission
- Payment posting and tracking by recording payments from patients and insurers
- Timely denial management through error identification and claims resubmission
- Accounts receivable follow-up for outstanding payments
- Collection of patient copays and and balances
- Regular communication with patients and payers
Best practices for effective Revenue Cycle Management for therapists
A strong Revenue Cycle Management workflow takes planning and implementing best practices for effective RCM can make the process easier.
The right software program helps keep track of authorizations, invoices and payments but staff should periodically run regular audits to review claims and documentation. This can identify gaps or inefficiencies in current processes and ensure errors and discrepancies are remediated quickly.
Additionally, having staff who are well trained in billing and coding practices and payer requirements improves efficiency and helps reduce errors and claim denials.
Regular staff training is worth the investment as billing, coding and claims processes and regulations often undergo changes.
Staying on top of these changes can be challenging but periodic staff training keeps them up to speed. It also ensures that new staff are well-informed and gives opportunities for questions to be answered and concerns to be addressed promptly.
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Revenue Cycle Management challenges for therapists
Identifying potential pitfalls and challenges in the RCM process ahead of time can improve its effectiveness. These challenges can arise at any point in the cycle.
Therapist-centric challenges: Thorough and accurate documentation and comprehensive charge capture lies in the hands of the therapists.
Therapists must ensure they are providing services that are known to be covered by the patient's insurance and capturing charges correctly and in a timely manner.
They must also be coding correctly and supporting their codes and charges with high quality documentation as this can lead to claim denials and delays in payment or preauthorization.
Staff and clinic-centric challenges: Invoicing and posting payments is an essential part of RCM.
At times it can be difficult to obtain payment owed for therapy services so it is important to have an effective system to send out invoices and reminders as well as post payments upon receipt.
Claim denials and rejections often begin with administrative staff. Verifying benefits accurately and identifying patients and services that require preauthorization is an essential early step for RCM.
Additionally, both therapists and administrative staff should monitor the service dates and visit allowances specified in preauthorizations and benefit allowances to ensure they are not exceeded as well as work together to navigate HIPAA, Medicare, and payer-specific guidelines.
When claims are denied, a process to evaluate the claim, determine the reason for denial, update the claim and resubmit should be in place and clear to all staff. This should happen quickly to minimize payment delays.
Client-centric challenges: Though patients are responsible for understanding their own insurance benefits, in truth, many individuals have difficulty understanding the terminology and implications of their insurance benefits. This can often lead to surprises when staff explain the coverage and patient responsibilities at their first visit.
Encouraging patients to call their insurance company ahead of time, even while staff verify benefits on their end, can help prepare patients ahead of time and lead to more productive conversations when onsite at the clinic.
Having financial discussions with patients and clients is an art. The Health Financial Management Association (HFMA) has published some guidelines to help staff engage in productive and helpful financial communication with patients.
Seeking to understand a patient's financial situation and being willing to work with them or to provide resources on financial assistance can strengthen the therapeutic relationship from the beginning.
Benefits of strong Revenue Cycle Management for therapists
A strong and efficient RCM system has many benefits for a therapy business. Improved cash flow is one of the most impactful benefits of strong RCM. This is achieved through faster reimbursement and reducing the number of outstanding balances.
With better cash flow comes opportunities for growth and improved financial stability. Patients also tend to be more satisfied when RCM processes are in place.
Transparent billing practices are an essential component of RCM. This aspect improves client trust and increases the likelihood that patients can afford and will pay for therapy services already rendered.
Finally, strong RCM processes reduce administrative burden. There are a lot of irons in the fire of a therapy clinic and streamlining workflows frees up time for patient care and to focus on other important aspects of running a business.
If you have not implemented an organized approach to RCM, we hope you see the benefits of doing so now.
Strong RCM practices are essential for financial health and operational efficiency and through the collaboration of all staff members, can become streamlined practices.
From the first interaction with a patient to the collection of their final payment, RCM can enhance patient satisfaction and ensure that both sides of the therapeutic partnership benefit from the interaction.
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How EHR and practice management software can save you time with revenue cycle management
EHRs with integrated billing software and clearing houses, such as TheraPlatform, offer therapists significant advantages in creating an efficient insurance billing process.
The key is minimizing the amount of time dedicated to developing, sending, and tracking medical claims through features such as automation and batching.
What are automation and batching?
- Automation refers to setting up software to perform tasks with limited human interaction.
- Batching or performing administrative tasks in blocks of time at once allows you to perform a task from a single entry point with less clicking.
Which billing and medical claim tasks can be automated and batched through billing software?
- Invoices: Create multiple invoices for multiple clients with a click or two of a button or set up auto-invoice creation, and the software will automatically create invoices for you at the preferred time. You can even have the system automatically send invoices to your clients.
- Credit card processing: Charge multiple clients with a click of a button or set up auto credit card billing, and the billing software will automatically charge the card (easier than swiping!)
- Email payment reminders: Never manually send another reminder email for payment again, or skip this altogether by enabling auto credit card charges.
- Automated claim creation and submission: Batch multiple claims with one button click or turn auto claim creation and submission on.
- Live claim validation: The system reviews each claim to catch any human errors before submission, saving you time and reducing rejected claims.
- Automated payment posting: Streamline posting procedures for paid medical claims with ERA. When insurance offers ERA, all their payments will post automatically on TheraPlatform's EHR.
- Tracking: Track payment and profits, including aging invoices, overdue invoices, transactions, billed services, service providers.
Utilizing billing software integrated with an EHR and practice management software can make storing and sharing billing and insurance easy and save providers time when it comes to insurance billing for therapists.
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Resources
TheraPlatform is an all-in-one EHR, practice management, and teletherapy software built for therapists to help them save time on admin tasks. It offers a 30-day risk-free trial with no credit card required and supports mental and behavioral health, SLPs, OTs, and PTs in group and solo practices.
More resources
- Therapy resources and worksheets
- Therapy private practice courses
- Ultimate teletherapy ebook
- The Ultimate Insurance Billing Guide for Therapists
- The Ultimate Guide to Starting a Private Therapy Practice
- Mental health credentialing
- Insurance billing 101
- Practice management tools
- Behavioral Health tools
Free video classes
- Free on-demand insurance billing for therapist course
- Free mini video lessons to enhance your private practice
- 9 Admin tasks to automate in your private practice
FAQs about revenue cycle management for physical therapists
What is Revenue Cycle Management (RCM)?
RCM tracks revenue from scheduling to final payment. For therapists, it ensures timely reimbursement, fewer denials, and healthier cash flow.
What challenges do therapists face with RCM?
Common issues include documentation errors, claim denials, and patient confusion about insurance benefits. Training, communication, and automation help reduce these problems.
How can therapists improve RCM?
Use EHRs with billing tools, set up online payments, train staff regularly, and run audits to streamline claims and speed up payments.
