Medical billing plays a crucial role in managing healthcare financial operations, but it also has limitations that are increasingly becoming evident due to the advent of new technologies. In search of accurate and sustainable financial operations, healthcare sectors and providers are steering away from implementing traditional medical billing processes and moving towards a more efficient and sophisticated solution- Revenue Cycle Management (RCM).
Now, you must be wondering how medical billing and revenue cycle management are different from each other. The following blog will help you differentiate the two key areas, allowing you to decide whether to choose a medical billing service or Revenue cycle management (RCM) for your healthcare practice. However, let’s explore their scope of work in the healthcare sector.
Define Medical Billing and RCM
The medical Billing process involves creating, submitting, and following up on claims with insurance companies to receive timely reimbursements for the services delivered by the providers. The process also involves translating services into standardized codes, creating claims, filing them, and eliminating denials to collect payments from payers and patients.
Whereas, Revenue Cycle Management (RCM) is a comprehensive and end-to-end process of managing all the revenue generation functions related to billing and collecting payments for medical services. The process begins with a patient’s appointment scheduling and insurance verification and ends with final payment and reconciliation of accounts.
While medical billing is a pivotal part of Revenue Cycle Management, RCM encompasses a wide array of activities and focuses on improving the overall financial performance of the healthcare sectors.
Key Differences Between Medical Billing and RCM
Both Medical Billing and RCM play a distinct role in managing the financial health of your practice. However, there are certain aspects where they may differ from each other. Let’s delve into a few of them, which are outlined below:
- Scope of Work
Medical billing is the process of claim submission, follow-up, and collection. It encompasses accurately coding diagnoses, procedures, and medications to ensure clean claims are submitted for the first time, reducing the rate of claim denials. Medical billers track claims through their lifecycle, correct errors, and ensure payments are processed efficiently.
RCM, however, includes patient registration, insurance verification, collections, and post-payment audits. Revenue cycle managers use a holistic approach by managing each facet of the process efficiently, be it eligibility checks, prior authorization, charge posting, denials management, payment collection, and so on.
- Required Timeframe
The primary focus of medical billing lies in the swift and accurate processing of claims and getting timely reimbursements. This process takes immediate steps to translate healthcare services into financial transactions, which is a time-efficient process. From coding medical procedures, generating claims, and following up with insurance providers, the emphasis is on shorter timeframes and expeditious resolution.
Revenue cycle management involves multiple steps as it covers a wide array of services. This takes a lot of time as the RCM process includes a thorough understanding of the multifaceted interactions a patient has with the healthcare system.
- Technology Integration
Medical billing uses basic billing software to submit claims, correct errors, resubmit claims and follow up on them. It typically focuses on automating the claims submission process and tracking the claims by utilizing various software.
RCM, on the other hand, incorporates advanced analytics, reporting tools, and dashboards that give key insights into certain financial metrics such as AR days, clean claims rate, denial rates, outstanding payments, etc. The data analytics tools help to improve revenue streams by identifying potential risks in the revenue cycle.
- Compliance and Reporting
Medical billing adheres to ICD-10, CPT, and HCPCS Level II codes to ensure all claims are compliant when submitted. The billers also ensure that they stay up to date with payer-specific rules and guidelines to minimize the rate of denied claims.
RCM process adheres to HIPAA regulations to protect patient data from leaking. Apart from that, it incorporates accurate audit management and proper documentation to reduce claim denials.
- Patient Experience
There is no direct involvement of medical billing in enhancing patient experience as it is primarily concerned with financial transactions, such as submitting correct claims and following up on the claims.
However, Revenue Cycle Management takes a more patient-centric approach. One of the key aspects of this patient-centric approach is providing transparent billing practices to the patients. It includes clear and understandable explanations of charges, ensuring patients better understand their financial responsibilities towards the services. Revenue cycle management strategies include initiatives that help patients understand any unexpected out-of-pocket expenses that may be incurred.
The Interplay Between Medical Billing and Revenue Cycle Management
Although medical billing and revenue cycle management are distinct, they are inextricably interconnected. An efficient RCM process ensures that medical billing is run smoothly. For example, the two most critical components of RCM are patient registration and eligibility verification. Errors in any of the processes can lead to claim denials, directly affecting medical billing outcomes. On the other hand, efficient medical billing ensures all RCM goals, such as streamlined billing, enhanced bottom line, reduced AR days, etc.
Taking a proactive approach in RCM can help providers avoid costly billing errors, improve claim acceptance rate, and increase patient satisfaction through efficient billing communications. This holistic approach directly strengthens the financial foundation of any healthcare practice.
Why Hire a Certified Billing Specialist or RCM Expert for Your Practice
Hiring a certified medical billing specialist can significantly improve your bottom line and increase patient care. Billing specialists ensure efficiency and accuracy in data management, claim submission, and timely reimbursement. Furthermore, billing specialists reduce billing errors, resulting in enhanced clean claim submission and acceptance rates.
Similarly, the RCM is a multifaceted process that includes a lot of administrative work. Without an RCM expert, physicians can burden themselves with piles of paperwork, which can be time-consuming. The added administrative responsibilities can detract providers from delivering excellent patient care. Thus, hiring an RCM expert can alleviate this burden, allowing you to refocus on your primary responsibilities.
Ready to take the next step for your practice?
If you are searching for expert medical billing and revenue cycle specialists, your quest for the right person ends here. At RCM Workshop, we commit to streamlining your billing needs and increasing revenue. Our team of dedicated and experienced RCM specialists possess extensive expertise in diverse fields and know every facet of your revenue cycle. By entrusting your billing needs to us, you can focus on your core competencies and enjoy the accuracy and specialization of our revenue cycle management practices.
To End With…
Medical billing and revenue cycle management are often used interchangeably, but they serve different purposes within the financial ecosystem of the healthcare industry. Medical billing is a component of RCM that focuses on claim submission and payment collection. RCM, however, is a comprehensive approach that covers every aspect of a provider’s financial workflow, from patient registration to final payment collection. However, there are challenges in both medical billing and RCM, which can be mitigated by hiring an expert in these fields.
