EHRs and Revenue Cycle Management (RCM)

Transition to HIPAA 5010 electronic transaction standards and implementation of ICD-10 codes are meant to refine newly deployed electronic health record systems for improving healthcare service quality and cost management. Thus far it seems to be a win-win for everyone following the government led healthcare reforms for mutual benefits, but is it that simple to save billions of dollars when upfront costs to set up this electronic transaction and coding system is touching new levels day-after-day? Let’s dig into the whirlpool of these transitions to find if there were really loopholes in the healthcare system that need to be patched up, draining out all the money in hidden, deep pockets, or everyone is beating the bush in exaggerated hopes.

It is a bit complicated to calculate, but by avoiding unnecessary tests and eliminating mistakes in practice have made these huge savings possible. Payment claims manually sent to different organizations used to slow down and marginalize revenues while inaccuracies found later and objections by third parties further delayed the revenue cycle to complete its circle. EHR applications are instrumental in streamlining accurate coding, billing, and processing of claims across networks in digital formats. The technology has facilitated revenue cycle management (RCM) through integrating clinical procedures and connecting healthcare facilities with clearinghouses, insurance companies and government agencies.

A successful revenue cycle management (RCM) achieved through an EHR system relies on flawless processing from patient registration to payment clearance. Broadly speaking, there are four major steps (shown in the figure), which complete this cycle.

Revenue Cycle Management achieved through EHR

Patient registration is the first critical step in revenue cycle management. This is where insurance information of the patient is checked. Integrated patient portals have made it possible to schedule appointments before actual visits, which help providers who use an EHR system to make certain decisions and verify information in advance. However, most of the required information is entered in the EHR database on the actual visit. It is critical to check a patient’s ledger and previous billing history for a proper follow up.

Eligibility and authorization of the patient can be checked in a few clicks using an EHR system. After entering the initial information, the provider can electronically check a patient’s insurance plan and information about family members covered under the plan. One can check the benefits and services that the patients are allowed to get under their plan.

Payments are denied when the provider bills for a treatment that is not authorized by the insurance company for the service. This denial adds up cost and time for the payment to reimburse. Using an EHR system, the provider can perform an authorization check.

Coding of CPT Service & Diagnostic procedures is something that has baffled healthcare providers until now to receive payments without any objection. When sending a claim for payment, they must use the standard codes for their service and treatment. EHR applications have automated this difficult step by intuitively entering the corresponding codes. Currently, EHR systems are upgrading to HIPAA 5010 system for electronic data interchange.

Billing & Payment Posting is the final stage that completes the revenue management cycle. Billing companies and solutions had been operating long before EHR systems came into existence. Now integrated in EHR applications, bills are electronically sent and updated. On successful remittances, providers are notified and EHR applications update full transaction history on appropriate panels.

EHR systems have automated revenue cycle management (RCM) and now accurate coding and billing requires no additional services of a costly consultant in the field, hence, providing an intelligent solution to healthcare management and physician practices to cash on the nail.