Healthcare Financial Resource Management

Healthcare Financial Resource Management
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* Activities of each step of the revenue cycle in order
The initial step of the revenue cycle is preregistration, which is the most crucial step. Here, the front office personnel collects a patient’s demographic and insurance information and eligibility for coverage. It is then passed to the patient’s insurance provider, who discusses the patient’s coverage, deductibles, co-payments, or co-insurance. Also, the data is disseminated throughout the practice management system (Moheiser &Tolliver, 2020, pp. 10-15).
The second step is registration. During registration, the health personnel verifies that a patient’s address, contacts, date of birth, underwriters, and insurance information are correctly and appropriately secured. The co-payments are collected, authorization is given for specialist treatment, signing financial forms, and assigning insurance benefits. Charge capture is the third step. Here, charges are entered in the bill after services are rendered and submitted to the insurance provider for reimbursement (Moheiser &Tolliver, 2020, pp. 10-15).
The fourth step is claim submission. It involves the provider sending the bill to the insurance provider after charges are entered. The revenue cycle employees go through the bill and assign CPT codes and diagnosis codes to help identify and track. The team conducts claim scrubbing to ensure they are error-free and go through the insurance carrier system fast (Moheiser & Tolliver, 2020, pp. 10-15). Moreover, they track the claim’s report to see whether it was sent, when it came back, or whether it was rejected.
Remittance processing is the fifth step of the revenue cycle. The revenue cycle team sends out the claim and waits to get paid. At this point, the institution and the insurance company agree on a contract on what to cover. The team keeps an eye on the remittance process to ensure they catch any response, such as errors made or rejection of the claim, and files an appeal. The step also conducts contractual and non-contractual write-offs.
The next step is insurance follow-up. The health institution evaluates the receivables to determine what has been paid and what has not. Also, it considers whether the insurance follow-up team is well-trained, the process is efficient, or whether immediate steps need to be taken to fix the situation. The final step is patient collections. The front desk personnel collects money from patients as they get their services and sends out periodic patient statements (Moheiser & Tolliver, 2020, pp. 10-15).
1 Description of the responsibilities of health information management staff members at every step of the revenue cycle in which they are involved.
Health information management professionals engage in various functions of the revenue cycle. The preregistration step provides the data that outlines the procedure prices shared with self-paying clients once they make an appointment. The professionals counsel all patients on the institution’s financial process of getting services (Moheiser & Tolliver, 2020, pp. 10-15).
In the registration step, the staff takes down all the patients’ information and manages patient encounter data to ascertain its accuracy. Next, the team organizes to see a doctor and evaluate patients’ preadmission testing to determine the level of care each patient will require (Moheiser & Tolliver, 2020, pp. 10-15). In the charge capture step, they utilize patients’ data to enter charges into their bill and electronically transmit it to the insurance company for revenue release.
In the claim submission step, they utilize vital tools such as edits in billing and cleaning services to ensure the data is accurate and clean for faster payments. In addition, logistics expertise aggregates all customer bills and tracks the claims. Also, they utilize coding knowledge to develop the CPT and diagnostic codes, which are used to track the different claims throughout the cycle (Moheiser & Tolliver, 2020, pp. 10-15).
At the remittance processing stage, a revenue manager works with insurance companies to negotiate contracts and outline the allowable. Then, the staff keeps track of the claims to identify problems with claims immediately and launch an appeal. Additionally, they conduct annual reviews of their fee schedules to align them with the allowable and contracts with insurance companies.
At the insurance follow-up stage, the revenue managers go through all the claims paid and assess the unpaid ones. Next, they conduct insurance follow-ups to determine what aspects in the cycle contributed heavily to the denied claims and what can be done about them. In the final stage of patient collections, front desk staff collect money from patients and prepare and release patient statements (Moheiser & Tolliver, 2020, p. 18).
2 How coding & billing cycle processes impact healthcare organization revenue cycles.
The accurate documentation of a patient’s information provides essential clinical data. In addition, the data provides sufficient proof to validate reimbursements to insurance companies in case questions come up. Hence, by pulling out billable data from patients’ medical records and accurately coding them depending on the claim being made, clean claims are submitted to insurance companies and processed promptly, ensuring practice is always paid. Additionally, the different codes such as ICD10 diagnosis codes, CPT, and HCPCS procedure codes are utilized to separate the different data for various claims (Ferenc, 2014, pp. 138-142). Consequently, this increases clean claims, maximizing the number of reimbursements.
Medical billing begins once a patient makes an appointment. During these visits, details of self-paying patients and those who will partially pay their bills should be collected. Also, their financial responsibilities are confirmed. Thus, all this information is organized in a billing system to produce a ‘superbill’ sent to the patient. Billing also ensures that employees collect payments at the end of a patient’s appointment and submit them to the accounting department (Ferenc, 2014, pp. 155-157).
3 How the operating revenue impacts the revenue cycle
According to Moheiser and Tolliver (2020, pp. 58-62), a healthy operating revenue enables a healthcare practice to provide the best care. Healthcare institutions require supplies, personnel, machines, drugs, among others, to successfully run, attained by having a solid flow of income. Thus, by having all claims paid promptly and patients paying their bills, a practice can open its doors and provide the best care possible.
An operating revenue creates a strong bond with patients. They are notified of their financial responsibilities to the healthcare provider through conclusive information, so they make prompt payments. Insufficient information creates a pull and push struggle for patients to pay their bills, injuring the bond. Moreover, suppose the operating revenue is affected. In that case, medical professionals cannot keep their doors open or provide a high level of care, which results in their patients leaving, further affecting the bond.
* How to evaluate the financial condition of a health organization
Analyzing financial statements is one of the ways to evaluate a health organization’s financial conditions. Financial statements such as balance sheet, income, and cash flow statements reveal the fiscal health of health institutions. In addition, the documents prepared using accurate and timely information of the business’s accounts reveal operation outcomes and provide valuable information about assets such as liabilities, revenues, and expenses made by the organization (Stobierski, 2020). Thus, one can monitor performance and develop ideal strategies for continued growth.
1 How financial statements are reviewed for an organization to determine its profitability and risk
Ratio analysis is utilized to review an organization’s profitability and risk. Ratio analysis carries out profitability ratios to determine how an institution’s profits relate to its sales, equity, or stock value. The ratio assesses how well the institution utilizes its resources to generate profits and its management (Gitman et al., 2018). The profit margins are measured and established through the net profit margin, return on equity, and earnings per share. On the other hand, debt ratios are ideal for establishing an institution’s risks through its financial statements. Debt ratios show the extent and effects of the institution utilizing borrowed money to finance its daily operations. Thus, one can determine how debt and equity make the institution healthy and the risks that may arise if it relies on too much debt (Gitman al. et., 2018).
2 Factors that influence the financial viability of a healthcare organization
The following factors impact a health organization’s ability to generate sufficient income to cover its financial commitments. Geography is one of the factors. A hospital located in areas with less competition from other hospitals or medical staff enjoys control of the market and has a higher chance of remaining afloat. Payer reimbursement is another factor to consider. Being in a reasonable reimbursement market that comprises government institutions and private contractors ensures that an institution has multiple avenues of reimbursements (Saviano et al., 2018, pp. 3548-50). Thus, when one is delayed, they can comfortably continue offering services.
The cost structure is another influence on financial viability. An institution with high-cost structures due to high operation costs, employee costs, or debts affects its financial viability by making them susceptible to bankruptcy. Such high prices make them unable to cover basic costs or increase patients’ bills, making most of them look for other hospitals (Saviano et al., 2018, p. 3549). Management has a significant influence on the financial viability of a health institution. A gifted man...