Introduction to Reimbursement and the Revenue Cycle

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Reimbursement and the Revenue Cycle
Healthcare reimbursement refers to the payment that the healthcare service provider, such as hospitals and diagnostic facilities, receives for providing the service. In most instances, the healthcare insurer pays for either all or part of healthcare costs (Felman, 2021). The amount offset by the insurer depends on the specific plan that the patient belongs to. The patient may be responsible for some of the costs in some plans as the insurer covers the rest. If the patient does not have any insurance coverage at all, they may be responsible for reimbursing the healthcare providers for the whole services they receive.
In most cases, the patient reimburses the institution after receiving the medical services. After the patient receives the services, they send the bill to their insurer to offset the costs. The amount charged on the system depends on the services that the patient has agreed with the service provider. Private insurers usually negotiate their own reimbursement rates with their providers and the hospitals. Certain private insurance companies do not reimburse the service providers enough, unless in emergency cases. Therefore, the service provider needs to understand the type of insurer they are dealing with before rendering the services.
Once a doctor accepts the patient's insurance services, the payer's reimbursement for that said service has been agreed upon. The doctor will accept it and provide the services without any extra costs beyond what the patient is insured for and willing to pay. Balance billing occurs when the healthcare service provider opts to bill for an additional amount unless they were informed before time about the additional services. Therefore, under normal circumstances, balance billing is illegal. When the patient requires additional services not included in the insurance, they may have to pay out of their pockets. In such cases, the healthcare service provider is allowed to make such deductions.
If the services are provided to the patient, but the payments are not remitted, the payer should communicate the reason for the reimbursement rejections through the remittance advice codes. These codes include a brief explanation of why the payment was not remitted. The provider is then expected to review the codes and assess whether they can correct and resubmit the claim or bill the patient. For example, in some cases, payers may reject services that are not supposed to be billed together during a single visit. In other instances, they may reject the request for reimbursement because of lack of medical necessity or because the said services occur in a specific timeframe after a specific procedure. Other rejections could be linked to non-coverage or many other reasons. Therefore, the healthcare service provider should follow up with the insurer to understand why the claim was not reimbursed or bill the client.
The revenue cycle is as follows:
19240506985Customer Service Department00Customer Service Department
26289001339850
19335757620Accounting and Finance Department00Accounting and Finance Department
center1422400
1943100219710Receipt of Healthcare Services00Receipt of Healthcare Services
26289001822460
1962150201295Payment of the Services in the Accounting Department00Payment of the Services in the Accounting Department
Department Impact on Reimbursement
Reimbursement is a crucial element in a healthcare organization. The profitability of a healthcare facility significantly depends on the effectiveness of its departments in managing the reimbursement process (Eldenburg et al., 2017). Therefore, the Adventist Hospital needs to develop an effective and efficient management scheme of its reimbursement process. Poor management will reduce its ability to offer excellent and reliable healthcare services because of insufficient funds. The management should ensure that all departments are effective at what they do in facilitating the reimbursement process. Each department plays an essential role in influencing the reimbursement process in terms of time and money. Therefore, they are subject to the auditing process to determine whether they have met their objectives.
Auditing enables any organization to review its operations and determine any inconsistencies that may ultimately affect its performance. In the case of Adventist Hospital, the type of audit that the institution can conduct is the internal departmental audit to ensure that each department meets the requirements to ensure that the reimbursement process sails through effortlessly. In assessing the role of the various departments on pay-for-performance incentives, the hospital to apply a goal assessment approach. The technique requires that the hospital sets departmental objectives and assess how the incentives contribute to achieving these goals. Therefore, the hospital will have to evaluate the departmental performance before implementing the pay-for-performance incentives. The hospital will then conduct a similar assessment after introducing the service to assess the change in performance of the department.
The Adventist Hospital has several departments that play different roles in ensuring that the institution attains the necessary efficiency in service provision. The clinical service unit is one of the main divisions at the facility that provides care to the patients. This department is responsible for noting down the service providers and the type of services rendered. The details that this department captures are transferred to subsequent departments for processing. Therefore, if the department captures wrong patient details, such mismatches can delay the reimbursement process. Another major department is the health information management unit responsible for coding the patients' medical information. Any error in the coding process can also lead to patient information mismatch, leading to wrong diagnosis and delays in reimbursement. The last is the administration department, which is responsible for reviewing the financial transactions at the institution. Any form of inefficiency from this department can also interfere with the reimbursement process.
The department responsible for compliance with the billing and coding practices is the administration department. The department has a group of reimbursement experts who evaluate the institution's billing activities and compliance with the required standards. This department's operations are core to the reimbursement success of the company by identifying any risks or gaps in the information that the client provides. The department also advises the firm on high-risk insurers and compels such institutions to pay the funds without failure. Therefore, the department plays a central role in the hospital's reimbursement process.
Billing and Reimbursement
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