Financial Resource Management and Healthcare Reimbursement

Financial Resource Management and Healthcare Reimbursement
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Institution of Affiliation
Date
Financial Resource Management
Within the healthcare environment, many factors need to be considered when examining organizational finances and making financial decisions that will have both short- and long-term effects on an organization or medical practice. External agencies such as state government or the federal can set rate limits that influence revenues. Besides, there are external forces such as marketing structures and competition that affect the pricing of healthcare services. Managers, who oversee budgets and help to make financial decisions need to understand the forces shaping this environment; henceforth, the study focuses financial resource management and healthcare reimbursement in the healthcare sector.
Part A: The impact of coding and billing cycle processes on revenue cycles of a healthcare organization
The healthcare revenues cycles process embraces collecting payments, tracking claims, coding claims, determination of patient eligibility, following up denied claims and collecting co-pay (Burns, 2012). Therefore, the efficiency of coding and billing cycle processes in medical practice operations have critical impacts on financial performance. So as to manage the patient revenue cycle of a medical practice efficiently, the organization has to adopt and implement a proper coding and billing software or a practice management software. This software facilitates tracking of the claims; hence, enhancing management of health organization revenue cycles (Bucci, 2014). Additionally, proper coding and billing processes improve communication within staff members and alleviate poor workflows. This is because the processes make communication between office managers and physicians open, for instance, financial records become easily accessible and can successfully lessen complications in the revenue cycle. On the other hand, proper coding and billing processes enhance tracking claims and eligibility of a medical office; hence, enhancing smooth workflow in all sectors.
Part B: Impacts of Operating Revenue on the Revenue Cycle
Healthcare facilities usually record revenues once services rendered on credit are completed because they expect to bring together returns earned through these services (Burns, 2012). Credited services are not complete until an organization either gets the cash or term it as a bad debt. This plus the collection and recording of cash payment is termed as operating revenue. A proper revenue collection process includes an appropriate compliance and coding model, consolidated practice management, transparency, coding and compliance (Bucci, 2014). Measures that will ensure appropriate visibility of front-end process which affects revenue cycle directly. The principles exercise appropriate influence on issues regarding the revenue cycle procedures and processes not only within the coding and billing office but all across the broad and at times a bureaucratic organization.
Part C: Explain how to evaluate the financial condition of a healthcare organization?
Healthcare organizations provide a substantial amount of care to all vulnerable patients irrespective of whether they are assured or uninsured. Although treating such patients is the core mission of all medical facilities, doing so will pose problems for their financial solvency because much of their services may be uncompensated in the long run. Hence, need for an appropriate revenue collecting strategy, data source, and record. Moreover, measures are required to understand the financial status of a hospital. One of the measures is evaluating the financial conditions of a healthcare organization which involves No-payment analysis, knowing your cost, benefit analysis, and performance analysis. The purpose of a No-payment analysis is to identify bad debts, the reason why they exist and their trend, are they increasing or decreasing (Muschler, 2016). Knowing your cost is vital in the assessment of the revenue collection process and determining its performance (Needleman, 2014). Each time a healthcare organization looks at the expense of conducting an evaluation, it must also recognize its potential benefits; hence, the terms benefit analysis (Muschler, 2016). On the other hand, performance analysis consists of the assessment scheme that enhances the comprehensive review of the impacts of both traditional and new stratagems in the revenue cycle.
Q 1: Explain how financial statements are reviewed for an organization to determine its profitability and risk?
Financial statement analysis is the best approach in determining profits and risks of any health organization (Dietrich & Anderson, 2012). It provides a reliable method of reviewing financial statements. Financial statement analysis includes purposes and considerations of ratios and ratio analysis, performance analysis horizontal analysis and vertical analysis (Needleman, 2014). Purposes and considerations of ratios and ratio analysis are primarily used to compare financial figures over a period. And this is what other intellectuals term as trend analysis. Through it one can identify risks and trends; henceforth, adjust accordingly. The types of ratios analyzed include income, profitability, liquidity, bankruptcy, leverage and long-term analysis. Performance analysis consists of the assessment scheme used in reviewing financial statements. Financial analysis ensures that revenues and expense balance and adequate resources (the financial records) are available for future reference. Horizontal analysis is the assessment of the company’s financial information over a number of reporting periods. On the other hand, the vertical analysis is conducting within a single period. Both vertical and horizontal analysis can identify risks in the revenue cycle; hence, calling for an appropriate action.
Q 2: Factors that influence the financial viability of a healthcare organization.
Financial sustainability of a health-care organization is influenced by coding and billing cycle processes, performance analysis and financial statement analysis. Coding and billing embrace collecting payments, tracking claims, coding claims, determination of patient eligibility, following up denied claims and collecting co-pay (Burns, 2012). Thus, coding and billing processes provide primary resources for financial analysis; hence, enhancing financial viability. On the other hand, performance analysis scrutinizes one or more financial procedures determining whether they are sound or not; hence, raising the alarm where necessary. Financial statement analysis assesses cash flows, profits, and risks; hence, determining the efficiency of a financial process. It can also be used in determining the most efficient financial process for a health...