Why Getting a Handle on Revenue Cycle Management Matters
At its core, behavioral health is a form of healthcare that seeks to include patient well-being by understanding and treating the link between behavior and human thought. But the way our healthcare system works makes it impossible for behavioral health providers to ignore the business aspects of what they do. Enter the revenue cycle management (RCM) concept.
Effective behavioral health RCM is rooted in understanding that it is okay to want to get paid. Your facility or organization provides valuable services. Those services cost money. Likewise, you don’t do what you do out of purely altruistic motivations. And if you do not get paid for what you do, you will have to stop doing it.
With all that said, our role within behavioral health management affords us the opportunity to see when our partners are struggling to get a handle on their RCM. If you don’t understand why it matters, this post should clear things up.
Basic Concepts of RCM
In its most fundamental sense, RCM is the process of identifying revenue streams, maximizing those streams, and managing collections effectively. The better the revenue cycle is managed, the better an organization’s financials.
Behavioral health RCM is a bit more complicated because it goes above and beyond financial transactions. Behavioral healthcare involves patients, clinicians, facilities, and payers. And, because patients and payers are not always the same entities, there are additional layers to think about.
Insurance Changes the Equation
Proper RCM matters in behavioral health thanks to the way providers get paid. Simply put, insurance changes the equation. If you are not sure why, compare the way patients pay for healthcare services to how they buy products online or in stores.
Shopping online is pretty much a cash-and-carry experience – even when customers use credit cards. The retailer gets paid immediately and at full price. That is not how it works in healthcare. You know why: insurance carriers act as intermediaries that may, or may not, reimburse providers at full price.
In addition, there are layers of digital paperwork that go into getting paid. Clinicians are required to utilize certain forms. They bill using medical billing codes. Incorrect or misapplied codes can lead to claim denials. Capping it all off is the extra time it takes to get reimbursed by an insurance carrier.
Revenue Streams Are Often Interrupted
All of this leads to the reality that revenue streams are often interrupted. Whether there is a mistake in the billing department, or an insurance carrier is simply falling behind doesn’t matter as much as the facility or clinician not getting paid. And, because revenue streams are so delicate, it is critical that providers manage their revenue effectively.
Behavioral health RCM recognizes that every dollar is important. It recognizes that there will be ebbs and flows in revenue streams. Most importantly, effective RCM seeks to prevent unnecessary losses that otherwise occur with poor management practices.
Every Dollar Counts
Our position as a behavioral health management leader is pretty simple: every dollar counts. RCM is critical within behavioral health because providers cannot afford even minor losses. The margin just isn’t there. Organizations do not have the luxury of absorbing losses as a normal part of doing business.
How is your organization doing with behavioral health RCM? If there is room for improvement, there’s no better time than right now to start working on changes. Do not be ashamed of the fact that your organization needs to make money in order to survive. If you want to continue treating patients, you need to get a handle on your revenue. The best way to do that is through sound RCM practices.