Much of what happens in healthcare is about understanding the expectations of the many departments and personnel within the organization. Reimbursement drives the financial operations of healthcare organizations; each department affects the reimbursement process regarding timelines and the amount of money put into and taken out of the system. However, if departments do not follow the guidelines put into place or do not capture the necessary information, it can be detrimental to the reimbursement system.
From the moment you make an appointment to see your physician, the provider needs to track all of the financial elements involved in providing care. Medical billing software is one component utilized to track the financial elements, from verifying insurance coverage and determining copayments, as well as sending claims electronically to various third-party payers. Revenue cycle management (RCM) describes the combined administration of these essential financial processes.
An important role for patient financial services (PFS) personnel is to monitor the reimbursement process, analyze the reimbursement process, and suggest changes to help maximize the reimbursement. One way to make this process more efficient is by ensuring that the various departments and personnel are exposed to the necessary knowledge.
For your final project, you will assume the role of a supervisor within a PFS department and develop a white paper in which the necessary healthcare reimbursement knowledge is outlined. In Milestone One, you will take a closer look at how reimbursement impacts other healthcare departments, and you will dive deep into analyzing the revenue cycle, utilizing data, tracking records, and ensuring compliance within individual departments.
Pay-for-performance is a requirement for Medicaid Managed Care, Medicare, and commercial plans, requiring reporting on quality outcomes.
Reimbursement and the Revenue Cycle
Describe what reimbursement means to a healthcare organization. What would happen if services were provided to patients but no payments were received for those services?
Illustrate the flow of the patient through the cycle from the initial point of contact through the care and ending at the point where the payment is collected
Departmental Impact on Reimbursement
Many different departments utilize reimbursement data in a healthcare organization. It is crucial the healthcare organization monitors this data. What impact could the healthcare organization face if this data were not monitored? Describe why collecting data is required for pay-for performance incentives.
Describe the activities within each department in a healthcare organization for how they may impact reimbursement. What specific data would you review in the reimbursement area to know whether changes were necessary?
Identify the responsible department for ensuring compliance with billing and coding policies. How does this affect the department’s impact on reimbursement in a healthcare organization?
Reimbursement and the Revenue Cycle
What Reimbursement Means
Reimbursement is the process by which healthcare organizations receive payment for the medical services they provide to patients. It is the core financial driver, converting clinical services into tangible revenue. The reimbursement process is what allows an organization to cover operational costs, pay staff, purchase new equipment, and invest in facility improvements. Without it, the organization would be unable to sustain itself.
If services were provided to patients but no payments were received, the consequences would be catastrophic. The organization would face immediate cash flow crises, rendering it unable to pay salaries, utility bills, or suppliers. The lack of revenue would halt all operations, potentially leading to bankruptcy and the inability to provide care to the community. In essence, the entire healthcare delivery system would collapse, as it relies on this continuous financial cycle to function.
Illustrating the Revenue Cycle Flow
The patient's journey through the healthcare system is directly intertwined with the flow of the revenue cycle. It begins at the first point of contact and ends only when payment is collected in full.
Pre-registration/Scheduling: The cycle begins when a patient books an appointment. At this stage, demographic and insurance information is collected, which is critical for future billing.
Patient Registration: Upon arrival, the patient's information is verified. This includes confirming insurance eligibility, verifying coverage, and collecting co-payments. Errors here can lead to claim denials later on.
Charge Capture: This is the process of translating every service provided—from a physician's consultation to a lab test or a simple bandage—into a billable charge. This is a crucial step that directly links clinical care to financial records.
Coding: Medical coders translate the patient’s diagnosis and the services provided by clinicians into standardized codes (ICD-10, CPT, etc.). Accurate coding is essential for a clean claim submission.
Claims Submission: The coded information is compiled into a claim form, which is submitted electronically to third-party payers such as Medicare, Medicaid, and commercial insurance companies.
Claims Adjudication: The payer reviews the claim to determine if the services are medically necessary and if they are covered under the patient's plan. They then process the payment.
Payment Posting: Once the payment is received, it is posted to the patient’s account.
Denial Management and Patient Follow-up: If a claim is denied, the PFS department must investigate the reason, correct any errors, and resubmit the claim. Any remaining balance after insurance payment is then billed to the patient.
Sample Answer
White Paper: The Interdepartmental Impact on Healthcare Reimbursement
From the Office of the Supervisor, Patient Financial Services
Introduction
In the modern healthcare landscape, a seamless and efficient reimbursement system is not merely a financial convenience—it is the lifeblood of an organization. As a supervisor within the Patient Financial Services (PFS) department, I recognize that the revenue cycle is a complex, interconnected process that involves every department and staff member. The financial health of our organization hinges on our ability to accurately track, document, and bill for every service we provide. This white paper serves as a guide to understanding the profound impact each department has on reimbursement, detailing the crucial data points to monitor and highlighting the importance of compliance for maximizing revenue and ensuring the sustainability of our operations.