This phase covers all activity related to claims management and collecting payments from both health insurance companies and patients based on their financial responsibility.

A medical bill begins as a claim, which contains all information necessary to receive payment for the services rendered by a healthcare organization, including patient demographics, medical codes and charges. The claims management function involves reviewing each claim for accuracy and submitting claims to the appropriate payors for reimbursement.

Revenue cycle teams monitor the status of submitted claims to ensure they collect the money owed for accounts receivable (AR) in a timely manner. The accuracy of the claim, effectiveness of AR follow-up and scrutiny of remittance (or payment received) all impact the speed and accuracy of insurance reimbursement.

Payment delays can occur because of issues like claim denials and underpayments, which cause costly rework to be resolved. Claim rejections and denials occur when the payor disagrees with the charges or requires more information or different submission specifications to process the claim.

Underpayments occur when payors don’t reimburse the full amount owed for services rendered or when providers commit coding or documentation errors that lead to incomplete or incorrect billing for the delivered care.

Once insurance has paid its portion of the claim, remaining patient balances are routed to teams that specialize in collecting patient payments. If patient collections are unsuccessful after a certain period, they are often referred to a debt collection agency, and the balance is considered bad debt.

Specific revenue cycle functions in the Medical Billing and Collections process include:

• Claims Management
• Billing
• Insurance Accounts Receivable
• Patient Financial Services
• Denials Management
• Underpayment Recovery
• Bad Debt Collections