Revenue Cycle Management by RCMLogic360

Patient registration is the first and one of the most important steps in the medical billing cycle, because any errors here can cause claim denials or payment delays.

 Here’s a breakdown of Patient Registration Process:

• Patient Demographics Collection
• Insurance Information
• Guarantor / Responsible Party

Eligibility & Benefits Verification is the second critical step in the medical billing cycle after patient registration. This process ensures that the provider will get paid by confirming the patient’s insurance coverage before services are rendered.

 Here’s a detailed breakdown:

• Patient's Insurance Verification
• Benefits Verification
• Patient Responsibility Check
• Plan Type & Provider Plan Pariticipation Verification.

A referral is when a Primary Care Physician (PCP) directs the patient to see a specialist or obtain a service.
 

• Common in HMO plans.
• Without a referral, the claim may be denied as “out of network / not medically necessary.”

Prior Authorization is advance approval from the insurance company before certain services are provided. Like;

• Surgeries 
• High-cost imaging (MRI, CT, PET scans)
• Specialty medications
• Physical/occupational therapy
• Durable Medical Equipment (DME)

Key Details To Verify;

• CPT/HCPCS codes for the procedure/service
• Diagnosis codes (ICD-10) supporting medical necessity
• Number of visits/units approved
• Authorization number and expiration date

Process of Encounter Coding

• Provider documents patient visit (encounter notes). 
• Coder reviews medical record for diagnoses, procedures, and services.
• Assign appropriate ICD-10, CPT, and HCPCS codes along with relevant Modifiers, POS, TOS codes and add Fee from the Fee Schedule.
• Link diagnosis codes to procedure codes (to justify medical necessity) LCD guidelines in case of Medicare.
• Check compliance with payer-specific rules (Medicare, Medicaid, private insurers).
• Enter codes into the Practice Management/EHR system for creation of Financial Visit.

Claim scrubbing is the process of checking medical claims for errors or inconsistencies before sending them to insurance payers.

• Ensures clean claims (error-free) are submitted.
• Increases first-pass acceptance rate.
• Reduces denials and rejections.

What Gets Checked in Claim Scrubbing?

• Patient & Provider Info (Eligibility Responce information)
• Encounter Coding Accuracy (ICD-10, CPT, Modifiers) with utilization of LCD Guidelines, NCCI & MUE Edits.
• Payer-Specific Rules
• Billing Rules

Claim Submission is a process of sending  clean, error-free claim to the insurance payer (Medicare, Medicaid, or commercial insurance) for processing and payment within the timely filing limit of each payer.

Methods of Claim Submission

• Electronic Claim Submission (EDI – 837P/837I transactions)
   

Most common, faster & HIPAA compliant.

Sent via clearinghouse or directly to payer.

Formats:

837P → Professional claims (individual providers)

837I → Institutional claims (hospitals, facilities)

Paper Claim Submission

Standard forms:
 

CMS-1500 → Professional claims

 UB-04 (CMS-1450) → Institutional claims 

An EDI Rejection happens when a claim is rejected by the clearinghouse or payer’s EDI system before entering the payer’s adjudication system.

Rejected ≠ Denied → It means the payer never received the claim for processing.

Causes of EDI Rejections

• Patient Information Errors
• Provider Information Errors
• Coding Errors
• Claim Form Errors
• Payer-Specific Rules Violation

How We Handle EDI Rejections

• Review rejection reports on daily basis
• Identify error codes e.g., AAA – Patient not eligible, 2000C loop errors, etc.
• Correct the data (update demographics, codes, NPI, etc.)
• Resubmit claim electronically (no appeal needed, since it was never adjudicated)
• Track and monitor to avoid repeated rejections.

Difference Between EDI Rejection & Claim Denial

EDI Rejection → Caught before payer adjudication (at clearinghouse or EDI check). Claim was never processed.

Claim Denial → Claim was accepted and processed by payer, but payment denied (e.g., not medically necessary, no coverage).

Payment Posting is the process of recording payments received from insurance companies and patients into the Practice Management (PM) or EHR system.

• ERA Posting (Electronic Remittance Advice) – automated, electronic payment details from payers.

• EOB Posting (Explanation of Benefits) – paper-based statement from payer.

• Patient payments – via cash, check, credit card, or payment portal.

Process of Payment Posting

• Match payment to correct patient account & date of service.
• Apply insurance payment to respective CPT line items.
• Record adjustments (contractual write-offs, discounts).
• Transfer remaining balance to patient responsibility (if applicable).

Components of Patient Responsibility

• Copay – fixed fee collected at time of service.
• Deductible – amount patient must pay before insurance covers.
• Coinsurance – percentage of service cost patient pays after deductible.
• Non-covered services – procedures not included in the plan.
• Denials shifted to patient (e.g., out-of-network, non-authorized services).

A Patient Statement is a bill sent to the patient, showing what the insurance paid, adjustments, and what the patient owes after claim adjudication.

Process of Generating Patient Statements

• Insurance claim is processed & Payment posting & denial posting completed.
• Remaining balance assigned to patient responsibility.
• Billing system generates a statement (paper or electronic).
• Statement is mailed/emailed/posted to patient portal.
• Statement is resent if payment not received every 30, 60, 90 days.
• Collection Letters after 3 statements are sent and/or patient calling.

Accounts Receivable (A/R) is the money owed to the provider by payers for services rendered.  Claims are automattically moved to AR if remain unpaid for 30 days after submission.

• Setup Auto claim status via clearinghouse.
• Contact payer (via Web Portal, IVR or Call) for delayed claims if no responce from Auto Claim Status.
• Prioritize high-dollar & old claims first.
• Escalate if claim stuck in review or pending status.
• Document follow-up notes in billing software.
• Set tickle date for next followup.

Denial Management is the process of analyzing, correcting, and resubmitting denied claims to recover revenue.

• Identify Denial Reason From ERA/EOB denial codes (CARC & RARC codes).
• Categorize Denials to Soft Denials (fixable, can be resubmitted) & Hard Denials (non-payable, cannot be reversed — e.g., non-covered service).
• Correct & Resubmit, Fix coding, attach documents, add missing authorization/referral & Resubmit claim or file an appeal within payer’s deadline.
• Regularly, Run Root Cause Analysis to Identify trends (e.g., frequent modifier errors, eligibility issues) & enhance workflows to prevent future denials.
• Setup CARC & RARC Automations to handle regular denials and automated categorization of denials.

KPIs are Key Performance Indicators in Revenue Cycle Management process, these are the most important metrics that billing companies can track and report back to practices for improvement in existing workflows.

Financial KPIs

• Days in AR (Benchmark: 40 Days)
• Net Collection Rate (Benchmark: > 95%)
• Gross Collection Rate (Benchmark: > 90%)
• Bad Debt/Write-off Percentage (% of charges written off as uncollectible)

Claims & Denials KPIs

• First Pass Claim Acceptance Rate
• Denial Rate
• EDI Rejection Rate
• Resolution Rate of Denials

Patient Collection KPIs

• Patient Responsibility Collection Rate
• Time to Patient Pay
• Statements to Collection Ratio

Monthly Reports Provided to Practices

• Productivity Report (Patient Seen, Procedures Billed, claims submitted, payments collected, DAR trends)
• Payment Posting Report (insurance vs patient collections)
• Patient Statement Report (outstanding balances)
• Denial Report (by reason, payer, provider)
• AR Aging Report (0–30, 31–60, 61–90, 90+ days)