Revenue Cycle Management
Cycle overview
The revenue cycle runs from scheduling and registration through coding, charge capture, claim submission, payment posting, denial management, and collections. Front-end errors such as eligibility, demographics, and insurance verification create denials that are expensive to fix later. Clinical documentation integrity supports accurate code assignment and severity capture.
Reimbursement methods
Inpatient acute care is largely paid by MS-DRG; hospital outpatient by APC; physician services by RBRVS. Other models include per diem, case rates, capitation, and fee schedules. Case mix index reflects the relative resource intensity of a hospital's patients. Understand chargemaster maintenance, payer contracts, coordination of benefits, timely filing, and clean-claim rates.
Key metrics
Days in accounts receivable, gross and net collection rates, denial rate, first-pass claim acceptance, and cost to collect. Medicare and Medicaid have distinct billing rules, and NCCI edits bundle services that cannot be billed separately.
Worked example
If a hospital has 2.4 million dollars in gross A/R and average daily charges of 80,000 dollars, days in A/R = 2,400,000 / 80,000 = 30 days. Lower is generally better, but compare to payer terms.
Trap
Questions often confuse DRG (inpatient) with APC (outpatient) or assume a charge equals payment. Charges are set by the chargemaster; payment follows the contract.