What is the Revenue Cycle?

By Ananth Seshadri4 min read · Posted Nov 24, 2022

301
Views

According to DeVry University, the revenue cycle is “the process of tracking and analyzing revenue received from patients during the course of their care process.” The cycle revolves around 7 steps, starting from the booking of appointments and concluding when the final costs of a patient’s care are eventually paid. In this article, I will describe the 7 steps of the revenue cycle and its overall functions.

The 7 Steps of the Revenue Cycle

Step 1: Preregistration

Preregistration is the most important step in the Revenue Cycle, as it solidifies the finances of the patient while preventing any questions about payment. Patients, either in-person or through the phone, provide information regarding their demographic, insurance, and clearing house eligibility. These pieces of information go to the patient’s healthcare insurance, which provides the patient’s coverage, co-payment, co-insurance, deductible, and potential referral. Usually, during this process, the medical providers can examine the patient's financial expectations and potential costs, as well as other factors including payment time and potential policies regarding cancellation, postponement, or the case of not showing up. Finally, these steps culminate in the patient scheduling an appointment.

Step 2: Registration

After the pre-registration is completed, the registration process starts off by ensuring the validity of the patient’s phone number, address, birth date, guarantors, and information regarding their insurance is correct. These pieces of data are normally collected after each time a patient is treated. After the patient provides and validates the necessary information, the providers have to ensure that they have received all of the proper information, which is then used to make co-payments. However, if a potential specialist is needed, then a referral or authorization is needed to treat the patient.

Step 3: Charge Capture

When the process of registration is done, charge capture is initiated, which can be done in 2 ways. The first way it can be done is through automation, in which information is automatically input into the medical providers’ billing system, which can also be based on the documentation they put in. However, some companies prefer to complete the charge capture process in a more out-of-date manner, using staff at the front billing desk to manually input information.

Step 4: Claim Submission and Medical Coding

After getting the charges, the medical provider’s revenue cycle staff will look at the charges, along with other medical codes, most notably the CPT and the Diagnosis code, which will question whether the medical procedure will correspond with the diagnosis. When there is more than one code provided, they must be separated in order to be coded correctly. After this has been completed, a process known as claim scrubbing will be initiated in order to ensure the accuracy of the code and whether they are going to the insurance provider correctly. The more efficient the process is, the quicker the insurance carrier payment will be. In general, the process revolves around sending claims from the medical management into mailrooms, known as clearing houses, which would then be sent to different payers. This leads to the creation of 2 reports: the transmission report, which identifies the claim sent and dropped, and the rejection report, which finds inaccurate medical codes.

Step 5: Remittance

After a medical practice’s claim has been sent, the process of remittance begins, which displays the benefits and service payments. Furthermore, allowables are agreed to during this time, which are the prices that were agreed upon by the provider and the patient. Adding on, fee schedules are also implemented, which represent the amount a provider charges per service. The final part of the remittance process is write-offs, both contractual and non-contractual. Contractual write-offs are inevitable, as they show the rates contracted by the patient and provider, whereas it is possible to avoid non-contractual write-offs, which normally occur when the provider’s revenue cycle system undergoes a stage of inaccuracies.

Step 6: Insurance Payment and Follow-Ups

During this time, medical providers look at the payments that have and have not been made. In order to do this, account receivable, or A/R, reports or creates to highlight the amounts of money that have been paid off by the insurance and/or patient and how much is remaining. This process will justify the validity of the insurance follow-up process and whether there are not any inaccuracies going through it.

Step 7: Patient Payments and Collections

The final step of the revenue cycle is often considered the most difficult, due to the discussion on why to collect money from a patient. Normally, medical companies often use their front desk to collect money from patients during their service times. This process is facilitated through certain company policies, such as ones regarding co-payments and deductible payments.

References

About The Author

Ananth Seshadri

11
Articles
22826
Total Views
21
Total Likes
1
Total Shares

Hello, I am Ananth Seshadri, an Article Writer at Pitch Labs! I am interested in law and love to write articles about impactful topics. With my passion and dedication, I hope to captivate and inspire people in the present and future with my writing.

See more posts by Ananth Seshadri

Comments

Your generosity fuels innovation and drives success!

Our resources are assembled by a team of entrepreneurs who donate their time and energy to Pitch Labs to ensure that entrepreneurial resources are available to everyone. Unfortunately, we can't avoid major expenses such as website hosting fees. To ensure our resources remain free to access and use, we rely on donors who are able and willing to give back. Consider donating to be a part of the Pitch Labs mission today!

More in Financial


Financial » Accounting

What Is The GAAP?

by Callie Leff ·Apr 28, 2025

6
Views

GAAP is a set of accounting principles for public businesses, non profits, and government agencies to ensure transparency and accuracy. Read more

Financial » Funding

Where To Find Resources To Benefit Your Small Business

by Callie Leff ·Apr 7, 2025

22
Views

Whether it’s grant opportunities or educational seminars, it can be difficult to know where to start your search for small business resources. Read this article for some great jumping off points! Read more

Financial » Economics

What is the Consumer Confidence Index?

by Warren Patterson ·Apr 2, 2025

30
Views

You'll learn what the consumer confidence index means and how to measure it. Also, you'll discover the factors affecting consumer confidence, and where to get information about current standing and trends. Read more

Financial » Investing

What are internal and external stakeholders?

by Aashna. Haryani ·Mar 31, 2025

35
Views

What are stakeholders? What/Who is an internal and external stakeholder? Why are they important? Read more

Recent articles


Operations » Product & Service Management

What are revenue streams?

by Sunnie Souza ·Apr 30, 2025

5
Views

Revenue Streams are the various sources of operational, and non-operational revenue for a company. Read more

Operations » Product & Service Management

How to Manage Customer Relationships

by Deborah Taiwo ·Apr 25, 2025

18
Views

This article explores how businesses can foster genuine connections with their customers to build trust, drive loyalty, and ensure long-term success. It provides actionable steps for understanding and delighting customers. Read more

Operations » Management

Mastering Data-Driven Decision-Making for Your Business

by Christina Molitor ·Apr 23, 2025

16
Views

Data-driven decision-making relies on inputs such as customer preferences, edge analytics, and AI, prioritizing evidence over intuition and helping automate the decision making process. Read more

Basics » Business Plans

How to describe your product or service in your business plan

by Warren Patterson ·Apr 21, 2025

23
Views

A good product or service description is important in business as it helps drive traffic, generate leads, and build sales. This article looks at what’s included in a product or service description. Read to learn more. Read more

Join Our Community


Looking for something else? Get your questions answered in our free online learning community!

Entrepreneurial Resources


Jumpstart your next business with our free resource library.

Disclaimer


Our organization cannot give out official legal/fiscal guidance. All articles are written by volunteers and it may be beneficial to contact professionals to assist your understanding of the information and to guide your action. Pitch Labs bears no responsibility for the results of actions taken based off of article content or any other form of assistance given.