Every business has a particular revenue cycle that must be adhered to when thinking about proper accounting practices. For companies that are involved with merchandise, they must ensure that they have associated the adequate costs to on-hand inventory. When an item is sold to a customer, the price of goods sold account is expensed to reflect the sale of a good. Depending on if these items were purchased on account, you may debit the accounts receivable account for the time being. Once the customer fulfills this obligation to pay, the accounts receivable account receives an accompanying credit, and the cash account is debited. This must be done after each transaction to ensure you are keeping accurate accounting records. With this said, there are revenue cycle steps that must be followed for the healthcare industry as well. Every member of a hospital should be familiar with revenue cycle management steps.
Using Proper Revenue Cycle Management
The first step involves determining how big your medical operation is. For relatively small services, you should be able to install your RCM software of choice on your servers. However, if you are running a multi-national hospital, this process will most likely be outsourced to a much larger firm. With this said, the next steps involve patient pre-authorization. The federal government mandates that each patient needs to be pre-authorized to ensure that the following procedure or prescription is administered with a cause. The only reason this step would be skipped is due to a patient experiencing a life-threatening injury, and this classifies as a medical emergency. After this step, eligibility and benefits verification takes place during the cycle. While this was once done over the phone, there is software available which can automatically perform this function for your hospital or practice. Using one of these systems will help speed up your operations immensely.