Is your addiction treatment facility struggling with cash flow shortages resulting from too many past due accounts and a denial ratio that makes you cringe? Perhaps it's time to examine your revenue cycle management (RCM) strategy. Not really sure what RCM can do for you? Below are some frequently asked questions, and their answers, that will clear up the confusion.
What is RCM, and how does it work?
RCM is a process that carefully tracks claims from the first touch-point with your addiction treatment facility until you receive full payment for services. This process, or series of processes, helps medical providers identify bottlenecks and other issues, that slow down or prevent reimbursement for services.
Think of RCM as a claims life cycle
On the basis of the clinic’s previous collections experience, Dough was able to convert billings for medical services into actual cash collections. On average, about 20% of the clinic’s patients pay immediately for services rendered. Third-party payers pay the remaining claims, with 20% of the payments made within 30 days and the 60% remainder (of total billings) paid within 60 days. For monthly budgeting purposes, 20% are assumed to be collected one month after the billing month, and 60% are assumed to be collected two months after the billing month.
Chapter 6 describes revenue determination. Write a 3-4 page paper to include: List and discuss the three payment-determination bases. Explain the difference between a “specific services” payment unit compared to a “bundled services” payment unit. Describe the three major ways that health care providers can control their revenue function. I expect at least 5 secondary sources properly cited and referenced for this paper.
The purpose of financial measurement in healthcare is to provide the community with the services it needs, at a clinically acceptable level of quality, at a publicly responsive level of amenity, at the least possible cost. This is done by providing healthcare finance managers with accounting and finance information to help accomplish the purpose of the organization (Nowicki, 2015). When making accounting decisions about budgeting and inventory control, an understanding of economics, statistics, and operations research is needed. Major Financial Measures
The way in which healthcare organizations need to implement a new strategy into their A/R departments comes from the realization that time of registration is the best time to ask the patient for payment (Souza& McCarty, 2007). Front end staff in the healthcare industry has not been responsible for collecting payment from the patient before services are rendered; that responsibility has been that of the A/R staff. There have been other healthcare organizations that have found solutions to problems within their A/R departments. Sutter Health was successful in identifying problems in their A/R department, finding solutions for those problems in their A/R department and implementing their solution program into their company. Sutter Health has set themselves up for continued success in their A/R department.
In addition to this business plan, we must also address the financial issues plaguing this organization. To illustrate some of these issues lets look at some of the trends here at OCB and within our Industry: For example, OCB’s clinic operations profitability in 1990 was 60%, and now in 1996 our profitability is only 37%, which is down 23 percentage points! We can blame some of this on rising costs of overhead, consumables, etc, however this is happening as the industry as a whole is growing 5% annually, and as our customer base, largely senior citizens, population is growing at almost 1% as year. We should be capitalizing on these industry trends, however, as you all know, not all the trends work in our favor. For example, our lifeblood, the Insurance company’s managed care organizations, and government healthcare reimbursement programs shows a downward trend of allowable payments for our services (DRGs) For example in 1995 the DRG price of ...
First, let us analyze General Practice Affiliates’ current financial position. The income and expenses report shows a net revenue of $230,250. The net revenue is obtained after expenses, including taxes, of the company have been subtracted from revenue (Paterson, 2014, p. 124). The balance sheet shows a $306,180 in retained earnings. Retained earnings represent stakeholders’ equity (Paterson, 2014, p. 128). Retained earnings are usually invested back in the form of inventory or debt payments (Albrecht, Stice, Stice , & Swain, 2008). General Practice Affiliates’ cash flow analysis shows that the practice invests in new equipment. However, General Practice Affiliates mainly used cash during 2012. The main source of cash from operations came from depreciation expense, which is not a reliable source of funding (Paterson, 2014, p. 130). Accounts receivable increased by $50,000, while accounts payable only increased by $10,000. In addition, cash flow analysis shows a balance sheet data that is affected by future transactions (Paterson, 2014, p. 128). General Practice Affiliates choose to stretch the time to pay suppliers instead of paying its bills. ...
Predictors of Treatment Outcome in a Drug Court Program. American Journal Of Drug & Alcohol Abuse, 31(4), 641-656.
Hospitals recognized the need for the case management model in the mid 1980’s to manage the lengths of stay of hospitalized patients and the treatment plans (Jacob & Cherry, 2007). In 1983, the Medicare prospective payment program was implemented which allowed hospitals to be reimbursed a set payment based on the patient’s diagnosis, or Diagnosis Related Groups (DRG), regardless of what treatment was provided or how long the patient was hospitalized (Jacob & Cherry, 2007). To keep the costs below the diagnosis related payment, hospitals ...
Perkinson, R. R., & Jongsma, A. E., Jr. (2006). Practice Planners: The addiction: Treatment planner (3rd, Rev. ed.). Hoboken, NJ: John Wiley & Sons.
Substance Abuse and Mental Health Services Administration (Office of Applied Studies). Treatment Episode Data Set(TEDS): Highlights-2003. National Admissions to Substance Abuse Treatment Services, Rockville, MD: Department of Health and Human Services, 2003.
After an intensive investigation, it was discovered that Rosemont’s financial problems were greater than what the CEO reported. The facility lacked sufficient patient volume to generate the needed revenue. An emergency board meeting was called to brainstorm to see what could be done to salvage the financial situation. A consultant was contacted to help get Rosemont back on its feet.
The shareholders of Event Planners Ltd; a business specialised in planning events such as birthdays, weddings, etc., are disturbed regarding the unprofitable state of the business and the cash flow problem the business faces in recent times. This report discusses the importance of cash and profit for business survival, outlines how the problem of cash flow arises, effects of cash flow problems for the business, and identifies methods for dealing with cash flow problems. It gathered and applied information from several sources such as academic articles, reports, and documents, assumed to be credible enough for the discussions.
Costs, revenue and breaking even INTRODUCTION In this part of the coursework I will be looking at costs, revenue and breaking even. To do this we will have to work out our fixed costs, variable costs, expected total revenue, the amount of cars needed to break even and whether we make a profit or loss. A Business Plan Material and Equipment Fixed costs All of these materials and supplies will be bought from a local D.I.Y shop. * 4 sponges incl. 1 revolving sponge: - £32 * 4 buckets: - £10 * 4 scrubbing brushes for wheels: - £4 * Advertising Leaflets: - £5 * 4 chamois leather: - £12 Total fixed costs: - £63 Variable costs The washing up liquid can be bought from any local shop, but the water will be supplied from each of us from our homes although we wont be actually paying for the water it is included for business purposes.
Providing higher funds to gambling addiction clinics is one solution to the problem of gambling addiction. Clinics are important because they offer services to addicted people to help them get over their addiction. Six months after clinical treatment, 80 percent of people say they either don’t gamble or gamble much less (1). Sufficient amounts of free clinics is the key to decreasing the number of problem gamblers. “For the first time, we don’t have enough money to meet the growing demand of free clinics,” said Jeffrey Marotta, a clinical psychologists who manages problem gambling services for the Oregon Department of Human Services (1). In Washington, a state-funded treatment program for problem gamblers was started in 2002, but it ran out of money the next year (1). It is obvious that same states have a need for more clinics. Providing higher funding to create more clinics is the issue.
The management of cash is essential to the survival of any organization. Managing an organization’s financial operation requires knowledge of the economy and ways to maximize revenue. For any organization to operate on a daily basis adequate cash flow is required. Without cash management the organization will be unable to function because there is no cash readily available in case of inconsistencies in the market. Cash is also needed to keep the cycle of the company’s operations going.