Revenue cycle management (RCM) plays a crucial role in the financial success of healthcare organizations like senior living communities and skilled nursing facilities. By effectively managing the administrative and clinical functions associated with claims processing, payment, and revenue generation, revenue cycle management companies like Sunbound can help senior living communities and skilled nursing facilities optimize their revenue and improve their internal business practices. Join us as we explore the basics of revenue cycle management, its benefits for healthcare organizations, and how it can be specifically applied in the context of senior living communities.

What is Revenue Cycle Management?

Revenue cycle management is the process by which healthcare facilities like senior living communities and skilled nursing facilities track patient care episodes from registration and appointment scheduling to the final payment of a balance. It involves managing the financial aspects of providing healthcare services, including the identification, management, and collection of resident service revenue. The revenue cycle begins when a resident schedules an appointment and ends when the senior living community or skilled nursing facility has collected all claims and resident payments.

The Revenue Cycle Process

The revenue cycle process in senior living communities and skilled nursing facilities typically includes the following steps:

Resident Scheduling: The process begins when a resident moves into a senior living community or skilled nursing facility and starts receiving care. This generally happens at higher acuity level facilities such as assisted living or memory care communities, or skilled nursing facilities.

Benefit and Eligibility Verification: The senior living community or skilled nursing facility verifies the resident's insurance coverage (whether from a private source or a government organization like Medicaid or Medicare) and determines the insurance benefits and coverage limits.

Patient Encounter: The resident receives healthcare services, and the senior living community or skilled nursing facility documents the details of the treatment in the resident's medical record.

Medical Coding: The senior living community or skilled nursing facility assigns medical codes to the services rendered during the resident’s stay. These codes categorize the diagnoses, procedures, and treatments provided.

Charge Capture: The services provided are translated into billable charges, which are documented for billing purposes by the senior living community or skilled nursing facility.

Claims Submission: The senior living community or skilled nursing facility submits claims to insurance companies or government payers like Medicaid or Medicare for reimbursement. The claims include all the necessary documentation and coding information.

Payment Posting: The senior living community or skilled nursing facility receives payments from insurance companies or payers, and the payments are recorded in the system.

Secondary Billing: If applicable, the senior living community or skilled nursing facility submits any remaining balance to secondary or tertiary insurance payers for payment.

Collections: The senior living community or skilled nursing facility collects any resident payments for outstanding balances, after insurance reimbursement has been received.

Denials and Appeals: In case of claim denials, the senior living community or skilled nursing facility reviews the reasons for denial and initiates the appeals process if necessary.

Financial Reporting and Analysis: The senior living community or skilled nursing facility analyzes financial data and generates reports to monitor revenue performance and identify areas for improvement.

Benefits of Revenue Cycle Management

Revenue cycle management companies like Sunbound help senior living communities and skilled nursing facilities maximize their revenue by taking on some or all of the above processes. By efficiently managing senior living communities’ revenue cycles, revenue cycle management companies like Sunbound allow senior living communities to run their businesses at a high level and also free up their employees to spend less time on paperwork and more time doing what they do best: providing amazing care to their residents. Along with these main benefits, revenue cycle management companies also help senior living and skilled nursing facilities with:

Efficient Claims Processing: Revenue cycle management streamlines the claims submission process, reducing the chances of errors and claim denials. This leads to faster reimbursement and improved cash flow.

Improved Revenue Capture: By accurately coding services and capturing charges, senior living communities and skilled nursing facilities can optimize their revenue and ensure they are appropriately reimbursed for the care provided.

Enhanced Resident Satisfaction: Efficient revenue cycle management processes result in accurate billing and fewer denied claims, leading to smoother financial interactions with residents and improved resident satisfaction.

Optimized Financial Performance: Implementing revenue cycle management best practices helps senior living communities and skilledn nursing facilities maximize revenue, reduce operational costs, and improve overall financial performance.

Resident Billing and Collections: Senior living communities provide various services to their residents, including accommodation, meals, and healthcare assistance. Revenue cycle management in senior living communities involves accurately capturing and billing for these services, as well as efficiently collecting payments from residents or their families.

Accurate Billing: Revenue cycle management ensures that all services provided to residents are accurately documented and billed, including room and board, medication management, and any additional care services.

Timely Collections: Effective revenue cycle management processes enable senior living communities to collect payments from residents in a timely manner, ensuring consistent cash flow and financial stability.

Insurance Verification and Claims Submission

Senior living communities and skilled nursing facilities often work with insurance providers or government agencies such as Medicaid and Medicare to cover certain healthcare services for their residents. Revenue cycle management helps facilitate insurance verification and claims submission processes.

Insurance Verification: Senior living communities verify residents' insurance coverage, ensuring that services rendered are eligible for reimbursement.

Claims Submission: Revenue cycle management ensures the accurate and efficient submission of claims to insurance providers, maximizing the chances of reimbursement for covered services.

Medicaid Billing: Senior living communities must accurately document and bill the services provided to Medicaid-eligible residents, following the specific guidelines and requirements of the Medicaid program.

Medicare Billing: Revenue cycle management ensures that senior living communities properly bill Medicare for covered services, including skilled nursing care or therapy services.

Private Pay and Financial Assistance

Some residents may be private pay, meaning they do not have insurance coverage for their senior living expenses. Revenue cycle management helps senior living communities manage the billing and collection processes for private pay residents as well.

Private Pay Billing: Senior living communities must accurately bill private pay residents for the services provided, ensuring transparency and clear communication about the costs involved.

Financial Assistance: Revenue cycle management may involve assisting residents or their families in navigating financial assistance programs or exploring other options to cover the costs of senior living services.

Revenue cycle management is a critical component of financial success for senior living communities and skilled nursing facilities. By implementing effective revenue cycle management practices, senior living communities can optimize their revenue, improve operational efficiency, and enhance resident satisfaction. Understanding the unique considerations and challenges of revenue cycle management in the context of senior living is essential for ensuring financial stability and providing quality care to residents.

To learn more about how Sunbound can help make senior care more affordable for you or your loved one, send us an email at info@sunboundhomes.com or request more information on Sunbound. Sunbound is the best way to pay for senior living and senior care and is on a mission to make senior living affordable for everyone.