HCM 345 Final Project Milestone 1.docx - Final Project...

Final Project Milestone 1 1
HCM 345 – Final Project Milestone 1
Martha Williams
Southern New Hampshire University

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What is a revenue cycle? Why is it important in healthcare? The revenue cycle in
healthcare is the financial process that facilities use to manage the administrative and clinical
functions associated with claims processing, payment, and revenue generation. The process
encompasses the identification, management, and collection of patient service revenue.
(LaPointe, 2012-2020) If a healthcare provider or facility does not have a revenue cycle, they
will have a hard time keeping patients and their doors open. Overall, the revenue cycle is there to
help providers and facilities get paid for the good and services that they provide in a timely and
accurate fashion.
Healthcare reimbursement can seem quite complicated. This is true since the government
rules surrounding the government payers changes frequently, sometimes even day to day. In most
cases, payment is received after medical services are provided, which is why it is called
reimbursement. Health insurance usually have contracts with medical facilities and medical
practices. In these cases, there are certain payments that the providers agree to accept as
payment. However, that payment can change if the provider or facility is outside the health
insurance network.
The question arises, “what happens when a healthcare provider does not get paid? Or has
trouble receiving payment?” There is a trickle-down effect. If a provider is not paid, the provider
may bill the patient even if they have health insurance. This creates a problem since the health
insurance is the one who should be paying for the services. Another issue that may arise is called
“balanced billing.” Balanced billing means the provider has chosen to bill the patient additional
amounts that may be beyond the copays or coinsurances that a patient owes with insurance. This
practice is considered illegal and should be reported when discovered. The sad part is that many
patients end up paying these charges even though they are not responsible for them. It is

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important that patients look over their bills and statements from insurance so that they are aware
of what providers are charging and why. Yet another issue in reimbursement occurs when
patients are not able to pay the copays, coinsurances or member responsibility for services
provided. Copays are generally collected at time of service whereas coinsurance is billed to the
patient once the health insurance is billed. A good example of this would be when a patient goes
to the emergency room. Most health insurances have a copay that is due when visiting the
emergency room. This copay would be paid before leaving the emergency room and is not billed
to the patient. If payments are not received from patients, the facilities and healthcare providers
would not be able to function. These copays, coinsurances and member responsibilities are what
help the providers and facilities pay their daily costs.