Financial Management
Definition of revenue cycle in healthcare
A revenue cycle is a process whereby financial progression of the accounts of a business is described.it begins where the business has made acquisition of products until they get paid. Healthcare firms are business oriented organizations. Their survival financially depends on a recurring and consistent flow of money from the services that are provided to patients. Without the existence of adequate stream of revenue then healthcare organizations would be forced to stop their operations. The revenue cycle begins immediately a patient registers to a healthcare institution for care. A revenue cycle that is well managed protects revenue collected and increases the flow of cash. If it is supported by an information infrastructure that is strong it will lead to the standardization of procedures and help in sharing of information across the units of operation ( Hall, s2010).
Complexity of the revenue cycle in health care
There exists a significant degree of complexity when it comes to revenue generation for healthcare organizations. There is no other industry that experiences the same level of complexity in the billing system compared to healthcare organizations. This complexity is due to the importance and nature f the services that are provided by these organizations. Another factor that complicates documentation and billing in healthcare organizations is regulation. The existence of different modes of payment and rates of multiple payers increases the complexity of the revenue cycle for the healthcare organizations.
Six stages of the revenue cycle
The revenue cycle consists...
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