Financing in healthcare practice is essential since it helps ensure medical practice generates revenue for providing services that are crucial to the community. Since hospitals are complicated systems, their financing includes several revenue sources, where a large proton of it originates from the government and associated programs. The other alternative sources of revenue for hospitals include research grants, earnings on investment, donations, and gift shop sales. Moreover, hospitals get their revenues from public and private payers, payment rates, cost-shifting, and uncompensated care (Baker et al., 2018). Compared to hospitals, solo practice physicians’ primary source of revenue are the charges paid by the patients once healthcare services have been provided (Kwietniewski & Schreyogg, 2018). However, for solo physicians that have taken the time to become credentialed and enrolled with secure payer-provider numbers, the sources of revenue increase to include private and public payers.
Revenue Process
In healthcare, revenue management entails the process where healthcare systems can track their revenue from patients, from when they make an initial appointment to when the services are fully paid. For hospitals and solo practice physicians, the steps involved in revenue workflow or process are illustrated subsequently. First is the patient entering the provider facility takes place stage, where the medical practice captures the demographic information of the patient, real-time eligibility, and insurance information using a clearinghouse (Dahl, 2019). Often, this process takes place when the patient is still on the phone with the hospitals and solo practice physicians. The patient’s insurance carrier then shares the information while it flows through the hospital’s practice management system. Second is reception, and here, hospitals confirm whether the provided information is accurate from beginning to end (Dahl, 2019). At this stage, hospitals and solo practice physicians collect copayments, and if dealing with any specialist, the healthcare ensures an authorization or referral is made to treat the patient.
The third step is charge capture, which is realized in the following ways. It can be automated, allowing the information to flow automatically into the practice management billing system. The second way for charge capture is that it can be entered manually where the front office staff writes down the information (Dahl, 2019). The fourth stage, billing, is where hospitals and solo practice physicians send the information to the insurance carrier once the charges have been entered. The team responsible for the revenue cycle will confirm the charges together with the diagnosis and CPT codes. In the fifth stage, the remittance process begins where once the claims have been issued to the insurance carrier, hospitals get their remittance (Dahl, 2019). Here, hospitals and solo practice physicians determine any allowable, and a contract is negotiated between the carrier and them.
The sixth stage is insurance follow-up, where hospitals look for the services that have been paid for and compare them with what has not been paid. Lastly, the billing or reimbursement stage is when hospitals and solo practice physicians get their compensation for the services offered (Dahl, 2019). To minimize collection backlogs, hospitals must have standard copayments and deductibles collecting policies that set apart the practice from financial expectations. The only difference between solo practice physicians and hospitals is that a team is involved in the entire process in the latter. At the same time, the former is responsible for following through with the process.
References
Baker, J. J., Baker, R. W., & Dworkin, N. R. (2018). Health care finance: Basic tools for nonfinancial managers. Jones & Bartlett Learning.
Dahl, O. J. (2019). The High-Performing Medical Practice: Workflow, Practice Finances, and Patient-Centric Care. La Vergne: American Association for Physician Leadership.
Kwietniewski, L., & Schreyogg, J. (2018). Profit efficiency of physician practices: a stochastic frontier approach using panel data. Health Care Management Science, 21(1), 76-86.