Revenue Cycle Management

Table of Contents

Introduction. 3

Reimbursement and the Revenue Cycle. 3

Departmental Impact on Reimbursement 4

Billing and Reimbursement 6

Marketing and Reimbursement 9

Conclusion. 10

Healthcare Revenue White Paper


Organizations always operate to ensure tangible and intangible assets are all effectively employed to generate revenue. A subjective measure of tracking and ensuring this translation is reflected in the financial performance. Depending on the industry, financial performance has various techniques to analyze financial health and manage the revenue cycle. At Mayo Clinic, this process begins when a patient is registered for medical care, bills are paid, and accounts are closed. Mayo Clinic is one of the leading healthcare organizations in the US, and given its size, it has various departments involved in the revenue cycle management, and this complexity often leads to the occurrence of many problems. Financial performance within the healthcare setting also encompasses reimbursement, which is more than traditional group health insurance. It refers to the benefits accorded by employers towards their employees’ medical expenses. Healthcare reimbursement is a subject of interest among practitioners since it shies away from using a carrier to administer health insurance; instead, it is the benefit allowance. Therefore, this paper will present departmental development at Mayo Clinic concerning healthcare reimbursement and the revenue cycle while looking at the departmental impacts and reimbursement marketing.

Reimbursement and the Revenue Cycle

Mayo Clinic is one of the leading beneficiaries of healthcare reimbursement in the United States. Reimbursement is one of the leading sources of revenue at the hospital since it serves thousands of patients each year. Unlike healthcare insurance, healthcare reimbursement is an employer-funded, untaxed health benefit allowance that employers reimburse their employees for medical expenses. Healthcare reimbursement is becoming a subject of much focus within the Mayo Clinic Organization. For the organization, it is essential that patients can afford their healthcare since it is the only way it can function. With the burgeoning inflation that is making healthcare costs skyrocket, employee reimbursement is becoming an option for the public. Thus, for Mayo Organization to be able to generate revenue, the patients must afford its services. Mayo is a large organization, and it can be disadvantageous to manage health insurance plans, making reimbursement benefits a good logistical option. Moreover, as the organization seeks to provide quality healthcare to employees from all industries, medical reimbursement presents a good opportunity as it is an option that fits organizations of all sizes. This aspect levels down the playing field by narrowing the gap between those who can and cannot afford expensive insurance plans. As such, healthcare reimbursement is an essential aspect of Mayo’s objectives of providing quality healthcare.

It is essential to note that before the patient billing process begins at Mayo Clinic, aspects such as the development and implementation of revenue collection, procedures, standards, and other measures are carried out. During patient contact, there are front-end tasks and core tasks. The first touchpoint occurs during patient scheduling and registration in the billing department, where their details, including their medical history, are taken. The billing department also conducts precertification before the insurance is certified. After these front-end activities, the core activities occur where services are provided depending on the complexity of the health issue. Once the services are rendered, payment is made at the end of the patient flow cycle. The departments that a patient interacts with are wide-ranging, but they are normally the inpatient service department, the medical department, and the nursing and pharmacy departments.

Departmental Impact on Reimbursement

In the age of using data in organizational decision-making, Mayo Clinic ensures that it has in place the best procedures and policies for data collection, analysis, and evaluation. Reimbursement and billing data are of crucial importance since patient financial services are at the core of the organization’s operations. The insurance industry has a strict way of operating with data since minor documentation issues can lead to denied reimbursement. For instance, if the financial department fails to file a claim for a patient where services have been rendered, the health insurer used by the patient may deny the claim. Moreover, the use of data is essential in organizations such as Mayo, which is based on value-based purchasing. In this payment model, performance measures must be accurately collected and evaluated. Through the data, the organization can gauge its competitive relevance and have a picture of performance as per the industry standards.

At Mayo Clinic, almost every activity and operation within the organization’s departments directly or indirectly impacts reimbursement. Customers will only be attracted to Mayo Clinic if the organization continues to offer quality healthcare. As such, when the provider provides the best health care, this will be reflected in data such as hospital readmission. Thus, poor care delivery from a department such as the nursing department is one of the activities that will be reflected in hostel readmission rates. Patients will seek healthcare from other providers, thus impacting reimbursement into the organization. In the pharmacy department, activities such as lack of compliance with standards can impact reimbursement by creating a negative image among the public. In the billing department where the registration activities occur, taking inaccurate patient information may leave out crucial information elements. Without capturing the right information, health insurance providers may deny reimbursement claims. As such, the organization may incur costly mistakes that may lead to the denial of claims from insurance providers.

At the Mayo Clinic, the billing department is the heartbeat of the financial and revenue operations. While each department has its own financial office, the billing department is responsible for the overall compilation of financial records, including patient registration. Besides keeping track of all financial transactions, the department also provides financial direction for the organization. The Billing and Insurance department has divided the billing process into provider-based billing and hospital and physician charges. The provider-based billing category deals with reimbursements, which begins by requesting a copy of the insurance card. This also involves checking that the insurance requirements are met, including referrals and precertification, before submitting the claims to the insurer for insurance claims. Since the Billing and Insurance Departments are concerned with the sensitive process of filing and submitting claims in place of the patient, its reimbursement urgency cannot be underscored. Therefore, the policies and procedures at the department have a direct, wide-ranging impact on reimbursement in the healthcare organization.

Billing and Reimbursement

The hospital industry is subject to numerous national regulations that govern all activities, from patient registration to the final checkout. Firstly, when the patient checks in at the emergency department, he is required to submit various pieces of information such as medical history and demographics. In this case, patient information is governed by third-party policies such as the Health Insurance Portability and Accountability Act (HIPAA). This federal law requires adherence to national standards for protecting patient information, including their history and health insurance information. As such, guidelines must be formulated in accordance with HIPAA regulations at the point where the patient checks into the hospital. Secondly, the healthcare professional offers the care that the patient requires. The kind of consultation offered depends on the complexity of the patient’s issue. Patients are entitled to effective consultation that leads to better medical outcomes. For instance, when patients are wrongly treated, they have a right to legal intervention, which may have detrimental impacts on reimbursement. Also, it is with a healthcare professional that a patient’s issue is determined and filed in codes from where the hospital can claim insurance from the health insurer. Depending on the disease complication, most patients usually end their healthcare with the pharmacy department, and it is essential that proper guidelines are followed in this department. The codes from the pharmacy are later transferred to the health insurer for payments. Therefore, best practices for pharmaceutical services as per the Pharmacy Federal Law are essential in reducing the risk of reimbursement.

For the maximization of third-party insurance payers, Mayo Clinic reviews five key areas that enhance timeliness and efficacy. The first step is patient information recording, where Mayo Clinic utilizes Patient Online Services to instantly access patient records. This step is the essential area of review in this process as it pertains to strict guidelines and has no room for errors. The second area of review is patient information verification which follows from the first step to ensure that all details, including insurance details, are captured correctly. The Patient Online Services used by Mayo Clinic automatically verifies the information with the help of nursing staff to ensure that prior treatment, diagnosis, and registration are correctly reflected. This step is the second most essential step because it is also where it is ensured that the correct codes are captured. Capturing the right codes will prevent delays and denials in the insurance claim process by the health insurers. After ensuring that each detail is correctly captured, the next important step is verifying the eligibility of insurance for the patient to access services. If the patient is covered, the services offered will depend on how fully the patient is covered and for what diseases. This step determines the amount payable by the insurer and any existence of out-of-pocket payments by the patient. When the insurer caters to all of the expenses, then the next step is not necessary. However, if the patient has to make out-of-pocket payments, the last critical review area is if the patient can pay. This step is crucial since it directly impacts cash flows.

Feedback is necessary to establish the governing variables that aim at achieving effectiveness. As such, after a patient is served within the Mayo Clinic organization, an after-service follow-up should be conducted to measure the effectiveness of the reimbursement and revenue cycle policies. The follow-up process begins when the patient is provided with the required services and allowed to go home for outpatients. However, for inpatients, follow-up commences when they are admitted. At the Mayo Clinic organization, the nurses submit their records for admitted patients to the billing office. For outpatients, the customer care agents will conduct follow-up calls within the next two days after they are discharged. The follow-up structure aims at seeking information on the patient’s ongoing health conditions, including any concerns with medications and other procedures conducted. Moreover, the agents will request feedback concerning the care they received and ask for any points of dissatisfaction. The customer care agents are usually provided with access to patient records, including interactions with the hospital, such as previous calls to enable efficient decision-making by the employees. This follow-up structure will be effective in enhancing customer care since it enhances accountability and provides critical customer feedback that can be used for better service delivery.

The first step to any planned implementation is the formulation of the governing variables. This includes the formulation of policies and regulations that will ensure that objectives are achieved. As such, the plan for ensuring compliance with the financial performance guidelines will begin with outlining the organization’s mission through formulating policies. After this, the mechanisms and responsible departments will be delegated the duties of ensuring compliance with the set guidelines. They will monitor that the proper structures and infrastructure, including contemporary software, are in place to comply with the enforced standards. Besides ensuring compliance, the delegated office for standards will also develop a system for conflict resolution in case complaints arise concerning the quality of care provided. The next step involves developing this into Mayo’s organizational culture. This step can be achieved by ensuring that all of the employees are on the same page concerning the compliance standards and they are all working on the same objectives. Lastly, the plan will have a monitoring process that will ensure policies are enforced while identifying gaps that will be essential in proposing changes.

Marketing and Reimbursement

It is essential to note the impact of care contracts on reimbursement. Since reimbursements make up a large portion of Mayo’s revenues, it is essential to fathom the impact of care contracts. Care contracts entail the details that describe the kind of care that a patient will receive or the services that they are eligible to receive. Care contracts are generally categorized into two main levels, although they can be used together. A preferred Provider Organization (PPO) is one care contact where a group of providers provides care. A patient secured under this category will have most of their bills paid by the insurance, including additional costs that may be incurred. On the other hand, Health Maintenance Organizations (HMOs) involve care contracts where the insurer only pays the care costs periodically for patients within the network. Also, it is essential to note that HMO involves patients choosing their primary care provider. Therefore, the kind of care contract bound to a patient will impact a hospital’s reimbursement. Where the primary provider is selected, then disbursement will be easier and quicker, although patient propensity to pay will play a big role. On the other hand, patients under PPO will have their reimbursements quicker, and this impacts the organization’s cash flow.

The office of the compliance officers will develop a plan for ensuring that all standards stipulated are met. This office will be funded by the quality assurance department that ensures that quality care is standardized within the organization. However, this compliance office will require support from other departments, such as the pharmacy and security departments. The organization will also have to implement contemporary technologies that allow Electronic Health Records to automatically capture uncompliant data. Lastly, continuous training and development of human resources are essential to ensuring compliance. The employees must be regularly updated on the measures and modifications to have a competent team.

The creation of a code of standards is the first step in ensuring ethical standards. Having ethical standards in place is essential to have every stakeholder on board. All stakeholders will know what is required of them, how they can achieve the set objectives, and also consequential disciplinary actions that will be followed in case of a breach. Also, Mayo Clinic will ensure that compliance to these standards is ingrained into the organizational culture to make it easier for compliance even when onboarding new talent. The compliance department will also ensure that efficient communication channels are in place to support the staff in the compliance standards. This way, the code of conduct and other ethical standards will be stipulated and followed within Mayo Clinic.


This study has communicated the importance of reimbursement to the Mayo Clinic Organization. Delayed insurance claims from the insurance provider are sure to follow when processes are not in place to ensure efficient reimbursement policies. Many different departments within the Mayo Clinic organization are involved in the patient cycle flow, hence their direct impacts on reimbursement. Various activities within the departments impact the accuracy of the information, such as wrong diagnoses that can lead to capturing of falsified data, leading to delaying or denial of insurance claims. Third-party policies such as HIPAA govern the development of guidelines for patient financial services. Patient registration and data collection is a key area of review that determines the timeliness and maximization of third-party payers. The development of a code of standards is the first step in ensuring compliance. A compliance office under the quality assurance department should ensure compliance with organizational ethical standards.

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