Revenue cycle edited

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Components of the Revenue Cycle
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Components of the Revenue Cycle
Name and discuss in order the components of the revenue cycle. The revenue cycle in the
healthcare sector describes the financial management process that happens from scheduling to
payment. The process helps in identifying, collecting, and handling patient services. The four
components of a revenue cycle include credit management, dispute and deduction management,
cash application and accounts management, and collection management (4 key components of
revenue cycle management: Leib Solutions 2019). Focusing on these critical areas of revenue
management helps reduce friction and further improve cash flow, profits, and customer service.
Credit management is the first process in the revenue cycle that involves establishing
credit policies, registering new clients, and managing credit risks. The second process in the
revenue cycle requires dispute and deduction management. The step is complex since it consists
in handling customer deductions from accounts receivable. Deduction management entails
exceptions that need to be performed due to shipping, price, and product errors (Barone-Allan,
2020). Collection management is often the third process that is often automated to handle various
modes of payment. The process involves managing the accounts receivable of different revenue
generation models. The last stage of the revenue cycle is collection management. Collection
management involves monitoring and tracking the processes involved after collection to create
value and determine profits.
Which processes for revenue cycle management and reporting do you perceive as most effective
and why? Managing cash application and accounts receivables is the process that is handled most
effectively in the revenue cycle management. In most health care facilities, the process of cash
application and handling receivables are often automated. The processes are automated using
EDI, ACH, and credit card payment systems (Barone-Allan, 2020). The latest implementation of
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a cash system couples several functionalities such as automatic matching payment with invoices
and client credits onto respective deductions. The current performance also allows new
transactions, such as debiting memos from the cash application.
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References
4 key components of revenue cycle management: Leib Solutions. Leib Solutions |
leibsolutions.com | Top National Collection Agency. (2019, March 5). Retrieved October
15, 2021, from https://www.leibsolutions.com/4-key-components-of-revenue-cyclemanagement/.
Barone-Allan, O. (2020, January 28). Revenue cycle process explained [podcast] – besler.
Protecting and Enhancing Revenue for Hospitals. Retrieved October 15, 2021, from
https://www.besler.com/revenue-cycle-process-explained-podcast/.
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