Stages of the Revenue Cycle in Healthcare Companies

In the book Extreme Ownership by Jocko Willink and Leif Babin, Willink recounts a story about a friendly fire incident that occurred while he and his US SEAL team were deployed to Ramadi, Iraq.?

Willink was coordinating a group of SEALs, Marines, US Army, and Iraqi forces to clear a neighborhood in Ramadi.? At one point, Willink came across a gunfight between Marines and what they thought were insurgents.? The Marines had called in both an airstrike and had a tank pointed at the building.? Willink, aware that a SEAL sniper team was in the area but unaccounted for, became suspicious that this engagement was not as it seemed.? He went to investigate and found his unaccounted SEAL sniper team was the pinned down “insurgents.”?

This potentially devastating event led to a friendly fire investigation.? When Willink was asked to identify who was responsible for the incident, he could have blamed many different people.? Ultimately, he took responsibility for all of it because he was the overall leader of the battle theatre. From this experience, he developed the concept of “Extreme Ownership.”

Although not as dramatic as Ramadi, the Revenue Cycle process in Healthcare can create its own fog of war where ownership is unclear. Other departments, like Accounting or Operations, may feel like they should own certain parts of the revenue cycle as well.?

However, to be successful, the Revenue Cycle Director / Vice President needs to own the entire process from start to finish.? This should include the following sections:

• Patient Registration: It is crucial to accurately capture patient demographics.
• Insurance Verification: Those eligibility checks can determine whether Co-Pays are collected up front!
• Medical Coding: The right DX codes are required based on whatever activities are performed by the doctor/staff.
• Charge Capture: Once the codes are captured, they need to be translated to the right CPT code.
• Claim Submission: This is one area where IT can come in handy.
• Payment Posting: Accounting may want some say in this, but it is important that posting stays within the revenue cycle.
• Denial Management: Once the payments and codes are posted, it's time to get to work reworking denials.
• Patient Collections: Once the adjudication happens, the patient's financial responsibility must be collected.

In the same way that Jocko Willink took complete ownership of the incident in Ramadi, a successful Revenue Cycle Director or Vice President must take full responsibility for the entire revenue cycle process in a healthcare company. Extreme ownership means recognizing that each stage of the revenue cycle is interconnected and vital to the overall financial health of the organization.

Navigating these areas can be complex, and having an expert eye to evaluate and optimize your Revenue Cycle processes can make a significant difference in your practice's financial health.? Feel free to contact me if you want to discuss how to improve yours.