For hospitals, health systems and physician practices, delivering excellence in care and providing the best outcomes for patients drive what you do. However, there is a financial side to healthcare, and it’s highly complex. What makes it so complicated? Rules, regulations, compliance, manual workflows, challenges with patient access and more make it all difficult to manage. Collectively, this is revenue cycle management. So, what is revenue cycle management? 

Get the answer to this question and many more!

What Are the Phases in Revenue Cycle Management?

The many steps involved in RCM cover the entire lifecycle of a patient encounter, from a patient making an appointment through receipt of services to claim submission and payment. The breakdown of this workflow includes three primary phases.

Front-End RCM

To begin the revenue cycle, patients must schedule an appointment. registration, eligibility, prior authorization and enrollment follow. It’s critical to ensure that all these processes occur accurately so there’s no impact later on regarding who’s responsible for payment.

Mid-Cycle RCM

Next, the patient meets with the provider, and they capture the charges related to the appointment. Medical billing, coding, clinical documentation and health information management are part of the Mid-Cycle.

Back-End RCM

At the end of the revenue cycle, revenue management related to claims submission and resolution occurs. Payers sometimes reject claims for various reasons, which require denial evaluation and resubmissions. In the Back-End, patient collections can also be necessary.

Why Must Providers Prioritize RCM?

With all the nuances and opportunities for gaps, leaving RCM without oversight and constant evaluation can result in financial hardship. You may be unable to serve more patients, hire more staff or keep the organization afloat. 

In prioritizing RCM and transforming it through optimization, you streamline the complete interaction with patients and check all the financial task boxes. It starts with a modern, technology-enabled patient access workflow to ensure accuracy in information collected from patients and eligibility. 

From there, the tasks become more complex, as medical billing and coding can be error-prone and resource-heavy. Clinical documentation must also be precise. There’s an opportunity for technology to alleviate these pain points, too. Even when you think you’ve followed every step with exactness, you may still face denials from payers, which require time to review and address. 

With all these potential pitfalls, prioritizing RCM must be a tenet of your hospital, health system or practice. Your objectives are clear—serve your patients and recover all revenue due to you for these services.

What Are the Key Challenges of Revenue Cycle Management?

Because it’s such a long, involved process, challenges arise all across the revenue cycle. These are evolving as the healthcare system does, but many have been core problems for some time.

The Time and Resource Factor

Keeping up with the revenue cycle can be impossible for organizations still relying on manual processes and paper forms. Staffing shortages are impacting almost every area of healthcare as well, which means you have to do more with less. Medical coding and billing require specialized knowledge and expertise, so gaps here can increase denials.

What’s the best solution for this problem? Technology can automate many functions in the workflow. AI is also emerging as a support for coding and billing. Many organizations are also choosing to outsource RCM functions, building partnerships with experts in the space.

Denials Are on the Rise

Providers routinely state that denials are their biggest RCM challenge. Denials result in lost or delayed revenue and require extra time to resolve. Providers have the most issues with commercial payers. A report found that these insurers denied 15.1% of inpatient and outpatient claims in Q1 2023, as compared to Medicare’s 3.9%. 

This report also highlighted the diversity in denials. Prior authorization and precertification were one area of concern. These tasks are part of the RCM Front-End patient management. Developing a more robust and technology-supported solution for this could reduce this type of denial. Focus on prevention to get paid faster.

Patient Collections Skyrocket

A recent survey found that 48% of providers listed patient collections as their top revenue cycle management challenge. There has been a considerable increase in patient payment responsibility, as many consumers have high deductible plans. 

This problem also falls under the Front-End. Defining eligibility also means delivering information to patients about what they will need to pay. Any gaps here can cause confusion and eventually non-payment. It also impacts their experience and if they remain your patient. Fix the Front-End to solve this challenge.

What Can Providers Expect by Improving Their Revenue Cycle?

When you streamline, optimize and modernize revenue cycle management, you can achieve key benefits, including:

• More reliable cash flow
• A greater clean claims rate
• Fewer denials
• Improved efficiency and productivity
• Enhanced patient experiences
• Less manual work
• Greater insights into the barriers impacting the revenue cycle and the opportunity to address them 

A strong RCM program that uses technology, automation and redesigned processes yields a healthier bottom line and your ability to focus on care, not numbers.

What Actions Can You Take Today to Improve Your Revenue Cycle Management Process?

When truly realizing what revenue cycle management is, you can revamp your RCM efforts in big and small ways. Each of these action items provides you with the foundation and execution capabilities to have control over your revenue cycle.

• Implement automation throughout the workflow that includes rules-based tasks like scheduling, registration, parts of the claim’s submission, managing denials, and more.
• Improve coding accuracy and quality by using technology to review or outsource to a medical billing service provider with credentialed coders.
• Centralize claims management for improved tracking and access to claim status in real-time.
• Identify the root causes of denials and establish parameters at the Front-End to resolve them.
• Reduce bad debt from patients by developing a communication program, flexible payment models, and continuous follow-up.
• Create more accurate forecasting by establishing technology that enables predictive analytics. 

The revenue cycle may be complex and multi-layered, but you can realize these gains and much more with the right partner. Healthcare organizations trust us to support, manage and design revenue cycle management. The results are clear—faster payments, fewer denials and less strain on resources.

Learn more about how we can transform RCM by requesting a consultation.