Back to Basics: Healthcare Revenue Cycle Management 101

RCM – it’s an acronym that’s thrown around a lot in healthcare circles. It is a critical component to any healthcare organization, as well as an omnipresent process that touches many hands, from front desk schedulers all the way to C-suite executives. Many may be familiar with the term, but what does it really mean? Let’s break it down.

At its core, revenue cycle management, commonly known as RCM, centers on – you guessed it – a healthcare organization’s revenue cycle. Weaving through many sections of healthcare operations, the revenue cycle encompasses various moving parts: patient registration, claims submission, and denials and appeals, to name a few. On their own, these areas are no doubt important. However, when collectively viewed through the lens of the overall revenue cycle, they are vital to success. For an organization’s revenue cycle to run on all cylinders, these varied forces must work together – and work properly – to create a high-functioning revenue cycle.

A vital piece of the healthcare ecosystem

If patient care delivery is seen as the center of healthcare, revenue cycle is its cornerstone. Care outcomes are of course of the utmost importance, but when healthcare operations are examined from the business side, a different perspective emerges. Business executives and those with a hand in the management of the revenue cycle at a health system must also be invested in the things like coding accuracy and the technology used to ensure the organization’s payment portals function properly. This is because a core function of the business side of healthcare includes optimizing the revenue cycle, and these duties are key pieces of the puzzle. Imagine the revenue cycle as an assembly line: each task must be checked off the figurative list in order to see a finished product. These various moving parts must work together to achieve the desired outcome. Take eligibility, for example. Verifying coverage is crucial for determining patient eligibility. If a patient’s insurance provider has changed and they fail to mention this, or if a manual error mistakenly notes the wrong policy number, consequences could arise for the patient, provider, and payer. This task, along with the other, are critical cogs in the wheel of the overall revenue cycle. While many pieces can function independently, the true strength comes from working together. To perfect care delivery, these behind-the-scenes elements have to be in optimal working order.

Revenue Cycle Management: Why it’s Important

The importance of RCM lies in its ability to streamline and enhance the financial workflow, ensuring accurate and timely reimbursement for the services provided. Efficient RCM practices help minimize revenue leakage, reduce billing errors, and enhance cash flow, which, in turn, allows healthcare providers to allocate resources effectively and focus on delivering high-quality patient care. Moreover, in an era of complex healthcare regulations and evolving payment models, a robust RCM strategy becomes even more crucial to navigate the intricacies of the billing and reimbursement landscape, ultimately contributing to the overall financial viability of healthcare organizations.

For hospitals and physician practices to succeed, a spotlight needs to be placed on the revenue cycle, and RCM measures need to be enacted to optimize operational processes and meet revenue goals. And perhaps most importantly, with a high-functioning revenue cycle in place, the patient support side of healthcare to able to thrive.

Learn how Essentials Pro from Availity can help manage your RCM here.