Revenue Cycle Management (RCM): Products

A Buyer's Guide to

Revenue Cycle Management (RCM)

What is digital in revenue cycle management?

Digital RCM solutions are software platforms and technologies that automate and optimize the healthcare revenue cycle. These tools leverage advanced algorithms, artificial intelligence, and data analytics to streamline financial processes, improve efficiency, reduce errors, and provide actionable insights.

Solution framework

Front-end

Credentialing	Systems that verify and assess the qualifications, experience, and professional background of healthcare providers to ensure they meet the standards required to practice within a specific healthcare organization or network.
Insurance eligibility verification and prior authorization	Systems that confirm a patient’s insurance coverage, benefits, and obtain approval from the insurance provider for specific medical procedures or treatments before they are performed.
Price transparency and cost estimation	Systems that provide clear, accessible information about the costs of healthcare services to patients, including estimated out-of-pocket expenses, and facilitating various payment options to improve financial clarity and patient satisfaction.

*Scheduling and Pre-Registration are crucial parts of the Front-End Revenue Cycle process. Please see our Digital Front Door categories for companies in the Scheduling and Pre-Registration space.

Mid-cycle

Clinical documentation integrity	Systems that ensure patient medical records are accurate, complete, and properly reflect the patient’s condition, treatments, and outcomes to support quality care, appropriate reimbursement, and regulatory compliance.
Medical coding	Systems that translate medical diagnoses, procedures, and equipment into universal alphanumeric codes based on standardized coding systems (e.g., ICD-10, CPT) for accurate billing and reporting.

Back-end

Claims management	Systems that prepare, submit, track, and resolve healthcare claims with insurance payers to ensure timely and accurate reimbursement for services provided.
Denials and appeals management	Systems that identify, analyze, and address denied claims, including the process of appealing incorrect denials to maximize reimbursement and improve future claim submission accuracy.
Patient billing and payment collection	Systems that generate accurate patient bills, communicate financial responsibilities, offer payment options, and collect payments for healthcare services rendered.
Revenue cycle analytics and intelligence	Systems that use data analysis tools and techniques to gain insights into the revenue cycle performance, identify trends, predict outcomes, and make data-driven decisions to optimize financial performance and operational efficiency.

Transforming revenue cycle management (RCM) through digital innovation is no longer just a back-office necessity; it’s a strategic imperative for healthcare organizations. By leveraging advanced RCM solutions, organizations can not only reduce administrative burdens and improve cash flow but also elevate the patient financial experience. A seamless, data-driven revenue cycle empowers healthcare providers to reinvest in their mission, delivering higher-quality care, expanding access, and driving sustainable growth in an increasingly complex environment.

— Beth Konczakowski
Director of Strategic Advisory Services

The case for digital in revenue cycle management

Healthcare systems today face numerous challenges that impact their financial stability and operational efficiency through increasing complexity of reimbursement models, rising costs, and growing patient financial responsibility. In this landscape, digital solutions for revenue cycle management have the potential to address these issues and optimize healthcare financial operations.

Key drivers for digital in RCM

Financial performance
One of the most pressing concerns in healthcare is maintaining financial stability while delivering high-quality care. Many healthcare organizations struggle with narrow margins and financial pressures with the average operating margin for hospitals performing at a loss of 13.5% in 2022. 1 Effective RCM addresses this challenge by streamlining revenue capture, reducing claim denials, and accelerating cash flow. By implementing robust RCM solutions, healthcare organizations can improve their financial performance, ensure proper reimbursement for services rendered, and maintain the resources necessary to provide excellent patient care.

Administrative burden
Administrative costs in healthcare have reached unsustainable levels, accounting for 15-25% of total healthcare spending in the United States. 2 Much of the administrative load falls on clinical staff, contributing to burnout and job dissatisfaction. RCM solutions offer a way to alleviate this burden by automating many administrative tasks related to billing, coding, and claims processing. Through intelligent automation and workflow optimization, RCM not only improves operational efficiency but also has the potential to enhance job satisfaction and retention among healthcare professionals.

Patient financial experience
As patient financial responsibility continues to grow, with out-of-pocket costs rising exponentially year-over-year, healthcare organizations face increasing pressure to provide a transparent and consumer-friendly financial experience. 3 Traditional billing practices often lead to confusion, frustration, and ultimately, lower collection rates. RCM solutions address this by offering patient-centric billing options, unified billing, clear cost estimates, and flexible payment plans. By improving the patient’s financial journey, healthcare organizations can increase patient satisfaction, boost collection rates, and build long-term patient loyalty.

Regulatory compliance
Healthcare organizations operate in a highly regulated environment, with complex rules governing billing, coding, and reimbursement. Non-compliance can result in significant financial penalties and reputational damage. The total cost for non-compliance is currently deemed greater than $14M. 4 RCM solutions help organizations navigate this regulatory landscape by embedding compliance checks into workflows, automating documentation for audits, and staying up-to-date with changing regulations. This proactive approach to compliance not only reduces risk but also improves the accuracy and efficiency of the revenue cycle.

Key attributes of revenue cycle management solutions

Effective Revenue Cycle Management solutions share several critical attributes that enable them to optimize financial performance and enhance operational efficiency. When evaluating RCM solutions, healthcare organizations should look for the following key characteristics:

End-to-end coverage

Manages the entire revenue cycle from patient scheduling to final payment
Complements existing practice management systems to streamline financial operations
Provides a unified platform for all revenue cycle functions

Example: An RCM ecosystem that handles scheduling, eligibility verification, coding, billing, and collections within a single integrated platform.

Intelligent automation

Utilizes AI and machine learning to automate routine tasks
Employs robotic process automation (RPA) for repetitive, rule-based processes
Reduces manual data entry and associated errors

Example: An RCM solution that automatically codes encounters based on clinical documentation and updates claims in real-time.

Advanced analytics and reporting

Offers real-time financial dashboards and key performance indicators
Provides predictive analytics for denials management and cash flow forecasting
Enables drill-down capabilities for detailed analysis of revenue cycle performance

Example: A system that predicts which claims are likely to be denied and suggests preemptive actions to prevent denials.

Patient-centric financial experience

Offers clear, upfront cost estimates and explanations of benefits
Provides multiple payment options and flexible payment plans
Enables self-service portals for patients to manage their accounts

Example: A patient portal that allows individuals to view their bills, set up payment plans, and make payments online or via mobile app.

Compliance and security

Ensures adherence to healthcare regulations (e.g., HIPAA, HITECH)
Provides robust data security measures to protect sensitive financial information
Offers audit trails and reporting for compliance monitoring

Example: An RCM system with built-in compliance checks that flag potential regulatory issues before claims are submitted.

Real-time eligibility and benefits verification

Performs instant insurance eligibility checks
Provides detailed breakdowns of patient benefits and coverage
Updates patient financial responsibility in real-time

Example: An RCM tool that automatically verifies insurance coverage when appointments are scheduled and updates information at check-in.

Denial management and prevention

Identifies root causes of denials through pattern analysis
Offers workflow tools for efficient denial follow-up and appeals
Provides education and training to prevent future denials

Example: A denial management module that categorizes denials, assigns them to appropriate staff, and tracks appeal outcomes.

Continuous performance improvement

Benchmarks performance against industry standards
Identifies areas for process improvement and cost reduction
Provides ongoing training and support for optimal system utilization

Example: An RCM system that compares an organization’s key metrics to peer benchmarks and suggests improvement strategies.

Organizing for success with revenue cycle management

To successfully implement Revenue Cycle Management solutions, health systems must consider several key factors. By keeping these principles in mind, organizations can effectively optimize their revenue cycle operations and achieve financial goals.

Conduct a comprehensive revenue cycle assessment
1. Analyze current performance metrics across all stages of the revenue cycle
2. Identify pain points, inefficiencies, and opportunities for improvement
3. Benchmark performance against industry standards and best practices
Optimize existing technology and processes
1. Assess current RCM technology for underutilized features and potential upgrades
2. Identify and address user issues regarding existing systems
3. Explore opportunities for automation and improvement within existing systems to maximize efficiency with current and new technologies
Invest in staff training and change management
1. Provide comprehensive training on new RCM systems and processes
2. Educate all staff on the importance of accurate documentation and coding
3. Offer ongoing education to keep staff updated on best practices and regulatory changes
4. Encourage open communication about revenue cycle challenges and solutions
5. Recognize and reward staff contributions to revenue cycle improvement
Establish key performance indicators (KPIs) and monitoring processes for continuous improvement
1. Define clear, measurable KPIs for each stage of the revenue cycle
2. Use analytics tools to identify trends, patterns, and opportunities for improvement
3. Implement data-driven decision-making processes across the revenue cycle
4. Regularly review and act on insights generated from RCM analytics
Optimize front-end processes
1. Implement robust patient registration and eligibility verification processes
2. Develop clear financial counseling protocols for patients
3. Establish processes for accurate charge capture and coding at the point of service
Stay current with regulatory changes and industry trends
1. Establish processes for monitoring and implementing regulatory updates
2. Participate in industry associations and conferences to stay informed of best practices
3. Regularly evaluate new technologies and solutions that could enhance RCM performance

Sources

Best Revenue Cycle Management (RCM) Products