What Is Healthcare RCM (Revenue Cycle Management)?

Healthcare revenue cycle management (RCM) is the process a provider uses to get paid for patient care, from scheduling and registration through coding, claim submission, payment and collections. Good RCM means more claims are paid, in full, and sooner.

The stages of the revenue cycle

Scheduling and registration: capturing the patient's demographics and insurance.
Eligibility and prior authorization: confirming coverage and getting payer approval where it's required.
Charge capture and coding: translating the care delivered into diagnosis (ICD-10-CM) and procedure (CPT/HCPCS) codes.
Claim submission: sending the claim to the payer, usually electronically as an 837 transaction.
Adjudication and remittance: the payer decides what to pay and sends a remittance advice (835).
Payment posting and denial management: recording payments, then fixing and appealing denied or underpaid claims.
Patient collections: billing patients for deductibles, copays and coinsurance.

Metrics RCM teams track

Days in A/R: how long it takes to collect.
Clean claim rate: the share of claims accepted on the first submission.
Denial rate: the share of claims payers reject.
Net collection rate: what was collected compared with what could have been collected under contract.
Cost to collect: what the revenue cycle costs to run, per dollar collected.

Where RCM stops

RCM software is very good at calculating what a provider ought to be paid and at managing the work of collecting it. It can't make payers pay faster. Even a well-run revenue cycle leaves weeks or months between delivering care and getting paid. Two things help there: modelling how each payer actually behaves, and turning the receivables into cash with medical receivables financing. RevenueLab models your payers' processing delays, denial patterns and underpayments, so you can see what will actually come in the door.

Frequently asked questions

What does RCM stand for in healthcare?

RCM stands for revenue cycle management: the process of getting paid for patient care, from registration and coding through claim submission, payment posting, denial management and patient collections.

What is the difference between RCM and medical billing?

Medical billing, which covers preparing and submitting claims and following up on them, is one part of RCM. RCM covers the whole cycle, from scheduling and eligibility checks before care through coding, payment posting, denials and patient collections after it.

What are the most important RCM metrics?

Common RCM metrics include days in accounts receivable, clean claim rate, denial rate, net collection rate and cost to collect.