The new RCM: Going beyond billing and revenue cycle collections

There was a time when the words “revenue cycle management” caused excitement and fascination in the halls of many medical practices. Boring paper forms being replaced by “wizbang software systems” that automated claims submission created a world of wonder. Some of the systems were even available in the cloud, no server, CD-ROM, or tape needed.

Electronic submission, programmed-rule engines, and automated posting have led to a new standard of efficiency in medical billing. Claims have become easier to process and faster than ever to organize and follow-up on. Multiple systems claim to make this process so clean that only a fraction of claims require intervention. Yet, despite all these efficiencies, providers still have issues with their revenue cycle.

RCM was cited as the top technology spending priority for health systems in 2023. Why? If medical billing has been solved, then why the dissatisfaction with the revenue cycle? Simple, the revenue cycle involves more than just billing and collections.

If you want to address the revenue cycle today, you must look beyond claims submission. Look to areas that influence the revenue associated with these claims, as the root cause of problems may be ignored or significantly under-resourced.

Credentialing, provider enrollment, contracting, coding, and telemedicine are just a few areas that the modern practice must master. The American Academy of Professional Coders (AAPC) estimates an average of 10% to 30% are ignored, lost or denied.

Let’s break down two areas to focus on to boost your revenue cycle.

Most providers (if given a shot of truth serum) will admit that their practice of coding is mostly influenced by habit rather than expertise. Providers feel that if they stay in the middle of the curve with the complexity of visits rather than properly coding due to myriad factors, they will avoid attention that could lead to audits. Providers lose billions each year to incorrectly billed claims.  

However, undercoding not only represents a financial loss, but it is actually as dangerous as overcoding. The AAPC’s Audit Services found that 19% of office visits were being undercoded, albeit better than the 33% discovered by researchers in years past. Yet, the AAPC team concluded that more than 5% of services weren’t coded at all, in addition to the undercoding. The 2021 overhaul of evaluation and management codes triggered many of the challenges — and yet undercoding continues to abound.

According to the AAPC, the best way to detect and eliminate improper coding is to conduct periodic internal audits of coding, billing, and documentation. An internal audit should:

It’s best practice to share internal audit results with providers and coding and billing staff. Ensure appropriate education is completed and that you update compliance policies and procedures to prevent future errors. 

As America’s average population ages, the ranks of Medicare enrollees have swollen. To prevent the Medicare program from becoming bankrupt due to the medical spend of its growing patient base, the Centers for Medicare and Medicaid Services (CMS) has rolled out myriad programs to incentivize providers to manage patients in the lower-cost outpatient setting. From annual wellness visits to online care management, CMS is willing to pay. The challenge is providers may not be taking advantage of these opportunities. 

According to researchers from the Washington University School of Medicine, for example, only 24% of eligible Medicare patients receive and complete an annual wellness visit. These visits, which can be performed by a health educator, can pay up to twice the amount of an established patient visit and can be scheduled during off-peak times throughout the year.

Managing the revenue cycle is far more than the mechanics of billing and collections. Look beyond the transactions to find opportunities to improve your practice’s revenue.