Value-based Programs

Three Factors that Affect RCM for physician practices in Healthcare

3 Factors That Affect the Revenue Cycle of Physician Practices

While every healthcare is committed to providing the best healthcare facilities to the patients and everyone around, they also need to make sure that their revenue management cycle doesn’t compromise. This is why it is essential to understand the physician revenue management cycle.

What is revenue cycle management healthcare means for physician credentialing practices? The revenue cycle for a physician practice means tracking payments and revenue collection from patients. It starts with registration and scheduling of patients, proceeds to insurance verification, co-pay collection, handling health records, coding of clinical procedures performed, charge entry, claim scrubbing and submission, payment posting, denial management, A/R follow-ups, and compiling collection statements.

More than 23% of the total healthcare providers in the United States are independent practices which are mostly comprised of solo physicians or a team of 2 – 5 physicians, and medical practices with 31 – 100 physicians represent 11%. These independent practices represent a major part of the medical providers and manage most of the care delivery system along with hospitals and large medical entities, treating millions of patients every year.

However, these small and medium-sized independent practices are facing financial challenges that started almost a decade ago when the HITECH act triggered technology-based reforms. These physician practices were required to adopt electronic health records (EHR) systems and many other clinical technologies that increased their budget and operational costs.

More than ever, medical practices are concerned about the collections and revenue targets, to keep the business operational. Billing and other financial processes require consistent working of dedicated resources to manage payment claims, payment follow-ups, and physician revenue cycle management healthcare.

What is the revenue cycle?

The revenue cycle is a combination of the front desk and back-office tasks that are linked together like a chain and even a small glitch in the workflow can disrupt the process. This is why unified processes that can bridge the communication gap between the front and back-office resources improve the revenue cycle.     

Every step of a revenue cycle must be taken accurately and an optimized workflow ensures that the provider would meet its revenue targets and is critical for the financial success of a practice. Various factors influence the revenue cycle and optimization which can increase collections.



Optimized front office processes

If the front office staff fails to register patients properly then the problems start right from the scheduling. It results in missed slots and increased wait time for patients. Similarly, the inability to verify patient insurance information and wrong data entry can mess up the revenue cycle right in the beginning. The front office plays a pivotal role in optimizing the revenue cycle with optimized workflow and pristine handling of the processes.

Physician practices must have an immaculate system of patient call handling and appointments, there must be a scheduling system integrated with the practice management system which can ensure steady patient check-ins.

Patient visits and optimal clinical flow     

After the front office, the most critical phase of a revenue cycle comprises the optimized functioning of patient visits and walkthroughs in the care process. The clinical segment of the revenue cycle is where visit documents are compiled. It is where details of the patient encounter are entered; the physician enters the clinical notes and submits them for further processing.

Errors and omissions at the clinical phase can negatively impact the revenue cycle. Medical billers prepare bills on the bases of clinical notes and completely depend on the information provided by a physician during a patient encounter. Missing information or mismatched medical procedures would result in the wrong preparation of medicals and would lower the chances of reimbursements.

What are the foundations of Revenue Cycle Management?

Revenue cycle management (RCM) is a process that healthcare providers use to manage the financial aspects of patient care. The primary goal of RCM is to optimize revenue generation and cash flow while ensuring that the provider is in compliance with regulatory requirements. The foundations of revenue cycle management include:

Patient Registration: The first step in the RCM process is patient registration. This includes collecting patient demographic information, insurance information, and other pertinent data necessary for billing and reimbursement.

Insurance Verification: After patient registration, the provider must verify the patient’s insurance coverage to determine the patient’s eligibility and benefits for the services provided.

Charge Capture: Charge capture is the process of capturing all charges for services provided. This includes capturing all procedures, supplies, and other services that are billable.

Coding and Documentation: Accurate and complete coding and documentation are essential to ensure that the provider is reimbursed correctly for services rendered. This includes assigning the appropriate codes for diagnosis and treatment and ensuring that all necessary documentation is included in the medical record.

Claims Submission: Once charges have been captured and coded, the provider must submit a claim to the patient’s insurance company or other payers for reimbursement.

Payment Posting: After the claim has been processed, the provider must post payments received from insurance companies, patients, and other payers.

Denial Management: Denial management is the process of identifying and resolving claim denials. This includes determining the reason for the denial and taking appropriate action to resubmit the claim or appeal the denial.

Reporting and Analysis: Reporting and analysis are critical to understanding the financial health of the provider’s organization. Providers must regularly review financial reports and analyze data to identify trends and areas for improvement in the RCM process.

In short, a successful RCM for physician practices requires efficient and effective management of all aspects of the revenue cycle, from patient registration to payment posting, denial management, and reporting and analysis.

Role of medical billing in revenue cycle management

The billing phase represents the most important part of a physician’s revenue cycle. Billing problems, such as entering the wrong CPT codes which are mismatched with the diagnosis, errors in ICD codes, faults in the patient demographics and patient health information, and absence of insurance verification, lead to a shattered revenue cycle. Billing is critical for successfully completing the revenue cycle, and the billers must be trained to code and accurately prepare bills, crosscheck and verify the information, co-pay collection and claim to scrub, prepare the EOB, and post payments.

However, it does not complete here and moves on to the phase where claims are submitted for reimbursements, payment follow-ups, claim denial management, account receivables, and compiling the patient statements. Optimization and management of the revenue cycle demand consistent attention of physician practices and when most of them already complain of burnout and draining of energies due to their indulgence in administrative tasks. This is why a majority of physician practices outsource the billing and revenue cycle management healthcare to teams that can help them achieve their revenue targets. RCM vendors are specialized in managing the revenue cycle of physician practices and with their knowledge and expertise make the revenue collection process smooth.


The Healthcare management cycle keeps evolving and the up-gradation in the physician revenue management cycle keeps occurring due to the fluctuation in the patients’ visits. These fluctuations also occur due to value-based service provisions, global pandemics, and technological advancements. Therefore, the day needs to manage physician revenue cycle management to provide efficient care and receive enough reimbursements.