Revenue Cycle Management (RCM) Workflows for Healthcare Providers

Revenue cycle management (RCM) is a key function of healthcare operations and financial stability. In this piece, we’ll dive into the RCM workflows used by Accounts Receivable (A/R) and revenue teams and how to make RCM operations more effective:

What are Revenue Cycle Management (RCM) Workflows?

RCM workflows are the operational steps that healthcare providers take to get paid for patient services.

RCM workflows are the bridge between high-level revenue cycle strategy and day-to-day business operations. Consistent RCM processes, clear staff responsibilities, and advanced software help healthcare organizations capture more revenue more quickly with less revenue leakage.

Steps in the Revenue Cycle Workflow

To be effective, RCM workflows must be integrated throughout the patient journey, from pre-registration through final payment. This requires managing patient data, maintaining clinical records, verifying insurance eligibility and benefits, billing patients, filing claims for reimbursement, posting payments, analyzing financial data, and more.

Generally speaking, RCM workflows include the following steps:

1. Eligibility Verification - Perform insurance eligibility checks to ensure the patient’s insurance coverage is valid, verify applicable benefits, and identify coverage issues that could affect the claim process later on.
2. Preregistration - Collect patient information prior to the appointment to streamline the registration process. This includes contact information, insurance coverage, and patient demographic details.
3. Pre-Authorization - Obtain required approvals from insurance providers for certain procedures before service delivery. This step ensures that services are covered and avoids unexpected denials later in the process. Pre-authorization is especially important for high-cost procedures or services that require payer review under specific coverage policies.
4. Coordination of Benefits (COB) - Determine the order of insurance responsibility for patients with multiple insurance plans. This step ensures that claims are submitted to the appropriate primary and secondary payers in the correct order, reducing delays and avoiding claim denials due to improper sequencing.
5. Pre-Service Financial Estimate - Provide patients with clear, upfront cost estimates for services before their appointment. This step aligns with price transparency regulations and helps patients plan for out-of-pocket expenses, improving trust and reducing financial stress.
6. Registration - Confirm and update patient information at the time of service, collect copayments and deductibles, and ensure referrals or authorizations are in place as needed.
7. Patient Financial Counseling - Offer educational resources and financial counseling to patients to help them understand their medical bills, payment plans, and financial assistance options.
8. Coding and Documentation - Document the diagnoses and procedures involved in a patient’s care, so medical coders can accurately translate documentation into universal codes (e.g. ICD-10, CPT).
9. Charge Capture - Translate clinical services into billable charges (automatically or manually) and submit those charges to the patient’s health plan. This step ensures all services are accurately accounted for in the claim.
10. Claims Scrubbing - Use automated tools to review claims for errors or inconsistencies before submission. This step helps ensure that claims are accurate and complete, improving the clean claim rate and reducing the likelihood of denials or rejections.
11. Claim Submission - Submit claims to the appropriate payers, ensuring all information is complete and accurate to avoid unnecessary rejections by the insurance company or health plan.
12. Secondary Payer Billing - Submit claims to secondary insurers for costs not covered by the primary payer. This process ensures that all eligible charges are reimbursed efficiently and minimizes delays in collecting payments from multiple insurance sources.
13. Remittance Processing - Review the payment or denial information from the payer. If necessary, correct errors and resubmit the claim to the insurer or health plan.
14. Payment Posting - Log payments and associate them with the correct patient account and specific service, ensuring all records reflect current balances and payments.
15. Payment Reconciliation - Cross-check payments received against submitted claims to identify discrepancies, such as underpayments or overpayments. This step ensures that financial records are accurate and helps identify areas for follow-up or adjustment.
16. Insurance Follow-Up - Follow up with insurance companies to check on claim status, address denials, and resolve any issues that delay payment.
17. Patient Statements and Billing Communication - Send clear and detailed patient statements, reminders, and notifications about outstanding balances to improve transparency and payment compliance.
18. Patient Collections - Collect outstanding balances directly from patients, ensuring the process is patient-friendly and includes options for payment plans.
19. Refund Management - Process refunds for overpayments from patients or insurance companies. Managing refunds promptly builds trust and maintains compliance with payer contracts and regulatory requirements, while also ensuring accurate account balances.
20. Reporting, Analytics, and Compliance Reviews - Monitor and analyze key performance indicators (KPIs) such as claim denial rates, days in A/R, and clean claim rates. Use this data to identify inefficiencies and implement targeted improvements. Regularly review workflows for adherence to regulatory requirements, such as the No Surprises Act or payer-specific policies, to mitigate compliance risks and optimize operations.

How to Optimize Your RCM Workflow

Better RCM workflows translate to more efficient staff, less time spent in A/R, and more stable cash flow for healthcare providers. But what does it mean to optimize RCM?

Here are six key areas to consider for RCM workflow optimization:

Automate Steps to Save Staff Time

Certain steps in the RCM workflow are excellent candidates for automation. Eligibility verification is a prime example: nine out of ten eligibility verification checks were automated as of 2022. Prior authorizations, patient registration, and coordination of benefits (COB) processes are increasingly automated as well. Going forward, more healthcare providers will see the benefits of automation for other RCM tasks, like patient billing support and predictive analytics for payment behavior trends.

By automating simple and repetitive tasks, healthcare providers can reduce the administrative work associated with managing the revenue cycle. This enables staff to spend more time on complex tasks, like resolving complex claims, and work that requires the human touch, like communicating with patients.

Categorize A/R Tasks

Healthcare A/R tasks fall into four primary categories:

1. Billing - including pre-billing activities, claim edits, etc.
2. Insurance A/R - including claim denials, rejections, and appeals
3. Cash Posting - including payment posting, reconciliation, and refunds
4. Self-Pay A/R - including patient support, financial counseling, and bad debt write-offs

Each of these categories has its own goals and KPIs. While there should be crossover in important areas—like the technologies used across teams—they have unique needs in terms of staff training, management priorities, and necessary steps. Revenue leaders should carefully consider the RCM workflow steps necessary for each A/R function and optimize accordingly.

Review staffing and workload

Managing the healthcare revenue cycle is complex and requires a skilled, well-trained team working together. From the start of the RCM workflow to the end, staff need adequate time to verify patient information, review complex claims, perform specialized medical coding, troubleshoot issues, provide patient financial counseling, and so on.

Compare staffing levels to recent trends in A/R workload to ensure you have the right number of staff on board. Ask questions like:

• How many claims do you process monthly?
• What is the productivity target for claims processed per hour, and are you meeting that target on a regular basis?
• Approximately how many staff hours should it take to meet that target?
• How many employees are needed, based on that number of staff hours?
• Does that staffing level align with your target cost to collect?
• Can we use technology to reduce time spent on any manual, simple, and/or repetitive tasks?

Of course, the right quantity of staff is only the beginning. Revenue and A/R teams need to be well-trained and held accountable for individual and team productivity. Managers should commit to monitoring productivity metrics and working with staff members 1:1 or in small groups to improve key skills. This includes training on new regulations and payer requirements, as well as coaching during complex or challenging RCM tasks. This kind of performance management demonstrates a commitment to developing staff skills, which improves employee satisfaction and retention.

Analyze data regularly

Creating better RCM workflows requires understanding current performance in several areas: productivity data about staff performance, claims data about the effectiveness of claims submissions, RCM data to assess financial performance, and patient data to understand health outcomes and patient satisfaction.

Monitoring RCM KPIs regularly helps revenue leaders identify issues sooner and dig into the root causes. Disparate factors—like seasonal trends, payer-side changes, and staffing changes—can combine to affect RCM KPIs in many ways. For example, a Director of Revenue sees an upward trend in days in A/R over the past three months, with a sharp uptick in the past 2 weeks. Cross-referencing these dates with claims data, they see a decrease in clean claims submitted to a specific payer, who recently changed claim submission criteria. They work with revenue managers to schedule a refresher training and Q&A session with staff to improve the quality of claim submissions and ultimately reduce days in A/R.

Modern RCM software includes dashboards that managers can use to make data collection and analysis much easier. AI-enhanced RCM tools take this one step further, learning from massive quantities of financial data to proactively flag potential issues and recommend specific action(s).

Improve insurance provider coordination and follow-up

Claim denial rates are up in recent years, and back-and-forth communication with insurers requires a significant amount of staff time. Focus on improving clean claim rate or first pass yield to reduce the amount of time staff spend working with insurance companies and health plans.

First, review claim rejections and the explanations provided in 277 rejections, Medicare Return to Provider (RTP), and 835 denials. Digging into this data will help isolate the area(s) of improvement for the RCM workflow. For example, high claim denials from incorrect patient info may indicate an issue in preregistration/registration, whereas denials from incorrect procedure codes points to a problem with medical coding workflows and/or clinical documentation.

Also review your process for secondary claim submissions, i.e. claims submitted to the second payer for costs not covered by the primary payer. Ensure the secondary claim workflow is set up to be quick and relatively straightforward to avoid unnecessary delays.

From there, implement workflow improvements and RCM technology to reduce avoidable errors like inaccurate patient information or incorrect codes. Use automated claim reviews and other tools to improve the accuracy of claim submissions and reduce time spent on insurer follow-up. This helps reduce the administrative cost of managing denied claims—a $20 billion challenge for healthcare providers.

Improve the patient financial experience

Paying for healthcare is a source of stress for many patients: more than half of U.S. consumers are concerned about their ability to pay an unexpected medical bill. These concerns have led to greater price transparency in healthcare and “No Surprises” rules that address unexpected out-of-network bills at in-network facilities.

Improving the patient billing experience—and the financial experience overall—can also make a significant difference. Simply put, this means making it easy for patients to review, understand, and pay their medical bills.

• Review: Patients should be able to review medical bills using a patient portal, a text-to-pay link, and/or an easy way to request a new copy. Providers should be able to send automated bill reminders and communicate via the patient’s preferred method(s). Patient portals must be accessible and usable for all.
• Understand: Patients should be able to find clear guidance on common billing questions via the patient portal, provider’s website, billing documentation, or contacting the provider. Providers should initiate open communication about costs prior to services and generate clear and understandable billing statements. Healthcare organizations should be able to provide patient support online, via phone, or in person; this may include patient financial counseling or walking through payment plan options together. Financial information and educational resources about insurance patient payment responsibilities should be available in multiple languages.
• Pay: Patients should have multiple payment options with simple, user-friendly payment workflows (no login required) that function well on mobile devices and larger computer screens. Providers should be able to offer personalized payment plans to fit the needs of individual patients’ financial situations. This involves offering flexibility in payment schedules and amounts, balancing patients’ needs with cash flow constraints.

In addition to the best practices above, providers must avoid separating the clinical experience from the financial experience. It’s important to have financial discussions alongside clinical conversations so patients can make informed decisions and providers can decrease the stress and confusion associated with healthcare costs.

Find ways to have financial conversations upfront without sacrificing quality of care. For example, a revenue cycle director in Ohio described using a tracker board to ensure staff discuss the cost of care with patients at the right time, e.g. when they are stable and not actively receiving treatment and before they are discharged. This helps providers set expectations about payment responsibilities at a time when the patient is able to listen and ask questions.

AI-Powered Software for Your RCM Workflow

Collectly’s AI-powered software improves the financial experience for patients and improves RCM for providers. Collectly is HITRUST i1 certified for information security and works with any EHR or PM software system.

Collectly offers a virtual check-in process, point-of-service payment technology, post-service billing workflows, and comprehensive patient billing support. The Collectly AI assistant answers real-time billing questions from patients, allowing providers to focus on insurance follow-ups and more complex patient interactions.

Collectly offers a virtual check-in process, point-of-service payment technology, post-service billing workflows, and comprehensive patient billing support. The Collectly AI assistant answers real-time billing questions from patients, allowing providers to focus on insurance follow-ups and more complex patient interactions.

See how Collectly helped CleanSlate collect over 1,600 outstanding patient payments within one month and increase patient revenue by 250% overall.