Readers Write: Why RCM is the Most Interesting Opportunity in Healthcare

Why RCM is the Most Interesting Opportunity in Healthcare
By Kim Waters

Kim Waters, MBA is principal advisory at CereCore.

Revenue cycle management (RCM) isn’t for everybody, but it certainly is for me. I actually enjoy talking to someone about their revenue cycle plans and opportunities. In fact, I maintain that RCM is the most interesting opportunity in healthcare. If you can’t relate, perhaps the reasons I’ve listed below will convince you. If you agree, I hope that you will share new reasons to add to my list.

Research supports RCM opportunities. In a 2023 study, HFMA reported on the rising cost of claims, with as much as 60% of claims not resubmitted and the average denial rate’s total percentage of gross revenue at 11%. What’s more is that they found that the cost per claim appealed is $118 and the denial rate is increasing 20% year over year. In an era when budgets are tight and margins are lower, organizations need to improve on these numbers to survive and eventually thrive.

Opportunities for improvement can be easy to see. Reconsider any processes or solutions that:

• Are still accomplished on paper.
• Involve a fax machine.
• Have not changed in the last five years.
• Are repetitive.
• Don’t involve peer or higher-level review.
• Consistently receive low engagement scores.
• Are not documented.

Every organization has opportunities for quick wins, while other areas for improvement may not seem so obvious but are just as promising.

Reporting is key. The best RCM decisions are made based on actionable data. On average, healthcare organizations use around 30 vendors across the revenue cycle. Disparate data sets complicate clear, actionable reporting and limit the ability to see patterns and identify areas of opportunity. RCM leaders need effective reporting and road mapping tools to tell their story, presenting a fresh vision around the use of technology and resources and the impact they can make.

Important processes are up and downstream from revenue cycle. From patient access, financial clearance, provider documentation to discharge and final payment for services, RCM processes run through the entirety of a patient’s experience and involve touchpoints with all the departments that a patient’s care requires. This presents complexity and opportunity for RCM, starting with adoption of a unified vision and strategy, change management practices, governance policies, and system interoperability development.

Each organization holds different improvement opportunities. The areas to focus on are a matter of an organization’s current state, their strategic goals, the needs of their community, and their competitive position. That’s what makes it fun. No two systems are alike, but sound revenue cycle management processes can support any endeavor and improve financial performance. In turn, improved financial performance is fundamental to realizing improved quality, outcomes, and all the meaningful reasons we chose healthcare in the first place.

The Healthcare Financial Management Association (HFMA) recently released the Revenue Cycle Technology Adoption Model (RCMTAM), a benchmarking framework to help healthcare’s financial leaders design a personalized RCM modernization roadmap, with the goal of correlating technology improvements to financial performance. RCMTAM is specifically for healthcare and is providing much-needed insight and direction for uncovering and addressing opportunities.

RCM calls for compassion. Working on improvements to revenue cycle management processes looks and feels like improving cash flow, increasing reimbursement rates, reducing denials, and enhancing overall performance. All of the above play a part in the delivery of care to the people who entrust their care to your organization. What’s a more interesting opportunity than that?