RCM And Cash Flow: 5 Considerations to Streamline Practice Operations

Revenue cycle management can have a dramatic impact on a medical practice’s cash flow. To help streamline your cash flow operations, consider these five tips.

Having a well-run medical practice goes beyond delivering a superior patient experience. Behind the scenes, the administrative side of the practice must operate at high levels to ensure a premium patient experience — and the ability of the practice to continue providing it. Namely, managers need to keep money coming through the door. More than filling appointment books, it means having sound revenue cycle management practices.

Revenue cycle management (RCM) focuses on managing a practice’s revenue stream — specifically, billing properly for services rendered. Ultimately, the goal of RCM is to ensure timely and accurate billing and collection of payments, which in turn impacts the practice’s cash flow. Good RCM improves cash flow in the same way poor RCM stagnates it.

• In a good RCM model, the practice bills for services rendered in a timely manner, submits claims to payers correctly, and follows up on denied claims quickly. In doing so, providers improve accounts receivable, which facilitates positive cash flow.
• In a poor RCM model, the provider might be slow to bill for services rendered, submit inaccurate claims, and lack follow-through on denied claims. As a result, errors compound to delay revenue and create a cash flow crunch.

In many ways, RCM and cash flow are two pieces of the same puzzle. Managing the revenue cycle impacts cash flow by way of accounts receivable operations. Focusing on quality in RCM management means fewer headaches when the time comes to collect.

Proper RCM is critical in running a successful practice. When it comes to improving it, providers should consider these solutions to common bottlenecks and pitfalls:

1. Improve the preregistration process: A streamlined preregistration process reduces errors and improves the accuracy of patient information. This, in turn, prevents delays in payment and reduces the risk of denied claims.
2. Use electronic health records for service capture: Electronic health records (EHRs) are efficient for capturing patient services. They not only reduce input errors but also promote accuracy in billing for documented services — which, again, can reduce claim rejection.
3. Check (and double-check) coding: Accurate coding is essential in RCM. Implement a system to check and double-check the accuracy of all codes before submitting claims. Having a credentialed coding expert on staff can be an investment that pays for itself.
4. Establish a claims denial process: Denied claims are a major source of revenue loss for providers. Develop a process for handling denied claims to identify and address issues, as well as to resubmit amended claims in a timely manner.
5. Set clear metrics for RCM: Key performance indicators (KPIs) help practices measure the effectiveness of their RCM approach. Consider tracking KPIs like days in accounts receivable (DAR), gross collection rate, and net collections ratio.

Cash flow is vital to any practice’s success. If your cash flow is inconsistent or obfuscated, work backward to understand why. Start with any RCM challenges you’re facing. Often, working with a specialist like TruBridge can shed light on RCM bottlenecks and solutions for restoring your practice’s revenue stream.

Done right, revenue cycle management has an incredibly positive impact on a practice’s cash flow. By improving how you interact with patients, submit claims, process data, and measure RCM operations, you’ll create consistent, reliable cash flow and enable clinicians to do what matters most: provide a top-notch patient experience, visit after visit.

Learn how you can master RCM and cash flow.