6 Reasons Medical Billing and Coding Are Critically Important
Revenue cycle management (RCM) involves all the financial processes of healthcare servi...
January 21, 2025
Revenue cycle management (RCM) is at the heart of every healthcare organization’s financial health. So why are so many practices and organizations still struggling with cash flow problems?
They lack high-quality RCM.
From patient registration to final payment posting, efficient revenue cycle management ensures a steady revenue stream, fewer administrative headaches, and a focus on delivering quality care.
With this in mind, the role of revenue cycle management automation has never been more crucial. So, what is automation in RCM? This article reveals:
RCM is about managing every financial aspect of patient care from the time they walk through the practice door to collecting payments. It involves several stages, including:
Unfortunately, each RCM stage presents unique challenges. One issue that stands out? The manual processes slowing everything down.
The good news? Revenue cycle management automation can vastly improve each stage and your practice’s financial health.
For healthcare providers looking to streamline operations while remaining competitive – automation is the key. Why? According to a Beckers Hospital Review survey, RCM has been plagued by:
By automating RCM processes, healthcare providers can prevent the above issues by using technology to perform tasks without human intervention. How does this approach improve your organization?
This is just a small snapshot of automation advantages. Read on to learn more in-depth ways this technology can benefit your practice.
Manual entry errors are a common issue in medical practices, leading to rejected or denied claims and lengthy payment cycles. By leveraging automation, such as using specialized billing software, providers can:
Delayed or denied payments often stem from inefficiencies in the revenue cycle. Automated payment processing solutions decrease turnaround times, allowing healthcare providers to focus on improving cash flow rather than chasing overdue payments.
According to the Medical Group Management Association (MGMA), case studies show that manually posting payments and denials takes 2.10 minutes per claim, compared to a rate of 2 seconds per claim with robotic process automation (RPA).
Automation tools like RPA optimize each step of the revenue cycle—from claims submission to back-end payment reconciliation. This technology increases the number of claims sent to payers and eliminates the rework needed to handle rejections and rebilling. Embracing this approach saves time and allows your staff to focus on higher-value tasks.
The Council for Affordable Quality Healthcare Index (CAQH) revealed that fully automating nine common revenue cycle management transactions in areas like insurance verification can save the U.S. healthcare system $16.3 billion.
Sounds great. But how can this save your practice money? According to the U.S. Bureau of Labor Statistics (BLS), medical assistants’ median national annual salary is $42,000.
By automating repetitive tasks and streamlining workflows, medical practices can reduce the need for additional administrative staff and lower operational costs, leading to substantial savings.
Automation can bridge patient communication and payment gaps, leading to better engagement and satisfaction. Here’s how:
Below, we explore significant areas in revenue cycle management that benefit from tech innovation and automation.
Claims processing is prone to inefficiencies without the right tools in place. Automation addresses these issues by checking whether the information is complete and accurate before sending claims. This process ensures that claims are:
Automated payment processing offers an expedited approach for collecting co-pays, deductibles, and post-service balances. Patients can pay via convenient portals, while providers enjoy faster reconciliation of payments into their systems.
To achieve true automation, integrating electronic health records (EHR) with RCM systems is essential. This integration enables seamless data flow, eliminates redundancies, and ensures a comprehensive view of both patient records and financial operations.
Research from HFMA and Guidehouse found that 71.7% of healthcare financial executives prioritize RCM tech, including automation, AI, and machine learning when earmarking investments. Respondents say such a focus can help providers counter upticks in denials. How is this possible? AI can help by delivering predictive analytics.
For example, AI can provide data-driven insights that help organizations make informed decisions and optimize their revenue cycle. AI-powered RCM can pinpoint:
Claim denials remain a major financial burden for healthcare providers. Automation offers robust denial management solutions by analyzing the root causes of denials, flagging issues in real time, and recommending the necessary corrections to prevent future rejections.
When implementing automation, healthcare providers must prioritize compliance. HIPAA-compliant automation in RCM guarantees that patient data will remain secure and adhere to regulatory standards while delivering the benefits of speed and scalability.
Adopting automation in revenue cycle management may seem like a daunting task, but the benefits are worth it. Here’s five ways healthcare providers can kickstart the process:
For example, The Revenue Cycle Management Technology Adoption Model (RCMTAM) is a peer-reviewed, five-stage model designed to help health systems assess their current state of RCM technology maturity.
Outsourcing services like medical billing can help strengthen your entire revenue cycle. For example, iSalus offers medical billing services that provide 100% transparency into your practice’s financial health. Their experts can handle:
Automation in RCM is no longer just about reducing errors or improving cash flow—it’s about creating a stronger foundation for a sustainable organization.
Need to set the stage for a more efficient, tech-driven practice? Contact iSalus today, where our team of experts can help you connect with advanced, scalable solutions that will allow you to succeed financially and provide a higher quality of care.