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Understanding the Medical Billing Revenue Cycle Process

by Nathan Zachary
medical billing revenue cycle

Keeping medical practices of all sizes financially healthy is crucial to sustain in the modern healthcare industry. In addition, healthcare organizations strive to improve the health conditions of patients. However, maintaining an efficient medical billing revenue cycle process is also important for practices. Healthcare providers offer many services to the patients which involve millions of procedures. Likewise, they perform surgeries and check-ups to save lives and improve health outcomes. To stay financially successful, healthcare providers should streamline the revenue cycle process but let’s see how we can define RCM.

What is RCM in Healthcare

Collecting the revenue of these services from insurance companies and all the processes involved is called revenue cycle management. In addition, there are several payments involved in the medical billing process and the revenue cycle revolves around it. When the patient makes the appointment with the medical practice, it is the first step of the revenue cycle. Similarly, the RCM process ends with the patient collections. Now, we will take a look at the steps of RCM in medical billing to understand the revenue cycle process completely.

Steps of Revenue Cycle Management


Setting up appointments with a medical practice is the first step of the revenue cycle process. Similarly, providers verify the eligibility of the patients in this step and require prior authorization from the insurance company. Likewise, the practice staff creates a patient account which shows the medical histories and coverage details of the patients. These details are captured with the help of electronic health records (EHR) and the patient intake process is complete.

Point of Care

This step involves the patient encounter and starts when the patient actually visits the medical facility. In addition, the patient can come for an initial visit or outpatient procedure. Similarly, it can be a follow-up visit with the healthcare provider. Also, this visit can be a remote visit in the telehealth domain. In this step, any mentioned event can occur and the practice staff may demand an up-front cost.

Submitting Claims to Payers

This is a crucial step of the RCM billing cycle and requires focus and attention to ensure accurate claim submission. Failing to submit the claim accurately may result in potential revenue leakages creating a negative effect on the RCM cycle. In addition, appropriate CPT codes should be submitted to get timely reimbursements from payers. To perform this step seamlessly, the practice staff should keep the clinical documentation appropriate and complete. Finally, the staff of medical practices determine whether the claim is accepted or denied.

Claims Acceptance

The clean claim submission increases the chances of approval from the insurance companies. Similarly, accurate claims with appropriate codes according to the procedure performed are accepted. On the contrary, errors and mistakes in the coding may result in revenue losses and the claim gets rejected. Therefore, medical practices should submit claims vigilantly. Further, insurance companies evaluate the claims on the basis of information submitted by practices. Also, the correct documentation and the medical necessity leads to payments from insurance payers.

Claim Denials

In case of denied claims from payers, the practice staff needs to find out the mistakes in the claim submission process. Similarly, the correction in the claims and resubmission should be executed for getting payments. Also, practices may appeal to the decision of the insurance company in case of denials. After the review of the claim by the insurance company, the payer sends the explanation of benefits (EOB) to the patient. So, this breakdown helps the patient to understand what benefits the payer covers and what the patient needs to pay.

Patient Payments

This is an important part of the medical billing revenue cycle process in which providers send the details of a patient’s financial responsibility. In addition, this step makes sure that providers and payers have agreed on what the patients need to pay. Also, the patients can pay the whole amount at once or discuss the details with the practice staff. This is the final step where the medical practices finally determine what patients owe. As a result, the revenue cycle process is complete if all the steps are carried out efficiently.

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