Multiple layers of regulation have made American healthcare extremely complex. There is an elaborate, bureaucratic process for providers to enter and process patients electronic health records, fill out claims and finally get paid. On top of that, the covid-19 pandemic has not done any favors for healthcare revenue cycle management.  

The perennial debate around making care more affordable brings in changing regulation, making medical RCM more complicated. With numerous revenue cycle management vendors offering many solutions, it can get overwhelming for healthcare providers to pick the right one.  


A few pervasive misconceptions surrounding healthcare revenue cycle systems are added to this problem. If you’re a provider who’s apprehensive of a revenue cycle solution, you need to have a look at some common myths –  

10 Common Myths About Healthcare RCM

Myths About Healthcare Revenue

1. Automation Can Solve All Problems

Healthcare automation has gone a long way in improving the efficiency of medical workflows and billing activities. There are plenty of revenue cycle management vendors offering solutions to automate manual processes. But implementing it requires caution and a complete picture of your existing RCM system. You must know precisely how your billing and revenue workflows function before deciding to automate specific components. The only tasks that are better off being automated are repetitive and quantitative. In other words, avoid those tasks that require human staff to apply skills and ingenuity. 

Understanding this necessity needs consultation with IT experts who can give the best advice. Furthermore, implementing automated revenue cycle management solutions entails adequate training for the staff and subsequent support to keep things running smoothly. Integrated healthcare solutions and healthcare management systems that incorporate revenue cycle solutions always feature automation. So, it’s essential to make sure that whatever you are automating needs to be compatible with broader clinical, administrative solutions.       

2. Revenue Cycle Management Has Nothing To Do With Patient Care

Even though it does seem like medical attention and revenue cycle management are two completely unrelated aspects of healthcare, they’re not. Everything that happens within a hospital or a practice ultimately is about patient care. When clinicians use healthcare revenue cycle solutions integrated within practice management platforms, they optimize everything, not just billing and financial activities. As a result, more resources and time are left over to give to patients. Effective RCM systems also make it easy for patients to complete their payments and avoid waiting times.  

In other words, patients can get treated faster, and doctors have more time to give to patients. The payers too experience efficiency and lack of bottlenecks. To sum it up, competent HIPAA-compliant solutions for healthcare revenue cycle services are nothing short of a win-win for all stakeholders involved. That’s why it’s always practical to view Healthcare Revenue cycle Management and patient care as closely interlinked.  

3. Generic Plug-and-Play Solutions Improve Revenue Cycle Management

Numerous healthcare revenue cycle management companies are offering a plethora of solutions. While it might be tempting to purchase cost-effective ones, you must assess how it would affect established working styles. A solution that doesn’t mimic existing work routines might hinder non-medical operations. Additionally, the staff would need time and training to get used to newer healthcare revenue cycle services, which would affect the patient experience.  

So, it’s feasible to have an IT expert assess hospital workflows and develop customized medical revenue cycle management software in the long run. The best part, it need not even be installed on-premises.  

Cloud computing in healthcare has led to customized RCM solutions that need installation on hardware devices. They offer seamless healthcare interoperability, secure data backups, and scalability without additional hardware investment. Such platforms can be tailored to meet unique requirements in hospital revenue cycle analytics and medical informatics.     

So, try to know what exactly matches your requirements, and don’t shy away from a customized solution. It might take longer and cost a little extra, but it’s worth it.  

4. Out-of-Pocket Patient Payments Aren’t Significant

Out-of-pocket payments might not account for large hospitals’ revenue in urban locations. But they are significant in rural outpatient settings. The rising cost of healthcare has resulted in millions of Americans being underinsured and even uninsured. So, it helps both the providers and patients to have transparency in pricing, coupled with accurate estimates for out-of-pocket costs. Transparency in costs is known to establish efficient revenue cycle management in hospitals and ambulatory care settings, achieving better results in population health management. So, direct payments will benefit long-term healthcare revenue cycle management goals, and it is worth considering.   

5. Patient Engagement Is Independent Of Revenue

Healthcare only involves going to a doctor and getting a prescription for most people. But it’s not the same for patients with serious or chronic conditions. Such people need greater interaction with their providers, and a good patient engagement system with seamless electronic data exchange works wonders. 

Patient engagement is nothing but doctor-patient interaction beyond consultations and clinical admissions, and it entails educating patients and encouraging them to be actively involved in managing their care. On the face of it, patient engagement may not directly impact the healthcare revenue cycle.  

But that doesn’t mean they’re independent of each other. Regular interactions with doctors empower people to handle their care better and help doctors detect early signs of disease. Moreover, it reduces missed appointments and delayed payments while streamlining reimbursement processes.

These factors resulted in improved medical outcomes and healthcare revenue cycles. In addition to this, patient engagement is directly beneficial for medical records management as it helps providers keep people’s health information up-to-date. Providers would also be better off using custom healthcare analytics solutions to assess each patient and craft unique engagement strategies.  

6. Telehealth Services Reduce Revenues

A few payers refused to acknowledge telehealth services as similar to in-person services. This drove some providers to abandon telehealth services for fear of losing revenues. This might have been true in the immediate aftermath of the Covid-19 pandemic. However, both Medicare and Medicaid do provide coverage for telehealth services.  

The CPT codes have even been shared on their respective websites. The reimbursements for these services are the same as those for in-person clinical visits. This is extremely important for people living in distant rural locations.  

Because of large distances, people with low access to care will benefit from telehealth services. With payers covering the services, providers won’t experience loss of income or disruption to their revenue cycle management activities.

7. Investments in RCM Software are Risky  

This is one of the biggest misconceptions, especially among smaller clinics and singe-physician practices. RCM solutions digitize all or most of the workflows involved in revenue cycle management. In other words, a relatively small staff can perform multiple functions like entering patient data, charge capture, preparing claims, etc.  

Software for healthcare revenue cycle management eliminates the need for handling physical documentation. Moreover, it also minimizes the possibility of errors in medical coding. This goes on to reduce the chances of denials. So, RCM software lowers the operational overhead since a smaller staff can do more with greater productivity and lower denials.   

To sum it up, investments in good revenue cycle solutions go a long way in increasing revenues and generating high returns.

8. Outsourcing Healthcare Revenue Cycle Processes is Risky 

Companies that offer services related to medical billing only look after revenue generation and reconciliation. Moreover, such a company would report on the same to its clients. There is complete transparency about all the procedures and the necessary reporting.   

Repeated surveys and research have found that outsourcing healthcare revenue cycle management improves the efficiency of the process. The companies that manage these workflows are completely focused and bring years of experience and insight into it. Their management is solely dedicated to handling healthcare revenue cycle activities.   

Since the companies don’t provide other medical services, they are more flexible and adaptable to evolving regulations. A dedicated workforce trained in denial management, coding, and other relevant activities maximizes the productivity of the overall revenue cycle management process in medical billing.

9. Offshoring is Only For Reducing Costs  

While the immediate benefit of outsourcing healthcare revenue cycle management activities is cost savings, there are other advantages. Offshore companies also provide comprehensive assessments and provide detailed reports. Additionally, these companies are usually on par with the latest trends and enable their clients to make informed decisions.

10. Data From Billing Operations Isn’t Valuable 

The larger the hospital, the more data is generated from everyday healthcare revenue management operations. However, most healthcare organizations need to utilize this data. This might be due to negligence or a need for more knowledge about the benefits of data analytics. Nevertheless, operational data from billing holds lots of valuable insights.  

Data from revenue cycle management in healthcare highlights which patients and employees are driving profits. Moreover, it also identifies which payers are most likely to deny claims and which workflows drive losses. This information is useful for hospital managers to make decisions to boost productivity. The bigger an organization, the more important data analytics becomes.

How Would Value-Based Reimbursements Affect Medical RCM

It is no secret that healthcare in the United States is the most expensive in the world. Spending on medical services topped $4 trillion, more than the economies of all but a handful of countries. One of the main factors seen as being responsible for this is the existing fee-for-service model of reimbursements.   

Under the fee-for-service model, providers are paid for every service they offer. Needless to point out, this incentivizes many of them to provide too many services like tests, scans, etc. Amid the growing costs, the people and policymakers have been pushing for a change to a value-based model of reimbursements.  

Under the value-based model, providers will be reimbursed based on the clinical outcomes they achieve for their patients. However, this will require changes to existing healthcare RCM practices. The existing workflows require verifying health plans, coding clinical encounters, preparing claims, and processing payments. But this process would have to track patients’ progress and determine the reimbursement amount accordingly under value-based reimbursements.  

Additionally, the workflows for healthcare revenue cycle management would be even more difficult in the case of chronic diseases. Conditions such as diabetes, cancer, and heart problems require extensive coordinated care from multiple providers. In such cases, tracking and quantifying the number of reimbursements to be made would take a lot of work. Value-based models like bundled payments, Accountable Care Organizations (ACO), and Shared Savings help reduce costs.  

But mainstream healthcare revenue cycle management practices will need help adjusting for value-based models. This is because existing types of payments require documentation of medical services and their subsequent billing. However, under a value-based model, the criteria for activities involving the revenue cycle in healthcare would have to be different.  

The traditional healthcare revenue cycle management processes would have little relevance for value-based reimbursements. They would have to accommodate the outcomes as the basis for payments. In light of the growing push towards value-based payments, existing revenue cycle solutions would have to evolve their workings. In other words, value-based payments may not be suitable for current medical RCM practices. 


Healthcare revenue management is entwined with medical care. As regulation evolves to meet emerging technologies, providers will have to seek custom solutions to meet their requirements. This is especially true for smaller practices with one or a few physicians.

Doing so requires clarity and awareness about the best healthcare revenue cycle management practices. That, in turn, must start with an understanding of what is true and what’s not about RCM in healthcare. At a time when newer technologies like telehealth are changing the healthcare landscape, coupled with a push towards value-based reimbursement models, all stakeholders need to be well aware of every aspect of RCM.

OSP is a trusted healthcare software development company that delivers bespoke solutions as per your business needs. Connect with us to hire the best talents in the industry to build enterprise-grade software.


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