In a nutshell, Revenue Cycle Management (RCM) refers to identifying, collecting and managing the revenue of payers in proportion to the services provided. Revenue Cycle Management is prominently used in the medical realm.

To provide the patient with a value-based reimbursement backed by more well-rounded patient care has put this mandatory requirement upon the healthcare providers to closely examine the way they approach stating their bills and presenting their revenues. Usually, hospitals have poor billing practices, which may greatly affect the hospital’s funds. In worse cases, they may downgrade the hospital’s services, which may hamper their method of caring for their patients.

Revenue Cycle Management Challenges

The whole revenue cycle initiates when the said patient makes a successful appointment with the hospital, and he is subsequently provided with successful payment collection. But there are several steps in between which are required to be completed with adequate care. The loss in these cases is mainly owed to human error, which may lead to coding complexities, severe miscommunication, medical billing errors due to duplicate data, and missing information or misspellings that can result in lost revenue.

Factors That Can Affect RCM

The provider, in this case, has considerably less control over the payment protocol, as it is generally processed through the claim review and denial process. Although in hospitals, there are long waiting lines for getting this billing and claims, due to this long delay, the provider payments may not be processed, and they might get denied due to insurance eligibility issues. However, several factors go into making or breaking the process. Thus we shall look upon the same in the next section.

Fragmented administrative processes are one of the contributing factors to a mishap in this process. The front and the back end in the hospital administration usually operate on differential status. They generally have segregated priorities that are separate from each other. Thus there is a severe breakage of information flow at times which may lead to miscommunication. This fragmentation is required to be cured, which can help in Improving communication during patient intake about coverage eligibility. In addition, this can assist with payer coordination, claims reimbursement and may improve payment collections.

At times the hospital staff is also faced with eligibility issues, which leads to miscommunication with health insurance companies. This, at times, leads to neglecting the current customer base, which leads to mismanagement of the claims process. Even after the submission of the documentation, they can be rejected, or their claims may be wholly denied. Moreover, tracking claims on the part of the hospital administration can be a strenuous task. Further, pinpointing where problems originate can also become burdensome.


There are several benefits of a revenue cycle management system. First, RCM software can aid the inappropriate collection of Electronic Health Records. It can greatly aid in storing and managing specific patient billing records, leading to reduced billing. Moreover, this provides the patient with correct billing information by taking care of the accuracy factor in the billing procedure. Thus it is pertinent that such systems shall be integrated into most hospitals.