Revenue cycle management

Revenue cycle management (RCM) is the process used by healthcare systems in the United States and all over the world to track the revenue from patients, from their initial appointment or encounter with the healthcare system to their final payment of balance. It is a normal part of health administration. The revenue cycle can be defined as, "all administrative and clinical functions that contribute to the capture, management, and collection of patient service revenue."^[1] It is a cycle that describes and explains the life cycle of a patient (and subsequent revenue and payments) through a typical healthcare encounter from admission (registration) to final payment (or adjustment off of accounts receivables).

Overview

The revenue cycle begins when a patient schedules an appointment and it ends when the healthcare provider has accepted all payments. Errors in revenue cycle management can lead to the healthcare provider receiving delayed payments or no payment at all. Because the revenue cycle process is complex and subject to regulatory oversight, healthcare providers can turn over their revenue cycle management to companies that handle this complex process with specialized agents and proprietary technologies to manage healthcare provider revenue cycles.^{[citation needed]}

Proper revenue cycle management ensures that billing errors are reduced so that reimbursements from the insurance companies are maximized. Revenue cycle management teams are responsible for maintaining compliance with coding regulations, such as the ICD-10 code update. Using the right coding for services rendered by a practice ensures that insurance claims can be processed and that the practitioner is compensated for all of their services rendered.^{[citation needed]}

In 2014 the revenue cycle management market was valued at $18.3 billion^[2] and at $260 billion in 2020.^[3]

Revenue cycle management is often considered a segment of the greater healthcare IT industry which includes HIS, RIS, EHR, PACS, CPOE, VNA, mHealth, healthcare analytics, telehealth, supply chain management, CRM, fraud management, and claims management.^[4]