Question 1

1. What are revenue cycle management companies?

Accepted Answer

Revenue cycle management (RCM) companies manage the full billing and collections workflow for healthcare providers. Their work typically covers patient eligibility and benefits verification, prior authorizations (when required), charge capture, medical coding support, claim creation and submission, payment posting, denial management and appeals, patient billing, and collections reporting. The goal is to reduce delays, lower denials, and improve the percentage of revenue that gets collected.

Question 2

2. How much do RCM companies charge?

Accepted Answer

RCM pricing depends on scope, specialty, claim volume, and payer mix. Many vendors charge a percentage of monthly collections (commonly in the 3% to 7% range) for end to end RCM services, while others use per claim, per provider, or flat monthly fees for specific functions such as coding, AR follow up, or denial management. Contracts may also include setup fees, clearinghouse costs, or add on fees for prior authorizations and patient statements, so the best comparison is total effective cost versus the lift in net collections and cash speed.

Question 3

3. Are RCM companies suitable for small practices?

Accepted Answer

Yes. Small practices often benefit when they lack specialist billing staff, face frequent denials, or need tighter cash flow control. An RCM partner can provide access to trained coders, denial experts, and mature billing systems without adding payroll overhead. The best fit is a vendor that supports your specialty and EHR or PM system, provides clear service level targets, and offers transparent reporting so you can confirm results month over month.

Question 4

4. What metrics should practices track with RCM partners?

Accepted Answer

Track Days in Accounts Receivable to measure how quickly revenue turns into cash, Net Collection Rate to measure how much of allowed revenue is actually collected, and Denial Rate to monitor claim quality. Also track First Pass Resolution Rate, Clean Claim Rate, AR aging buckets (0 to 30, 31 to 60, 61 to 90, 90 plus), appeal success rate, patient responsibility collection rate, and write offs by reason. These metrics show if billing accuracy and follow up performance are improving.

Question 5

5. Can RCM companies reduce claim denials?

Accepted Answer

Yes, when the partner focuses on prevention and not only rework. Denials fall when eligibility and authorization checks are consistent, coding and documentation gaps are caught early, claims are scrubbed before submission, and payer specific edits are maintained. A good RCM partner also runs denial root cause analysis, fixes recurring front desk or coding issues, and tracks appeal timelines so recoverable dollars are not missed.

Question 6

6. Is outsourcing RCM better than in house billing?

Accepted Answer

It depends on your staffing stability, claim complexity, and current performance. Outsourcing often works well when turnover is high, payer rules are hard to keep up with, denials are rising, or cash flow is inconsistent. In house billing can work well when you have experienced staff, strong processes, and tight control over coding and patient communication. Compare both options using measurable outcomes such as net collections, denial rate, and Days in AR, along with total cost and operational burden.

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