Revenue Cycle Management + Infographic

Posted by Susan Berndt on March 31st, 2020
Susan Berndt
Susan is a creative marketing professional with a demonstrated history of working in the hospital & health care industry. Susan joined Smart Data Solutions in 2016 focusing on marketing strategy, campaign execution and creating an inbound marketing funnel. She has over 10 years of marketing/advertising experience and over 12 years of customer service experience.

Revenue Cycle Management (RCM) is an important part of understanding how providers track their claims submissions, denials, and payments. The RCM flow is the process healthcare facilities and providers use to track patient encounters and claims from registration and appointment scheduling to the final payment of a balance.

This process is typically completed when the Electronic Remittance Advice (ERA) 835 transaction is routed from the payer, back to the provider, closing the claim payment loop.

Patient Pre-Authorization, Eligibility & Benefits Verification

During patient pre-authorization, the insurance provider or plan determines whether a prescription, service, or medical device is approved under a member’s coverage. Depending on the scope and type of service, some insurers may require obtaining prior authorizations, especially when a desired treatment or procedure is generally not considered medically necessary. Medical emergencies may be an exception, as no pre-authorization can occur due to the time range in which the emergency occurs. Obtaining prior authorization is a crucial step in seeking payment for services, especially when it’s not a common procedure and wouldn’t generally be considered medically necessary outside of rare cases.

One of the biggest stalls in the medical billing cycle is issues due to member eligibility and benefit coverage. If prior authorization is obtained, providers will need to pay close attention to the information they share and submit to the member’s insurance. They will need to review what their plan actually covers and any copay and accumulator information. Benefits eligibility can be discussed prior to making appointments to ensure proper in-network benefits.

Patient Encounter and Claim Submission

After the patient has been treated the claim must be submitted to the insurance carrier for payment. Practice management systems and medical coding specialists will prepare the claim with the correct Current Procedural Terminology (CPT) and International Classification of Diseases (ICD) codes to document the services performed during the patient encounter. Often, these codes will be used by insurance providers to derive proper payments for the medical bill.

Once the carriers pay their appropriate portion, an explanation of payment (EOP) will be sent to the provider. This EOP submission will include the payer’s responsibility total, the payment amounts, and any copays, coinsurance, or other amounts that would be the patient’s responsibility.


A claim paid in full will mean all of the payments have been collected and posted to the account. If the payment amount the patient is responsible for is beyond what they can afford to pay, arrangements may need to be made between a provider’s billing department and the patient to work out a payment plan or settlement structure. Claims that are late or not paid in full are at risk of going to a collections agency. If a claim was rejected for payment by the insurance carrier this will often begin an appeals process. During an appeal, the provider will need to submit additional information to the payer to explain why the claim should be paid and listing any exceptions, reasoning, and medically necessary situations.

Revenue Cycle Management

Revenue cycle management allows healthcare and insurance providers to preserve, manage, and improve upon patient care as it revolves around the billing process. RCM can reduce the time from service to receiving payment, just by tracking each step diligently along the way. It can work within any IT system, ePHI system, or billing systems. Smart Data Solutions knows how important it is to track a claims journey, from beginning to end. Our clients face challenges along the revenue cycle that we want to help alleviate with our advanced IT systems and machine learning processes, to ensure accurate claims processes and data.

Leave a Reply

Notify of

Recent Articles

View All 

Why 2020 is the Year to Get Rid of Your In-House OCR ...

If you’ve been using an OCR (optical character recognition) technology software, then you understand the benefits of ...
Read Article

Healthcare Claims Processing Workflow: Tools and Processes ...

If we're going to talk about how to improve efficiency within healthcare claims processing, we should start at the very ...
Read Article

The Steps of IT Risk Management in Data Capture

IT risk management is defined as the procedures an organization puts in place to protect data from potential risks and threats, ...
Read Article

Why handle the heavy lifting of your claims workflow when a smart team enhanced by AI can?

Achieve peace of mind, reduced costs, and greater process efficiency by automating and consolidating your data workflow.

Start Customizing Your Solution