What is Revenue Cycle Management?


Revenue cycle management (RCM) is a critical function in any healthcare entity.  Managers do not have to know every detail about RCM, but if the RCM is on-site, they must understand:

  • RCM reports and how to spot and be proactive about down-trends;
  • performance measures for RCM staff and how to coach staff to improved performance; and
  • the billing system and relationship with electronic claims, payments and remittance advice.

If the RCM department is outsourced, managers must be able to:

  • generate ad hoc reports to assess billing company performance;
  • hold the billing company to its performance guarantees; and
  • stay abreast of changes in payer regulations and legislation and not rely solely on the billing company’s advice.

No matter what else a manager accomplishes or does well, if the RCM isn’t tight and right, nothing else will count.

What exactly is RCM?

Revenue Cycle Management encompasses all facets of the process of contracting for, accounting for and collecting the practice’s revenue. It includes:

  1. Setting fees.
  2. Contracting with payers.
  3. Identifying patients’ correct payer sources (eligibility) and plans (benefits).
  4. Counseling of patients prior to a high-cost procedure or surgery or needing financial assistance.
  5. Documenting the services provided and producing charges for the services.
  6. Collecting from outpatients at time of service.
  7. Entering the services and patient payments into the computer system.
  8. Filing primary and secondary payer claims.
  9. Posting payments and contractual adjustments from payers.
  10. Researching and appealing payer denials and underpayments.
  11. Writing off small balance accounts and bad debts.

You notice that I didn’t mention sending statements.

Posted in: A Career in Practice Management, Collections, Billing & Coding, Day-to-Day Operations, Medicare & Reimbursement

Leave a Comment (13) ↓


  1. Angelo Iannello May 19, 2011

    Great article Mary.

    This is a subject that will grow in importance in the future with time. I will be following.

    A. Iannello

  2. Elizabeth Houser June 7, 2011

    Please include me in your subscription list for newsletters.

    • Mary Pat Whaley June 7, 2011

      Hi Elizabeth,

      To get my posts by email, type your email address into the subscription box in the upper right-hand corner of my website. Thanks very much!

      Best wishes,

      Mary Pat

  3. Jorge Quintero July 19, 2011

    Great Article! I’d like to be included in the news letter distribution list.

    • Mary Pat Whaley July 20, 2011

      Hi Jorge,

      I added you to the list. Please check your inbox for a verification message from “FeedBurner Email Subscriptions”, the service that delivers email subscriptions for Manage My Practice.com. You will need to click a link listed in this message to activate your subscription. If you don’t see a confirmation e-mail in a reasonable amount of time please check your bulk/spam folder.

      Thanks for your participation!

      Best wishes,

      Mary Pat

  4. Krystal September 17, 2011

    I would LOVE to subscribe to your newsletter. I have basically held every administative position available in a medical office from receptionist to billing and coding and was very recently offered my first office manager position in a small office… I have a feeling I will become one of your most loyal readers! VERY informative…

    • Mary Pat Whaley September 17, 2011

      Hi Krystal,

      Congratulations on your first managerial position! I am delighted to have you as a MMP reader, and feel free to let me know which topics would be most helpful for you to read on the site.

      Best wishes,

      Mary Pat

  5. Constance J. Ooten March 19, 2012

    This is an excellent article. Are there classes you can take on this subject that are geared towards management, instead of billing personnel?

    • Mary Pat Whaley March 20, 2012

      Hi Constance,

      There are some classes offered through professional organizations such as MGMW (mgma.com) and PAHCOM (pahcom.com), but nothing that is a true curriculum preparing you to step into a management position. Maybe that is something I should consider offering. Thoughts anyone?

      Best wishes,

      Mary Pat

  6. Constance J. Ooten July 18, 2012

    Thanks Mary. I’m currently in a management position, but always looking to learn more, especially about RCM. I wanted to avoid taking an entire course geared towards billing personnel. I will research the information you indicated in your response. Again, very helpful.

    • Mary Pat Whaley July 18, 2012

      Hi Constance,

      Glad you found us!

      Best wishes,

      Mary Pat

  7. Priscilla November 7, 2012

    I truly enjoyed your article. I worked in RCM in the past and enjoyed every minute of it.

    • Mary Pat Whaley November 7, 2012

      Hi Priscilla,

      Glad you liked it!

      Best wishes,

      Mary Pat