Revenue cycle management (RCM) is a critical function of any healthcare organization, but some facilities struggle with it due to the complexities of the billing process. The ensuing financial consequences can hurt a healthcare organization's bottom line.
One of the best ways to mitigate RCM-related woes is to invest in RCM software. But to get the most out of it, healthcare organizations must familiarize themselves with RCM technology, the benefits of RCM software, and the available RCM software vendors.
What Is RCM Software?
RCM software is a suite of tools and applications designed to streamline the RCM process and reduce manual data entry. RCM software helps healthcare organizations automate RCM tasks, such as patient registration, insurance verification, claims processing, payment posting, and denial management.
RCM software is particularly useful for practices with complex billing codes and procedures, such as ophthalmology, radiology, and anesthesiology. These services must be coded accurately to receive reimbursement. Practices that use little-to-no variation in their billing or have a flat rate system, such as mental health providers, may not necessarily benefit from this type of software.
How big is the RCM software market?
The RCM software market is growing rapidly. According to ReportLinker's 2023 RCM Software Global Market Report, the industry was worth $41.72 billion in 2021 and is projected to reach $69.16 billion in 2026. That represents a compound annual growth rate of 10.6% across the five-year forecast period.
RCM Software Examples
Given how comprehensive revenue cycle management can be, there are different types of RCM solutions for different aspects of the cycle. Here are some of the top RCM software examples.
Patient estimate software
Patient estimate software is a revenue cycle management solution that helps healthcare providers accurately predict the cost of care for their patients. This type of software sources data on insurance plan benefits to generate highly accurate estimates, allowing hospitals and other healthcare providers to provide patients with an out-of-pocket cost breakdown before care. It can help patients better understand their financial responsibility before receiving services so that they can make informed decisions about their care. Patient cost estimate software can also allow you to auto-send estimates to patients via email, text, or letter and can process payments.
Patient estimates can improve patient satisfaction by providing transparency about the cost of care before treatment begins. With 87% of patients reporting a surprising medical bill in 2021, the need for patient estimate software has never been greater.
Real-time eligibility software
Real-time eligibility software is RCM software that helps healthcare providers confirm patient insurance coverage. This type of RCM software verifies a patient's health plan information to ensure the accuracy of their claims and reduce the risk of denials due to manual data entry errors.
The real-time eligibility process involves submitting a request for status verification to the patient's insurance carrier. The RCM software receives a response from the carrier that includes details about the patient's coverage and benefits, such as copays, deductibles, out-of-pocket maximums, and coinsurance amounts.
Thanks to advances in RCM technology, real-time eligibility software can also allow healthcare providers to submit claims directly from the RCM software and track the status of their claims.
Denial management software
Healthcare facilities are currently dealing with increasing claim denials, with as many as 12% of all claims denied in 2020. One way these facilities are fighting back is by investing in denial management software.
Denial management RCM software goes beyond the usual eligibility and payment processing features of RCM technology. This software helps healthcare providers identify common reasons for denials and take corrective action to reduce or eliminate them. It helps organizations reduce costs associated with denials, improve cash flow, and increase patient collections.
Denial management software uses automated tools, analytics, and prevention strategies to identify potential denials before they occur. This helps organizations proactively address any issues that may arise during the claims process. It also allows them to appeal denied claims and resolve them faster.
Underpayment detection software
Underpayment detection RCM software helps healthcare organizations identify and recover lost revenue due to underpayments. It can also help providers identify any opportunities for additional reimbursements, such as filing secondary claims or negotiating with insurance carriers.
The software uses sophisticated algorithms to analyze claims data to detect any discrepancies or errors in the payment amount that providers may have overlooked and can help ensure that all claims are accurately coded and billed according to industry standards and regulations.
Underpayment detection RCM software is a powerful tool for healthcare organizations seeking to maximize reimbursement efforts. By helping them identify and recover lost revenue, these solutions can help organizations improve their overall financial performance and increase their cash flow.
Payer contract analytics software
Payer contract analytics software helps healthcare organizations better understand the terms of their payer contracts and ensure they get the best possible reimbursement rates for their services. This type of RCM software utilizes data from a variety of sources to identify any discrepancies between what the provider is being paid and what they are entitled to under the terms of their contract.
Payer contract analytics software also helps providers track their performance against the terms of their contracts and identify any issues that may be causing them to fall short.
Why It's Necessary To Use RCM Software in 2023
Technology plays a massive role in today's healthcare industry, with numerous types of healthcare software helping facilities provide better patient care, with RCM software top among them. The right RCM solution can help healthcare facilities address several challenges.
The healthcare industry is experiencing a labor crisis, with over 2 million posts going unfilled as of February 2022. While this shortfall affects all departments, the financial department is particularly hard-hit. An estimated 25% of finance leaders in healthcare organizations say they need at least 20 more employees to meet the staffing needs of their RCM departments.
RCM software can help organizations cut down on manual data entry and paperwork, reducing the need for extra staff and the risk of errors due to manual entries. With the software's analytics capabilities, healthcare facilities can better identify process inefficiencies and make improvements to get the most out of their current staff while still meeting their RCM needs.
Increased denial rate from health plans
The healthcare industry is facing a growing issue with denied claims. Between 2016 and the end of 2020, denial rates increased by 23%, even though 86% of denials can potentially be avoided. The result is lost revenue for healthcare organizations and decreased satisfaction for patients.
One of the best ways to address this challenge is by implementing RCM software. By streamlining the entire revenue cycle process and automating many tedious tasks associated with billing and reimbursement, you can reduce errors that could lead to denials and speed up the overall process. RCM software also provides valuable insights into potential improvement areas to further reduce denials.
By automating eligibility checks, RCM software can ensure that providers only submit claims for patients who are eligible for reimbursement. This reduces the number of denials due to no coverage.
New price transparency regulations
As the healthcare industry continues to evolve, new regulations are being implemented to ensure patients have access to accurate and transparent information about their care. In particular, the passing of the No Surprises Act in 2020 brought about a host of new regulations for healthcare providers.
One such regulation concerns price transparency, which requires every practice to provide "good faith estimates" to self-paying and uninsured patients. This means that before providing any medical services, practices must provide an estimate of the cost for those services.
In addition, RCM software also helps ensure that providers don't inadvertently overcharge patients and make costly mistakes that could lead to fines or other penalties.
Inflation and its upward pressure on healthcare costs
One of the most significant challenges facing the healthcare industry today is inflation. The average cost of healthcare services in the U.S. has been increasing faster than the rate of inflation, which burdens providers and patients alike.
Healthcare providers must get creative to address this challenge. RCM software provides analytics-driven solutions that allow health facilities to understand their financial situation better. With this information, they can make informed decisions about how to manage their finances to reduce the impact of inflation. For example, they can use analytics to identify areas where they are overspending or where they could save money.
The Benefits of RCM Software
Now that we've discussed some of the challenges that RCM software can help address, it's time to look at the benefits of investing in this software. Here are some perks of upgrading your healthcare facility with the latest RCM software.
Increased staff productivity and less time spent on manual work
Manual processes can be incredibly time-consuming, especially when it comes to billing and collecting payments. With RCM software, you can reduce manual work by automating tasks like verifying insurance benefits or calculating patient estimates. This frees up your staff to focus on more important tasks.
RCM software also helps streamline workflows, allowing many tasks to be completed faster. This includes filing insurance claims, verifying benefits, and collecting payments.
Decreased days in AR
The accounts receivable (AR) metric is a crucial indicator of how efficiently your healthcare facility collects payments from patients and their insurance providers. The fewer days in AR, the better it is for your health facility.
RCM software can help you reduce the number of days in AR by automating many manual processes that often cause delays. For example, let's say a healthcare provider uses RCM software to automate their billing and claims management processes. They can quickly and accurately submit claims to insurance companies and track the status of those claims in real time. This allows them to identify any issues or errors early on and take corrective action before the claim is denied or delayed.
Increased up-front collections
RCM software can verify patient insurance eligibility in real time and estimate patient responsibility based on insurance coverage and the service provided. This information can be communicated to patients before treatment, so the patient understands their financial responsibility and can make payment arrangements.
RCM software can also send automated reminders to patients about their upcoming appointments and the amount they owe. These reminders can provide customized payment options and encourage patients to pay upfront. RCM software can also send automated reminders to patients about their upcoming appointment and the amount they owe.
Imagine a patient needs an MRI scan, which costs $1,000. The RCM software checks the patient's insurance eligibility and determines that the patient is responsible for a $200 copay. The software calculates the patient's financial responsibility based on their insurance coverage and the service provided, estimating that the patient owes $400. The provider's staff can then communicate this information to the patient before the MRI scan and offer them the option to pay the $400 in full or set up a payment plan.
Reduced bad debt
Healthcare can be expensive, and there's always the risk that some patients won't be able to pay their bills. Regardless of the cause, unpaid bills can be a major drain on resources for healthcare facilities.
RCM software can help reduce the risk of bad debt by offering features such as predictive analytics and patient estimate tools that let patients know how much they will need to pay for services. This helps reduce the number of unpaid bills, as patients are more likely to make timely payments when they know how much they owe.
In addition, RCM software can help healthcare facilities identify patients at risk of defaulting on payments by using predictive analytics. This can help them take preventative measures to ensure they get paid in a timely manner.
Negotiate better terms with payers
Payers can often be difficult to negotiate with and may offer unfavorable terms, but a good relationship with them is essential for the organization to remain profitable.
With RCM software, you can easily monitor payment trends and quickly identify discrepancies between what the payer has agreed to and what they are paying. You'll be able to quickly negotiate better terms with your payers so that you get paid in full for your services.
RCM software also helps you keep track of your payer contracts and automatically generates reports that provide detailed insights into your billing operations. This can help you identify any areas that need improvement, so you can make the necessary changes to maximize your reimbursements from payers.
Improved patient experience and loyalty
Patients want to receive care from healthcare providers who can offer them a seamless and efficient experience. RCM software has a patient estimate feature that allows patients to know the expected cost of their care before they receive it. This helps avoid surprise medical bills, which 75% of Americans say would significantly set them back financially.
Having a robust RCM system also helps ensure that patients don't encounter any delays or errors in their billing. This can foster patient loyalty and satisfaction, which is essential for healthcare organizations to remain profitable.
Lowers cost of training and supplies
Having an in-house RCM team is expensive and time-consuming. You must hire and train staff, purchase the necessary software, and manage operations. Retraining staff when there are changes to codes, regulations, and other industry requirements is also an additional cost.
But with RCM software, you can reduce these costs. The software is preprogrammed to keep up with industry standards and regulations. It also automates many manual processes, meaning you'll have fewer training costs and won't buy as many additional supplies, such as filing cabinets and paper.
Better record keeping
RCM software provides an organized and reliable way to track financials and can generate reports in real time about the performance of different revenue streams. You can then make more informed pricing, staffing, and other strategic decisions.
The software also records every transaction and tracks changes in the system. This helps detect errors and fraud quickly, giving you greater control over your financial processes and ensuring you comply with HIPAA and other patient privacy laws.
Data analytics and insights
RCM software provides valuable insights into the performance of your healthcare organization. The software can track trends and provide real-time analytics about patient visits, revenue streams, and billing cycles to give you an idea of what areas need improvement.
You can also use RCM software to improve patient satisfaction. The data can provide insights into patient wait times, staff performance, and other factors that affect the overall experience.
RCM Software Vendors
As the popularity of RCM software grows, there are a number of vendors offering solutions for healthcare organizations. Some of the key players in this market are listed below.
One of the most recognizable SaaS vendors in the market, MD Clarity offers solutions that help enhance clarity into revenue cycles. One of their flagship products, Clarity Flow, helps organizations conveniently provide patients with accurate Good Faith Estimates and is the perfect solution for complying with The No Surprises Act. With Clarity Flow, health practices can seamlessly generate, automate, and distribute estimations via text, email, or mail. They can also collect deposits directly from online quotations.
Another solution, RevFind, makes it effortless for practices to track down and reclaim lost income due to underpayments from health plans and insurers. Investigations, appeals, and revenue recovery are made more accessible than ever before.
MD Clarity's RCM software also helps with contract modeling, so you can easily track and compare the performance of insurance contracts.
Another leading vendor in the RCM software space, PointClickCare, has built a comprehensive suite of solutions geared toward skilled nursing facilities, senior living communities, and home healthcare organizations. Their cloud-based technology allows them to offer secure access for providers to their clinical and operational data.
The PointClickCare Revenue Cycle Management solution provides users with easy access to all of their accounts receivable data, including patient eligibility information and claims status. The software also automates the process of submitting electronic claims to payers and automatically reconciles payments received. This helps reduce manual billing processes, allowing healthcare organizations to focus on providing excellent patient care.
Allscripts Revenue Cycle Management Services (RCMS)
Allscripts RCMS is a comprehensive solution designed for large health systems and hospitals. The software automates revenue cycle processes to help organizations reduce denials, accelerate cash flow, and eliminate the need for multiple third-party billers and facilitators.
Allscripts RCMS provides end-to-end financial management features, including patient intake, claims submission, coding, and billing, and helps manage accounts receivable and contract management. It also includes business intelligence tools that help organizations identify opportunities for improving the financial performance of their practices.
Dentrix is a market leader in RCM software for dental practices. It helps simplify billing cycle management by automating manual tasks and streamlining processes. With Dentrix, users can easily access patient information, schedule appointments, document clinical notes, and submit claims with just a few clicks.
The software allows staff to easily track and monitor insurance payments, payments from patients, write-offs, and other financials. In addition, Dentrix helps with contract management to ensure that all procedures are correctly billed per the payer agreement terms.
The Cost of Revenue Cycle Management Software
Several factors affect the cost of revenue cycle management software, including practice size and specific features needed. Generally, larger practices with greater patient volume pay more for software solutions than smaller medical facilities. The more features and services, the higher the cost.
The cost of RCM software also depends on the scope of services desired. For instance, some solutions are designed to automate processes such as appointment scheduling and billing. Others offer a comprehensive suite of revenue cycle management tools that include coding and claims submission.
Revenue Cycle Management Software Integrations
One of the top qualities of RCM software solutions is their ability to integrate with existing software. Integration helps streamline processes, eliminating manual tasks and reducing errors.
Most RCM software solutions are designed to integrate with existing EHR and PM software, allowing you to manage patient information, billing cycles, payments, and more from one centralized platform. Additionally, many solutions offer API support for connecting to third-party applications. This allows for greater customization and increased efficiency in managing the revenue cycle.
Why Should You Stick With Software Instead of Outsourcing RCM?
There are two main approaches to Revenue Cycle Management: outsourcing and software. While RCM outsourcing has been a popular choice for some businesses, revenue cycle management software offers many advantages that make it the ideal choice. Here are four of them.
Using RCM software ensures data security
With an in-house application, you have control over who can access and view your data, as well as which parts of it are encrypted and secure. This ensures that your valuable information remains safe and confidential. When you outsource, you must trust another party with this sensitive data, a risk you don't need to take if you use RCM software.
Software is nimbler and more flexible
The software can adapt quickly to any changes in your business, making it possible for you to respond quickly and effectively. It also allows you to customize the system to fit your needs and helps you stay ahead of the competition. Outsourcing can be difficult to scale up or down as needed, while software can easily adjust to huge fluctuations or minor tweaks.
Software ensures easier collaboration
RCM software allows multiple parties to collaborate on revenue cycle management tasks, which helps streamline processes and make the most of everyone's time. You can easily monitor project progress, assign tasks, and review results without going through a long chain of emails or phone calls.
There are cost efficiencies associated with using software
Software is typically more affordable than outsourcing RCM, as it doesn't require additional labor or other resources of outsourcing. You only need to worry about the initial cost of setting up the system and can save money on consulting fees and other costs associated with third-party vendors.
MD Clarity: Easy RCM Software for Providers
The right software can help make revenue cycle management easier and more efficient. MD Clarity's comprehensive RCM software suite is designed to take the complexity out of managing the financial side of your practice. With solutions like Clarity Flow and RevFind, you can provide accurate price estimates, collect more up-front payments, and track underpayments, maximizing your revenue potential. Other solutions, like contract modeling, make contract negotiations a breeze. Schedule a demo today and start the journey to hassle-free revenue cycle management.