Published: Dec 12, 2022
Workflow Automation

Revenue Cycle Management Automation: All You Need to Know

Rex H.
Rex H.
8 minute read
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The pandemic has rapidly accelerated revenue cycle management automation in healthcare. And the advancements in tech solutions have brought artificial intelligence and machine learning to all industries, including healthcare.

Yet, healthcare practices continually struggle with increasing productivity and decreasing costs. Revenue cycle automation can deliver significant improvements in the revenue cycle process, helping to accomplish both of these metrics.


What is RCM automation?

Revenue cycle automation (RCM) is the process of automating repetitive, rules-based, transactional exchanges. It streamlines:

  • Tedious processes and workflows
  • Reduces labor costs
  • Flags inefficiencies and opportunities for increasing revenue
  • Reduces time to complete tasks
  • Improves the customer experience.

Various methods of revenue cycle management automation can improve your outcomes.

Types of automation and how they help RCM

Revenue cycle management encompasses a range of tasks, from pre-authorization to quality reporting. Multiple tasks in each workflow are amenable to automation. Thus, combining different types of automation can help you optimize your revenue cycle management for the best results.

Robotic process automation (RPA)

Robotic process automation handles tasks in a fraction of the time it would take a human to do them. RPA works around the clock tirelessly without the risk of human errors.

You can increase your standardization using scripted processes. These processes are linked to other applications and resources, such as health information systems, data input apps, application programming interfaces, and data repositories.

RPA solutions are scalable across departments and physical locations, but they're limited because they can't change processes without human input. Thus, the greatest benefit of RPA is creating your own 24/7 virtual workforce.

Machine learning (ML)

Machine learning is a type of artificial intelligence that analyzes large sets of data to build predictive models. Many complex algorithms make up these models by drawing on statistical techniques and data. They continuously learn, iterate and improve.

Much of the hype around machine learning in healthcare has centered on the clinical side. However, predictive models can be applied to revenue cycle management automation through the aggregation of large data sets for solving complex problems. ML can automate labor-intensive workflows and provide insights that aren't available through other sources.

Natural language processing (NLP)

Natural language processing is a type of artificial intelligence that allows computers to understand human speech. It also enables computers to extract information from unstructured data sources. For instance, it can pull relevant information, such as a patient's account number, through audio inputs.

Optical character recognition (OCR)

Optical character recognition is a form of artificial intelligence that lets computers read the text in images or scanned documents. OCR can generate an invoice from a scanned medical record, eliminating the need for repetitive data entry.

AI in revenue cycle management: is it here?

Artificial intelligence is not new in many industries. It's incorporated into many of the services you use every day to generate predictions and attempt to improve your experiences. From streaming services offering suggestions to customer service portals that automatically surface the information you're searching for, AI is already a part of our lives.

However, is AI in revenue cycle management automation a viable option? While it hasn't been widely adopted in healthcare — for those willing to be early adopters — AI can address major pain points and increase revenue.

One example highlights AI's ability to process arduous tasks related to prior authorizations. An AMA study found that 86% of physicians rate the burden of dealing with prior authorizations as high or very high. These are labor-intensive tasks on both sides, consisting of a series of transactional interactions.

Prior authorizations are among the costliest tasks for healthcare providers. This makes them an ideal candidate for automation. However, despite the high costs and promising benefits of managing them with AI, AI's adoption rate has remained low.

Revenue cycle management is difficult to scale because of its complexity, which is why there's a tremendous amount of work that goes into submitting a claim and getting it paid. Various transactions are required at every step along the way. Therefore, AI offers the option to optimize revenue cycle management without needing to scale tech employees amid a global talent shortage. Healthcare providers who are willing to adopt AI technology can simplify all aspects of RCM while drastically improving outcomes.

Revenue cycle management workflows that can be automated

The first step in determining the optimal method for revenue cycle management automation is determining the workflows that will benefit the most from automation. Breaking down each workflow into components will illustrate which tools are best suited for the job.

Eligibility verification and patient registration

Insurance eligibility verification and patient registration are the first steps in the healthcare revenue cycle. Automating these processes has a considerable return on investment (ROI) since it reduces claim denials and improves cash flow. Even when you resubmit claim denials, and they're approved, the reimbursement time is slowed, increasing days in accounts receivable (AR). When you have an accurate benefits verification, you can ask patients to pay the correct amount upfront. This reduces patient balances and the need for accounts to go to collections later.

Good faith estimates and other cost estimates

The No Surprises Act went into effect in 2022. While transparent billing benefits patients, it's an administrative burden on many facilities and providers. However, it doesn't have to be. Automating good faith and other cost estimates can be as beneficial for you as it is for your patients. It increases customer satisfaction, billing and accuracy and improves your revenue. Good faith estimates can be time and labor-intensive to perform manually but are easy to automate with software.

Submitting claims

Medical claims processing is one of the most essential functions in revenue cycle management. However, the process of submitting claims involves extensive and time-consuming paperwork that is rife with the potential for expensive errors that can cause delays and rejections. Automating the claims submission process can reduce costs, decrease errors, speed up claims processing, reduce claim denials, and improve patient satisfaction.


As late as 2018, 77% of doctors' offices still sent paper bills to their patients. This is yet another example of how the healthcare industry has been slower to embrace technological advances than most other industries.

Paperless billing and reminders are less expensive, less work, and preferred by most patients. In addition to reducing costs associated with paper bills, email and text message billing helps preserve patient privacy. Although it's certainly possible for electronic communications to be accidentally exposed, it's much less likely than someone seeing a paper bill that was left on a counter.

Automating collections also lets you choose a personalized approach for each patient that's more likely to motivate them to comply. Patients who are happier with their care and experience settle their bills more quickly.

Denied claims reworking and appeals

When you're processing a large number of claims every week, even a small percentage of denied claims can have a significant impact on your revenue. Many denied claims are appealable, but the costs associated with manually re-filing an appeal may be higher than the revenue generated by the appeal.

Automating the appeal process eliminates human errors, such as incorrect or missing data, lack of documentation, or coding errors. Correcting errors that lead to rejection before claims are submitted is the most cost-effective method of denial management. Automated scripts can find these errors that are commonly overlooked.

Claim underpayment detection and appeals

Underpayments are another form of lost revenue. Finding and detecting underpayments should be a top priority for revenue cycle management automation. Underpayments can be harder to detect unlike denials. Like denials, they need to be appealed and recovered.

Healthcare practices often write off underpayments. They can be appealed, but they rarely are. By implementing an automated process to detect underpayment, you can recover a significant amount of revenue that would otherwise be lost.

Payer contract analysis and reporting

Payer contracts can be complicated to analyze. Understanding how you're being reimbursed and why you're not being fully reimbursed, in some instances, can help your practice identify crucial issues. You can compare your reimbursements to Medicare's current rates by analyzing fully executed contracts for your top ten payers against reimbursement per current procedural terminology (CPT). Doing this analysis for the top 25 CPT codes per payer would be intensely laborious if you conducted it manually. Automation makes it practically effortless.

Benefits of RCM automation software

Automating your revenue cycle management will bring many benefits to your practice, such as:

Reduce AR days

The number of days an account spends in AR reflects the amount of time it takes to collect the outstanding balance from insurance providers and patients. Healthcare providers calculate AR days to speed up collection efforts and determine if some bottlenecks or obstacles are causing your billing operation to lag or stall. Although the average range for AR days is 30 to 70 days, if you have accounts that are routinely over 50 days, it could indicate that your financial operations are under stress and interfering with optimal business operations.

Improve patient experience and loyalty

Although it might not seem that accurate billing is related to patient satisfaction and loyalty, the patient experience isn't limited to clinical care. It begins with patient registration and continues until the final bill is paid. At every point along the way, their interactions with your practice will influence their experience. In the beginning, providing patients with an accurate good faith estimate establishes trust and gives your patients a realistic expectation of what they'll have to pay.

Increase staff productivity

Automating repetitive administrative tasks will free up your staff to focus on high-level tasks that add value to your patients. Computer scripts can perform some tasks much more efficiently than humans, but they can never replace your staff. Instead, your staff will be able to perform duties that require the human touch and can't be outsourced to automated workflows.

Scale financial operations intelligently without having to rely on increasing headcount

When you automate your revenue cycle management, it's like increasing your workforce without having to hire additional people. You can easily clear any backlogs without overworking your current staff.  

Achieve compliance with price transparency laws

The No Surprises Act went into effect on January 1, 2022 and enforcement is expected to begin in 2023. There's still a lot of confusion as healthcare providers scramble to comply. Automation will allow you to achieve compliance with price transparency laws easily without falling into the quagmire that traps so many organizations.

Recover more revenue from insurance companies

By establishing accurate benefits eligibility, optimizing your claims to avoid rejection and denial, detecting and curing underpayments, and appealing denials, you'll recover more revenue from payers that would otherwise be written off. When you're paying your staff to handle denials or underpayments, you have to consider the cost of recovering the payments versus the amount recovered. With an automated system, you don't have to worry about that.

Automate revenue cycle management with MD Clarity

MD Clarity brings transparency to the revenue cycle. Our solutions offer transparency to your patients and your staff. You can easily comply with the No Surprises Act and send good faith estimates via mail, email or text. Your patients can make upfront payments and deposits on their chosen payment plans directly from the estimates.

As you move along in the revenue cycle, you can easily determine how your contracts are performing so you can negotiate from a position of strength. Having the data to project the cash flow impacts of any contract changes will let you use that knowledge to determine the value of your contracts. If you have appeals that can't be handled by automated scripts, you can assign them directly to staff and track the status in your dashboard.

MD Clarity allows you to reduce your bad debt, cost-to-collect ratio, and AR days. Schedule a demo to learn more.

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