At A Glance
Modern revenue cycle optimization leverages artificial intelligence (AI) and automation to help healthcare organizations capture revenue and maintain a healthy cash flow. This article outlines proven strategies for streamlining operations across the revenue cycle — from patient access and collections to claims and payer contract management.
Key takeaways:
- Revenue cycle optimization improves revenue cycle management at every stage of the revenue cycle process — creating cost-saving efficiencies and accelerating time to reimbursement.
- Implementing RCM optimization strategies can help healthcare organizations streamline the revenue cycle and build lasting financial stability.
- RCM tools that utilize automation, AI, machine learning and predictive analytics further optimize the revenue cycle, while improving the bottom line and supporting compliance needs.
Today’s healthcare landscape is riddled with operational and financial challenges for organizations. While providers face a growing number of obstacles — such as complex billing processes, high costs of care and evolving regulatory needs — revenue cycle leaders also have unprecedented access to revenue cycle management software to boost financial resilience.
What is revenue cycle optimization in healthcare?
Revenue cycle management optimization in healthcare streamlines the processes that connect the financial and clinical aspects of patient care, known as revenue cycle management (RCM).
The ultimate goal of RCM is to minimize claims denials, accelerate reimbursements and maximize revenue. Organizations use revenue cycle management optimization to analyze the revenue cycle, create operational efficiencies and deliver cost savings, ultimately increasing cash flow.
Without RMC optimization, organizations risk serious revenue leaks at every stage of the revenue cycle process, from wasted staffing costs to uncompensated care — and even bad debt. To ensure a revenue cycle that operates seamlessly, healthcare organizations typically target several key areas for optimization, including patient access, collections, claims management and payer contract management.
Over the last several decades, RCM optimization solutions and strategies have gone through numerous technological evolutions — with paper-based, manual processes now giving way to more sophisticated software-based solutions that often incorporate automation, artificial intelligence (AI), machine learning and predictive analytics. Implementing modern RCM optimization solutions, like those offered by Experian Health, allows revenue cycle leaders to build smarter, more profitable reimbursement cycles.
Why healthcare providers need RCM optimization
Financial pressures, including rising claim denials, compliance hurdles, and challenges with patient collections, can all disrupt healthy revenue cycles. Administrative inefficiencies are often to blame. Error-prone manual processes and lack of integrated systems that communicate changes to insurance information or payer requirements are just some of the key culprits that can put organizations at risk for delayed reimbursements, revenue leakage or bad debt.
Over the next five years, the size of the revenue cycle management market is expected to climb to $238 billion. Healthcare organizations are facing a myriad of operational and financial challenges, including rising healthcare costs, staffing shortages, ongoing payer complexities, ever-evolving regulations and shrinking operating margins. To stay competitive and financially resilient, today’s revenue cycle leaders are recognizing the need to adopt RCM optimization solutions — and rapidly.
When organizations start optimizing the revenue cycle, the financial payoff is tangible. With Experian Health’s suite of revenue cycle management software, organizations have successfully facilitated $4.9 billion in annual collections, made 2,700 payer connections, processed 175 million claims and cleared more than $3.2 billion in annual eligibility transactions.
With Experian Health’s revenue cycle management solutions, organizations have facilitated $4.9 billion in annual collections, made 2,700 payer connections, processed 175 million claims and cleared over $3.2 billion in annual eligibility transactions.
Proven strategies for revenue cycle optimization
With revenue cycle optimization, there isn’t a one-size-fits-all approach to create efficiencies that boost the bottom line — and increase operating margins. However, organizations can improve RCM processes by implementing these five proven revenue cycle optimization strategies.
1. Use digital eligibility and insurance verification tools
Using digital eligibility and insurance verification tools minimizes reimbursement roadblocks and helps providers get paid faster. More than half (56%) of providers report that patient information errors are the leading cause of claims denials, creating bottlenecks in claims management and headaches for staff. Without a complete and accurate view of a patient’s payable insurance benefits, deductibles and co-pay thresholds, providers run the risk of denied claims or non-reimbursement, and often lose money on costly reworks.
Automating eligibility checks throughout the entire patient financial journey, with tools like Experian Health’s Insurance Eligibility Verification, reduces the need for error-prone manual data entry — while ensuring cleaner claims submissions, accelerating reimbursements and reducing medical billing errors. Real-time coverage and benefits updates that integrate with existing systems and interfaces keep patient insurance information consistently up to date, allowing staff to leverage data analytics to further streamline operations.
2. Automate claims submission
Claims submission is a critical stage in the healthcare revenue cycle — and one that is prime for optimization. Incorrect patient information, insurance information, and other key details when submitting a claim often result in delayed or denied claims.
With 46% of denials caused by missing or incorrect information, reducing claims submission errors and providing early intervention for denied claims and needed reworks is critical. Adopting automated claims management solutions, like ClaimSource®, reduces the need for error-prone manual processes, while improving accuracy and efficiency in the claims editing and submission process. Other claims management tools, such as Claim Scrubber, allow providers to submit more complete and accurate claims.
3. Enhance denial management workflows
Claims denials have a major financial impact across the revenue cycle. However, healthcare organizations can leverage denial management workflows, equipped with automation and data analysis capabilities to optimize this critical area of revenue cycle management. Using work lists based on client specifications, such as denial category and dollar amount, tools like Denial Workflow Manager generate work lists that identify the root cause of denials and improve upstream processes to prevent future denials.
Additional solutions that incorporate AI and machine learning may also help improve claims management and prevent denials. For example, AI Advantage™ finds patterns in payer behavior and identifies undocumented rules that may lead to claims being denied. Staff are alerted so they can take swift action to avert issues. Algorithmic logic helps staff efficiently segment and rework denials — speeding up reimbursement times while minimizing downstream revenue loss.
4. Improve patient payment portals and financial transparency
When patients know the cost of care up front, they’re more likely to pay their bill. According to Experian Health data, 81% of patients say having an estimate helps them prepare to pay. As the cost of care continues to climb — with patients shouldering more financial responsibility — and price transparency regulations getting tighter, healthcare organizations can optimize collections by improving patient payment portals and financial transparency.
Implementing patient payment estimator tools allows providers to offer more accurate estimates, while protecting the organization with built-in audit protection for compliance. Offering clear billing communication and flexible payment options — like secure web portals, payment links, payment plans and access to charity care — help boost collection rates.
To further streamline the entire collections process, organizations can also turn to solutions like Collections Optimization Manager and complementary tools, like PatientDial and PatientText to send patients bill reminders and self-pay options via voice or text messages.
Revenue cycle optimization examples
Leveraging predictive analytics and AI in RCM
Adopting RCM solutions that leverage predictive analytics and artificial intelligence (AI) can help boost efficiencies across the revenue cycle — ultimately resulting in more accurate claims submissions and higher collections rates. When organizations rely on outdated systems, reimbursement delays are common and busy staff often get bogged down with time-consuming administrative tasks.
RCM tools that utilize predictive analytics can provide organizations with actionable insights to improve key systems, including patient access, claims processing and collections. Additionally, tools that incorporate AI and machine learning across the revenue cycle, like Patient Access Curator™ (PAC), create a closed-loop system that ensures clean data is submitted at registration, helping to correct inaccurate data in real-time and prevent denied claims.
Common challenges in revenue cycle management and how to overcome them
Healthcare organizations face numerous roadblocks that can disrupt the revenue cycle, from high denial rates to ever-evolving compliance hurdles. Here’s a closer look at six common roadblocks today’s RCM leaders need to keep tabs on and how to overcome them.
1. High denial rates and expensive manual reworks
Revenue cycles rely on timely and accurate claims processing. However, as claims denial rates continue to climb, healthcare organizations often struggle with delayed or unpaid claims. Reworks are time-consuming and costly — especially for organizations that are already facing staffing shortages and operating on thin margins.
| How to overcome it |
| Organizations can avoid the denial spiral by implementing solutions that capture accurate and complete patient data, like Experian Health’s Patient Access Curator. Tools that streamline a provider’s claims management processes through automation and AI also help organizations submit cleaner claims, reduce denial rates and avoid costly reworks. |
2. Staff training and change management
For many organizations, implementing revenue cycle management strategies often requires robust onboarding or intensive staff training. RCM systems can be complicated. Staff may also be too busy with other administrative and patient care responsibilities to set time aside. In some cases, the hurdle of staff training may seem too daunting for organizations to prioritize revenue cycle optimization immediately.
| How to overcome it |
| Healthcare organizations can overcome potential staff training and change management roadblocks by implementing turnkey revenue cycle management software that requires minimal onboarding. Working with an RCM partner like Experian Health can also help organizations tailor solutions to meet their revenue cycle needs and receive support during and after implementation. |
3. Regulatory compliance hurdles
Ongoing and new healthcare regulations that affect RCM can cause problematic roadblocks at every stage of the revenue cycle process. Healthcare requirements are rapidly evolving, leaving providers sometimes struggling to keep up. The implementation of the One Big Beautiful Bill Act, new price transparency regulations, privacy safeguards for patients under the Health Insurance Portability and Accountability Act (HIPAA) and payer compliance changes are just a few examples of the regulatory compliance hurdles that today’s healthcare organizations face.
| How to overcome it |
| Leveraging price transparency solutions can help hospitals meet regulatory mandates, improve the patient financial experience and keep revenue cycles on track. |
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The future of revenue cycle optimization
In today’s healthcare landscape, revenue cycle optimization isn’t a “nice to have” — it’s a “must have” for organizations that want to ensure a healthy revenue cycle and ongoing positive cash flow. From patient access to collections optimization, the future of revenue cycle optimization requires solutions that leverage automation, machine learning and AI to create efficiencies across the entire RCM process.
Organizations that remain stagnant and rely on outdated systems and manual processes risk revenue leaks that can shake the entire organization’s financial stability. Failing to adopt a technology-forward, integrated, data-driven approach — at every stage of the revenue cycle — can also result in delivering negative patient experiences and poor interoperability with payer systems.
Start optimizing your revenue cycle with Experian Health
Experian Health offers an award-winning suite of data-driven, technology-forward solutions designed to help healthcare organizations optimize every stage of the revenue cycle. Learn how Experian Health’s Revenue Cycle Management Software optimizes patient access, collections, claims management and payer contract management and delivers proven results.
