Understanding Small Health Care Revenue Cycle Management

By: Rahul Kumar on February 21, 2019
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As a small and independent medical practice, you help save many lives. But while doing this, you must secure your practice’s financial health by implementing efficient internal processes. This is where health care revenue cycle management comes into the picture.

Revenue cycle management is a financial process that involves managing practice funds as well as collecting payments from patients and their insurance providers for the services provided.

Small practices that fail to handle their revenues could find themselves struggling to remain viable, while your competition grows their margins. Without an efficient financial management process, it will become difficult to run the practice.

That’s why small medical practices should adopt the strategy of health care revenue cycle management to ensure regular revenue and cashflow. This will allow them to focus on providing quality care to their patients.

In this article, we’ll explore the components of health care revenue cycle management, the common challenges that medical practices face and how technology drives revenue cycle management.

What Is Small Health Care Revenue Cycle Management?

Health care revenue cycle management is a process that includes identifying, managing and collecting revenue from patients. Medical practices use this strategy to manage their clinical and administrative functions such as insurance claims management, revenue generation and payment processing.

It’s important to note that the term “revenue cycle management” doesn’t refer to a specific type of software. In fact, it’s a multi-step process in which you can use different software to manage a patient’s financial life cycle.

Health care revenue cycle management starts right when a patient makes an appointment to receive medical treatment. It ends when the practice collects all payments from the patient.

Here’s a breakdown of the steps in this process life cycle:

Steps of the revenue process life cycle graphic

The objective of this process is to help medical practices receive the whole payment as soon as possible for the services they offer. However, the revenue life cycle of a patient’s account isn’t as easy as it seems. Let’s look at some of the challenges for small medical practices next.

Challenges in Small Health Care Revenue Cycle Management

Due to the dynamic and continuously evolving nature of revenue cycle management, small medical practices often face challenges such as failure to implement specific processes and billing errors.

Here are the most common pain points in the revenue cycle and key takeaways for small practices to avoid financial trouble.

Errors in billing and collections

Inaccurate billing could deprive your small practice of thousands of dollars. It could even burden patients with heavy debts, which they may be unlikely to pay.

Therefore, you have to ensure that there’s no uncollected revenue. At the same time, you shouldn’t be charging a huge amount, which could result in your patients switching over to a new practice.

Though a significant part of the payments come from insurance companies, patients usually owe a co-payment (co-pay) at the time of the clinic visit. You must collect this amount from them before they leave the clinic.

Key takeaway

Upfront collections lower the chances of patients’ accounts turning into bad debts or late payments. It’s easier to collect co-pays from patients when they are physically present in the clinic rather than weeks later, after you’ve received the insurance amount.

Denial of claims by insurance companies

If small practices don’t closely watch the claims process, they won’t be able to find the errors that resulted in denial of claims by insurance companies. That’s why the eligibility check process must start right when patients schedule their appointments.

Key takeaway

Ask patients for their complete insurance information so that you can verify their insurance eligibility and coverage plan even before they come to the clinic. This way you can let them know whether they will be covered by their insurance or not before their visit.

Lack of staff training

When your staff isn’t trained on the patient billing process, they won’t be able to accurately capture patient data, which will lead to inaccurate bills. A well-trained medical staff will reduce the chances of billing errors and make the whole process much more efficient.

Key takeaway

Staff training would also save your practice money in the long run. Too many billing errors usually result in patients accusing you of fraud, which will cost you more as you’ll be sued, fined, investigated or all of three. It will also prompt your patients to switch to other practices.

Now that you’re aware of the challenges small practices face during the revenue cycle process, let’s discuss how technology can help you.

How Technology Drives Health Care Revenue Cycle Management

Small health care providers are relying on technology to enhance their revenue cycle management components and, eventually, improve their profitability. Health IT and electronic medical record (EMR) systems help you streamline your health care revenue cycle management strategies to ensure accurate billing.

Many small practices use technology to track claims, collect payments and manage claim denials. These technologies facilitate a steady source of revenue.

For instance, EMR systems include patient scheduling and appointment reminder tools, which help you in the first step of inviting patients to your small practice. Use a patient intake tool to have them fill out intake forms and complete the pre-registration paperwork, which usually covers insurance and payment information.

In the next step, medical billing software can help you verify patients’ insurance coverage and correctly code claims. Then, practice analytics software can quickly collect and analyze all the patient data to track and calculate the overall profitability of your small practice at any given point of time.

Here’s an example about how New York’s Stony Brook Southampton Hospital managed to effectively use technology to enhance its revenue cycle process.

Case study: An in-depth analysis

The hospital roped in Craneware, a health care technology provider in the U.S., to reorganize their revenue cycle management process and improve reimbursements.


The Southampton Hospital was facing issues related to patient access and overall eligibility denials.


Craneware consultants analyzed the hospital’s revenue cycle and performed a full assessment, starting from patient access to the collection of claims. They identified the following problems:

  1. Patient eligibility wasn’t being verified across the three departments—inpatient, radiology and emergency. The hospital had a decentralized registration, with staff from each of the three departments registering patients.

  2. The hospital wasn’t collecting any co-pays, while the staff in radiology were collecting only limited co-pays. Also, there was no real push among the staff to collect co-pays.

  3. The hospital wasn’t tracking its overall denials. It also didn’t have information regarding patients’ eligibility denials.


Craneware formed a revenue cycle management team that met with the three departments every other week.

  1. The Craneware team started by removing silos in the hospital’s different departments to improve cross communication.

  2. Staff members of all three departments were given formalized training to ensure that they follow a uniform patient registration procedure.

  3. The company deployed a registration eligibility tool to measure and verify a patient’s insurance eligibility and payment capacity. This aimed to improve patient registrations, enhance co-pays and lower cases of denials.


Here are some of the major results that Stony Brook achieved.

  1. Silos across the three departments were cut down significantly and cross communication improved as well.

  2. Eligibility denials improved by 25 percent.

  3. Point of service collections improved by 75 percent.

  4. There was a significant improvement in staff morale.

Conclusion and Next Steps

As we saw in the case study above, an effective revenue cycle management process is highly beneficial for small medical practices. They can use different technologies at different steps of the revenue cycle to increase operational efficiency and maintain their financial health.

So, what should you do now? Here’s where you can start:

  • Instruct your staff on strictly checking and verifying patients’ insurance information (eligibility and coverage) when patients make an appointment.

  • Keep track of your patients’ co-pays and ensure that they pay you when they visit the clinic.

  • Provide regular training to your staff on the billing and coding processes.

For any questions related to different medical software for revenue cycle management, call us at (844) 686-5616 for a free consultation with a medical software advisor.