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RCM in Medical Billing: How Much Does It Cost You to Get Paid? 

Authored by: Tim Anderson

The revenue cycle begins the moment a patient schedules an appointment, but as those in the medical practice know, the amount you bill doesn’t equal the amount you end up with. Expenses associated with collecting revenue require time, resources, and energy — all of which can erode your bottom line.  


In a 2022 MGMA Stat study, roughly 40% of practices reported struggling to meet their revenue goals. When asked why, they cited high expenses and slow payer reimbursements as top reasons.  


The good news is that once you understand where some of the “leaks” are in your RCM medical billing, you can work to fix them and recapture lost revenue proactively.  

RCM in medical billing: The expensive road to getting paid  

As your practice works to get paid, you likely submit claims to a clearinghouse, which charges fees such as:  

  • Transaction fees. A charge per claim submission or transaction, which could vary based on your monthly claims volume.  
  • Monthly fees. A monthly fee charged by some clearinghouses to cover a specific volume of transactions.  
  • Rejection and correction fees. Charges incurred when claims are rejected and need to be corrected and resubmitted.  

When submitting claims, you might handle the process internally or work with a partner who handles it on your behalf. The partnership approach can be a smart one if you select a vendor that manages expenses more closely — or even closer — than you might internally.  


However, whether you’re submitting claims directly or through an external partner, you’re still paying fees. So it’s wise to understand how many times you’re getting charged to collect on the same revenue.  

RCM in medical billing: Auditing your process  

Does your team handle claim submissions internally? If so, consider auditing your existing process. You could focus on many areas as you audit, but I’d recommend starting with an easy win: paper versus electronic claims.  


It’s generally recognized that processing paper claims is three times more expensive than electronic processing. A few reasons why include:  

  • Slower processing times. When a claim is mailed, it takes longer to arrive at the payer and delays processing times.  
  • Higher risk for manual errors and data entry issues. Electronic claims often use unique elements of automation, helping to reduce the risk of errors.  
  • Greater difficulty in tracking and managing claims. Electronic submission gives you greater visibility into the status of a claim.  
  • Delayed reimbursement for your practice. Longer processing times and greater risk for errors may slow payment cycles.  

As you audit your processes, find out how many of your claims are still processed via paper. Likely, you aren’t hitting all of your electronic claims opportunities within your medical billing revenue cycle management 


For example, perhaps you’ve addressed electronic claims processing only for the major payers, but the smaller payers still dump out onto paper. Capturing these lost opportunities can help you speed up revenue collections and mitigate error-related claims rejections.   

RCM in medical billing to optimize revenue  

The key to solving most problems is knowledge. After all, it’s hard to solve a problem without the information required to understand it. In the context of the revenue cycle, this means pinpointing exactly what’s increasing your expenses around collecting revenue.  


Optimizing expenses will likely prove even more important in the future because real-time adjunction is just around the corner. Once that’s a reality, practices could see their revenue cycles rapidly speed up.  


Fully capitalizing on this opportunity, however, requires a dialed-in claims process to ensure you’re collecting more of every dollar you earn.  

Do you need help solving your RCM cycle in medical billing challenges? Let us know we can help! 

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