Healthcare Revenue Cycle Management is a strategic process that skilled nursing facilities employ to manage the healthcare organizations’ administrative and clinical components associated with claims processing, payment, and revenue generation for their healthcare practices.

At its core, Revenue Cycle Management focuses on unifying healthcare’s business and clinical aspects, combining administrative data, such as patient information and insurance details, with the patient’s care. The ultimate goal is to efficiently and accurately process claims collecting payments, ensuring proper and timely reimbursement for the resident care and medical services rendered. RCM is a common practice in most healthcare facilities. However, it’s relatively new to most long-term care operators.

Understanding the Importance of Revenue Cycle Management in Healthcare

Healthcare Revenue Cycle Management plays a pivotal role in the financial health of healthcare providers. It extends far beyond billing and coding; it encompasses a series of critical steps that begin as soon as a patient is admitted into the nursing home, steps that include health insurance companies, Medicare, Medicaid and/or private pay pre-authorization, care plan development, claim submission, and payment collections.

The significance of Revenue Cycle Management lies not only in its impact on the nursing home’s financial stability but also in its direct benefits to patients. By streamlining administrative and clinical functions, RCM enables providers to allocate more time and resources to deliver high-quality care to their patients.

proper revenue cycle management processes

The Steps in the Healthcare Revenue Cycle Management

To comprehend the importance of Revenue Cycle Management in your financial process, it is essential to understand the fundamental Revenue Cycle Management steps that every successful healthcare provider should adhere to. Each step in this process is critical, as any error or inefficiency can lead to delayed reimbursements and financial challenges.

Pre-Authorization and Eligibility Verification

The revenue cycle initiates when a resident is admitted to the nursing home, necessitating accurate pre-authorization and eligibility verification. Gathering comprehensive information, such as insurance, Medicare/Medicaid and/or private pay coverage, ensures that the billing process starts on a solid foundation. Errors or inaccuracies during this stage of medical billing can result in claim denials, postponing the nursing home’s reimbursement, reduced cash position, and necessitating additional administrative efforts. Denial management is costly and requires extra staff time.

Charge Capturing and Coding

Accurate charge capturing and proper medical coding is paramount for effective Revenue Cycle Management. Proper coding is essential to ensure that payors reimburse providers for the services rendered. Errors in coding can lead to claim denials and subsequent delays in payment.

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Claims Submission

The claims submission process begins once the resident is admitted to your skilled nursing facility and has been appropriately coded. Timely and efficiently submitting claims to payors is crucial for a smooth revenue cycle. Any delays in submitting claims can also impact the nursing home’s cash flow.

Payment Collections

Providers must receive the appropriate reimbursement for their services promptly. Revenue Cycle Management aims to expedite billing processes, reducing the time between providing a service and receiving payment. Additionally, transparent communication with the resident’s family/guardian about their financial responsibilities and requesting their collections support (for those families primarily paying by insurance reimbursement or private pay) fosters a positive experience. Nursing home operators nationwide continuously suggest collecting payments is more accessible with good communication and family support.

Care Plan Updates

Nursing home clinical leadership constantly updates the resident’s care plan, ensuring the best treatment is in place. The Revenue Cycle Management team should be informed of the care plan process. Updates in the care plans may lead to new treatments that improve the nursing home’s revenues.

insurance company patient payments

The Advantages of Healthcare Revenue Cycle Management

While the primary objective of Revenue Cycle Management (RCM) is to enhance provider revenue by ensuring timely and accurate steps, it brings forth a host of additional benefits. These advantages serve the nursing home and extend to resident care.

Identifying and Resolving Billing Errors

One of the primary benefits of implementing Revenue Cycle Management is the ability to identify and quickly rectify billing errors. Approximately 90% of claim denials result from easily preventable technical issues, such as missing patient chart information or incorrect coding. By implementing robust RCM practices, providers can significantly reduce the number of denied claims and expedite their reimbursements. This, in turn, saves the providers valuable time and resources that would otherwise be spent on investigating and appealing denied claims.

Decreasing Administrative Burden

Preventing claim denials contributes to financial gains and reduces the administrative burden on your Business Office Managers. When administrative tasks are streamlined and errors are minimized, clinical staff can focus more on delivering quality patient care rather than performing audits and chart reviews.

Increasing Long-Term Care Facility Revenue

Perhaps the most significant advantage of Revenue Cycle Management is its direct impact on the financial well-being of the long-term care facility. By mitigating technical errors, claim denials, and billing investigations, providers can promptly receive reimbursements for their services. Avoiding the costs associated with resolving errors, appealing claims, and billing investigations ultimately translates to additional revenue for the facility. With increased financial resources, providers can invest in enhancing resident care and upgrading medical technologies such as those provided by SNF Metrics.

health systems patient schedules

Embracing Value-Based Care

As the healthcare landscape shifts to new care models, RCM is crucial in facilitating this transition. By leveraging data analytics and reporting tools such as SNF Metrics, nursing homes can measure and optimize clinical care outcomes, the quality of care, and accurate healthcare costs. RCM empowers long-term care organizations to report on various quality measures, resident and family satisfaction, and overall care coordination, ensuring they receive the maximum reimbursements.

Strengthening Financial Stability

A solid financial foundation is essential for the long-term sustainability of any healthcare organization. Revenue Cycle Management equips SNF operators with the tools to proactively address financial challenges, monitor revenue streams, and identify potential areas for improvement. By minimizing claim denials, avoiding unnecessary costs, and optimizing revenue collection, RCM strengthens the financial stability of healthcare organizations, allowing them to weather economic uncertainties and invest in future growth.

Adapting to Regulatory Changes

In this ever-changing healthcare regulations space, it can be challenging for providers to stay compliant. In today’s landscape, the federal and many state governments are increasing required staffing levels. Getting reimbursed for the delivered services is more critical than ever before. Implementing a successful RCM process helps operators collect faster, reducing their reliance on short-term loans and associated interest charges to pay staff. RCM also plays a vital role in today’s PDPM (Patient Driven Payment Model) environment.

Leveraging Technology for RCM Advancements

Advancements in health systems and information technology are pivotal in enhancing Revenue Cycle Management. Long-term care operators can now leverage RCM systems that integrate with electronic health record (EHR) platforms, financial systems, and even time and attendance platforms. The value of these business intelligence platforms does not have multiple systems to review simultaneously. Data is quickly viewed and action taken. Data analytics from a single platform enables SNF operators to gain valuable insights into their revenue cycle, predict claim outcomes, and optimize performance.


A fully-operational Revenue Cycle Management strategy ensures financial success for the nursing home operator in today’s landscape and tomorrow’s value-based care. By unifying administrative and clinical functions, providers can ensure efficient claims processing, timely reimbursements of resident payments, and improved resident service delivery. RCM not only maximizes operational efficiency and financial stability but also empowers healthcare organizations to thrive in an ever-changing healthcare landscape.

The Value of Business Intelligence Platforms

Business intelligence platforms exist that integrate an SNF operator’s data from their various data sources, providing live insights and saving staff valuable time. These platforms also play a vital role in improving the nursing home operator’s success with new value-based care reimbursement models that hospitals and health systems administer. Robust RCM systems that integrate the latest technologies will have the best success in these ever-growing business models.

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Stay Ahead Of Regulatory Changes

Finally, be it a change in patient care or reimbursement, RCM is integral as operators navigate the ever-changing regulatory environment.