Revenue cycle management (RCM) is a process used in the healthcare industry to track patient revenue from the scheduling of an appointment to the final payment of all balances. It helps healthcare companies manage the complexities of merging their financial and clinical responsibilities by providing a uniform platform where they can get paid for the care they provide. In short, it ensures that healthcare organizations remain financially healthy and continue to provide valuable services to their patients.
Most healthcare organizations function on a delayed payment cycle where they realize revenue after the delivery of their clinical services. As a result, errors in billing are common. RCM is used throughout the patient care process to avoid errors resulting in a claim denial. RCM allows employees to gather relevant patient data, such as insurance eligibility and previous interactions. Moreover, it facilitates the process of a healthcare provider identifying the optimal treatment using the appropriate medical code. It helps the organization identify common issues in claim denials by running internal analytics and reaching out to insurance companies. Overall, RCM aims to reduce operational costs, increase patient revenue, and provide an improved patient-provider experience.
Broadly speaking, the healthcare industry pursues two different business models. Fee-for-service, the traditional model, has providers charge for specific procedures and appointments independent of outcome. Value-based care, on the other hand, aligns quality of care and cost efficiency with revenue by paying providers for their ability to provide better outcomes at lower cost.
Revenue cycle management software platforms interact with clients slightly differently based on which model they pursue. In the fee-for-service model, RCM firms support organizations by documenting all patient interactions, submit claims, and track cases until final payment. In the value-based-care model, RCM companies optimized on value, not just volume.
The global healthcare revenue cycle management outsourcing market is expected to grow at 11.9% CAGR to 23 billion by 2023.
In 2016, revenue cycle management M&A consisted of 93 transactions worth nearly $15.7 billion. More recently, in July 2019, Bain Capital sold Waystar to EQT and CPPIB for $2.7B, making it one of the largest deals of the year.
To find RCM companies, we used Grata Search to identify 112 companies. These RCM companies are most closely linked to practice management, patient care, EHR, medical billing, and patient engagement.