Coding and Billing: Time to go Deeper

Unravel the intricacies of optimizing the healthcare revenue cycle to enhance profitability. Discover efficient strategies, benchmarks, and proactive approaches for sustainable financial success in healthcare organizations.

It is now time for physician practices to get revenue cycles in order to improve financial performance. The healthcare revenue process encompasses numerous critical steps, including scheduling, registration, case management, clinical charge processing, medical records, billing, payment posting, and revenue recovery. However, this intricate cycle is prone to errors that can significantly impact an organization’s profit margin.

While Revenue Cycle Management (RCM) differs slightly between Fee for Service Practices and Managed Care Contracted Practices, most organizations deal with a diverse payer mix, making it essential to discuss the traditional cycle universally.

From my experience, I have witnessed various instances where each step of the process was compromised, leading to revenue losses and compromised process quality. Issues such as incorrect patient information, mismatches between insurance cards and patient IDs, failure to check eligibility or interpret benefits, and neglecting copayment, coinsurance, and deductibles collection are prevalent challenges.

Analyzing every facet of the cycle and implementing efficient processes to reduce waste and enhance quality is crucial in maximizing revenue. Experts predict that the adoption of ICD-10 could result in an increase in denials by 100 – 200% and lead to a 20-40% growth in days in accounts receivable (A/R).

I firmly believe that healthcare organizations should adopt a proactive approach. Establishing benchmarks to monitor financial performance and implementing strategies for an optimal financial outcome is paramount.

Furthermore, we must identify and rectify operational inefficiencies, eliminating unnecessary work, and preventing revenue losses due to subpar documentation, such as inaccurate demographics, improper documentation and codification, and inadequate eligibility and benefits checks.

To ensure a smooth revenue cycle, establishing benchmarks becomes pivotal in tracking performance and striving for continuous improvement.

Graphic 1 Revenue Cycle Management 

Creative copy:

Inner circle: Revenue Cycle Management
Outer circle:

  • Clearing house denials 
  • Payment posting 
  • Denial management 
  • Secondary filing 
  • Accounts receivable 
  • Appeal procedure 
  • Patient billing 
  • [ARROW] Patient registration 
  • Eligibility and benefits check 
  • Data entry & patient demographics 
  • Referral & authorization 
  • Coding & billing 
  • Charge posting 
  • Claim submission 

Productivity: Coder and physician productivity and quality metrics are important indicators to watch in Fee for Service or Managed Care practices. E/M coding profile enhances a provider’s productivity with education. E/M coding profile by provider (FFS) (Graphic 2)

Graphic 2 Evaluation and Management coding profile by provider: 

Clinical Documentation: The number of physicians’ queries, query response time, and coder accuracy are indicators that will help to improve wasted time and unnecessary re-coding. Incomplete notes also tremendously impact the cycle.

Billing Operations: Organizations should watch denials and rejections count by category (e.g. Medical Necessity, LCD, Eligibility, Credentialing Issues, and Prior Authorizations). Pending claims, first-pass rates, number of pending claims, and third-party rejections should be measured and monitored.

A/R: A/R days by the payer and A/R days over 120 days are indicators that allow organizations to identify if claims are being paid in a timely manner.

Using benchmarks, we should be able to see where our revenue is today and how it will change in the future, avoiding disruptions in the cash flow and enhancing revenue. It will also improve the performance of providers and coders, increasing efficiency and lowering costs.

Valuable tips for success: 

Denials: Identify your most common denials and look for trends. Is documentation appropriate, compliant, and sufficient? Are codes accurate and complete? What patterns do we see emerging, and why? 

Improvement in coding staff: Some organizations include a coder in the scheduling department or maximize the training on the “scheduling and front desk staff,” so they can ensure that the correct and complete code is obtained during the pre-certification process. This can help combat medical necessity denials and ensure accuracy from the start of the registration process. 

Plan ahead for cash reserves: Consider the fact that denials or delays in the short term are bound to occur, but we do not know for how long. An organization needs to be able to cover its expenses for at least three months–and ideally six months–after the implementation of ICD-10, in the event that payments are delayed or come to a complete halt. 

Continuous education: facilitating continuous education for providers and coders will improve clinical documentation, accuracy, and compliance. 

Some example benchmarks to compare: 

A/RPrimary CareMultispecialty
31 to 60 days12.75 %13.84 %
61 to 90 days6.6 %7.17 %
91 to 120 days4.87 %5.46 %
121 + days21.64 %17.98 %
Adjusted days 58.48 %69.92 %
Gross days in AR35.81 %37.51 %


In conclusion, optimizing the healthcare revenue cycle is an indispensable aspect of ensuring financial stability and profitability for organizations. By meticulously addressing each step and implementing efficient processes, healthcare providers can reduce errors, minimize revenue losses, and elevate the overall quality of their services. Embracing a proactive approach and establishing benchmarks will prove instrumental in navigating the complexities of RCM and achieving sustainable financial success in the ever-evolving healthcare landscape.

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