Dec 22, 2023 3 min read

What are the major RCM challenges faced by the practices?

Optimize revenue cycle management for your practice: Address common challenges like payment collection, pre-authorizations, compliance, and more.

Efficient revenue cycle management plays a crucial role in ensuring profitability and sustenance in a practice. The ability to effectively collect revenue and utilize it to improve the quality of care provided as well as the infrastructure of the practice is perhaps one of the most significant aspects of financial management in any practice.

In today’s digital age, the healthcare industry isn’t far behind when it comes to the use of technology and automation to manage its revenue cycle. This change has proven to be quite effective for the practices in managing their revenue cycle. However, despite these advancements, we are often able to find insufficiencies in some of the RCM processes. These insufficiencies need to be identified and properly addressed and the most feasible solutions need to be provided in order to ensure an effective revenue cycle management process in place.

Here are the most common RCM challenges that practices face on a frequent basis:

  1. Timely collection of payments: This is one of the most common challenges faced by the practice. It is never easy to collect timely payments after providing treatments to patients. In fact, it is commonly agreed by most healthcare professionals that the collection of payments is the biggest challenge faced by their practice. Revenue not coming into the practice on a regular basis could adversely affect the overall operations of the practice and ultimately its efficiency.

  2. Futile amount of time spent on revenue cycle management: Alongside treating patients and helping them lead healthier lives, optimization of the revenue cycle is also a crucial process for a practice to fulfill its mission. But oftentimes, the practice may lack the tools and resources that they may need in order to optimize and manage their revenue cycle in an effective manner. As a result, they end up spending an excessive amount of time and manpower on their revenue cycle instead of managing other more relevant areas of operations.

  3. Pre - Authorizations for Treatment: The insurance eligibility of patients is highly unpredictable. Hence pre-authorization prior to providing any kind of care or treatment becomes very much necessary. But as important as this process is, it is also highly time-consuming. What makes it even more difficult is the delays and errors, if any, which would just end up further delaying/causing an inconvenience in the treatment or care being provided to the patient.

  4. Reinforcing regulatory compliance: Regulatory compliance is one of the more critical challenges that practices may face; especially when they are outsourcing their RCM service. It is very crucial that the practice as well as the RCM service providers comply with the rules and regulations of the industry. A practice’s RCM should comply with the guidelines laid down by the Healthcare Information Portability and Accountability Act 1996. HIPAA violations are an extremely common challenge in the healthcare industry today. Failure to comply could end up costing a fortune for the practice.

  5. Issues with Interoperability: Data and information are key elements to the effective management of a practice’s revenue cycle. The lack of communication and information exchange between departments can lead to tremendous amounts of revenue loss for a practice. The practice has abundant amounts of data and other resources which if used in a meaningful manner can boost the practice’s revenue. But on the other hand, the inability to share and exchange these can increase the risk of problems.

  6. Proper medical coding: This is a very complex RCM challenge that practices face because as crucial as it is,  accurate coding is also an extremely difficult and confusing task. Practitioners dealing with these codes are required to stay up to date with the ever-changing codes and guidelines of the industry. Leakage of revenue is inevitable if these code changes are not duly monitored and adopted, and the application of the same is not reflected in practice.

  7. Lack of a deeper insight into RCM: Most healthcare providers find it extremely challenging to get the deeper insights they require to ensure the most optimal approach to their revenue cycle management. Lack of the right tools in place, it’s next to impossible possible to get complete visibility into the revenue cycle and measure KPIs.


It is quite evident that these challenges are preventing the practice from functioning at its full potential and achieving its goals. Hence these challenges need to be addressed and tackled in the most efficient manner. In order to overcome these challenges, the practice must make available the tools to fill any existing gaps and clear any insufficiencies. On the other hand, outsourcing RCM services is in itself a great tool that can help take a major load off your practice by minimizing any errors or inaccuracies to a great extent. This helps you direct your focus on the more important aspects of operations in your practice. Once outsourced, the financial stability of your practice will directly depend on the quality and capabilities of the RCM service provider you are associated with. Partnering with an RCM service provider can help improve the overall financial picture of your practice.

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