HME Business Handbook: RCM

How to Optimize Your Revenue Cycle Management

How should RCM work in the world of HME and how can providers use IT to optimize their entire revenue performance?

In this acronym-heavy HME industry, you might have come across yet another three-letter abbreviation, RCM. It stands for revenue cycle management, and it could change your business.

Several years ago, entities such as hospitals and health plans started defining and refining the practice known as revenue cycle management, and it helped them optimize their businesses’ incomes.

Don’t confuse RCM with billing. Billing is the process of filing claims with reimbursement sources such as Medicare or private payer plans and then following up with those funding sources to ensure the claims get reimbursed. RCM is broader than that. RCM does encompass billing and claims management, but it also optimizes how claims denial is handled, how patient co-pays are collected, and how much staff time is expended on claims. RCM tracks the revenues and costs related to a patient’s interaction with a healthcare provider from the beginning and end of the process. RCM is the umbrella under which all revenues are managed and maximized.

And now, RCM has come to the HME industry. In fact, in some ways, it has been here, thanks to the software systems and services that have proliferated in the HME industry. However, HME software makers have started working with providers in earnest to start defining how RCM should work in the HME industry to help providers overhaul their entire revenue performance — not just refine their billing.



In the same way that software revolutionized claims and operations management for HME businesses, those systems are now adding RCM tools. The goal is to help owners and operators monitor and manage their revenues in a more proactive fashion that is aligned with how the entire business operates.

However, because RCM is new to HME, there is a bit of an implementation curve. While large healthcare organizations might have developed RCM procedures that have become refined to the point that they are commonplace, much needs to be done in terms of outlining RCM workflows in the HME industry. So, there is a bit of a give-and-take between providers’ RCM learning curves and the software tools they are using.

Sound familiar? If you’ve been in the HME industry for a few years, it should. The migration toward RCM that is happening is very similar to the billing and business management software implementation that HME providers went through a decade or so ago; it’s another process and technology learning curve.

As RCM comes to HME, it will be tied into providers’ software systems, which is a good thing. Providers already know that they need to use software that can manage their businesses holistically, but still automate various workflows. Well, RCM is another interconnected workflow.

So, the more that providers can implement RCM solutions that automate the revenue cycle and align it with existing workflow, the more that they will create a system of “no touch” claims. In that scenario, most of the data entry takes place at the outset, when a patient and claim are entered into the system. If done right, for the majority of claims there will be no edits or revisions, the documentation will be solid, and the claim will be funded and any co-pays will be collected. This leaves most of the remaining hands-on work in the system to deal with the exceptions to this workflow — and good RCM tools will flag these exceptions for attention throughout the workflow.


Once a provider puts RCM tools into place, it must ensure it is staying on top of its technology. After the initial expense and implementation, it’s critical to make sure that an RCM system continues to pay off over time.

Every software company in the industry, including those making RCM tools, are working to ensure that their tools are keeping pace with changes in not just HME, not just post-acute, but healthcare as a whole. Given that software has grown to be an essential, strategic tool in the HME industry, why would any provider want to miss out on new ways to optimize their RCM?

Bearing that in mind, it is essential that an HME provider’s management select a team from its staff that will review and manage RCM software on a regular basis to see if new features, upgrades and tools are available to help them improve their RCM. Also, from reading release notes to installing updates, HME IT staff must work in tandem with that team to ensure that they are not missing out on critical upgrades that could help them increase automation; prevent bad claims from being sent to payers; and add pre-qualifying criteria to claims, for example.


In addition to implementing new software solutions, another option is to outsource parts of the RCM process to third parties. Various third-party companies serving the HME industry specialize in particular elements of billing and claims processing. For instance, one outsourcer, Allegiance Group, specializes in patient pay and another, Prochant, focuses on insurance.

Moreover, these RCM outsourcing companies often offer niches of service to help providers off-load as much or as little as they need. This way, a provider could outsource specific elements of its business that require labor that they don’t need to retain all the time. For instance, a provider could outsource cash posting, denial management, accounts receivable, data entry and even fax handling only when it needs that help. This frees up the provider’s full-time staff to focus on their core missions.

There’s another benefit to outsourcing elements of your RCM: the experience, institutional knowhow, and industry knowledge that these outsourcers collect. Because outsourcers are handling far more claims or collections than any single provider, they start to find efficiencies that most providers don’t, and they develop best practices that would take a provider much longer to discover and implement. An outsourcer might have a broader perspective and range of information and skills, since it isn’t focused on a particular niche. Essentially, they are picking up knowledge from across the spectrum of post-acute RCM and bringing it to their clients.

If anything, what will likely play out as providers work to refine their missions and execute on their core competencies, while still fine-tuning their RCM is a mixed approach: They will implement in-house efficiencies through technology and smart workflows where they can, while off-loading to outsourcers where it makes the most sense.



  • RCM started in large healthcare organizations, but has now come to HME providers.
  • RCM aims to align the revenue-related processes of a healthcare business with all the other workflows it might follow, such as the patient workflow.
  • The HME industry’s software vendors have been working to create RCM solutions that HME providers can integrate into their businesses.
  • In addition to software, there are outsourced RCM services that help providers off-load parts of their revenue cycle management so that staff can focus on their core missions and competencies.


One place to monitor RCM as it is implemented in the HME industry is to stay tuned to the Software Solutions Center on the HME Business website at Two other good resources are the Healthcare Business Management Association ( and the Healthcare Financial Management Association (, which both offer resources on RCM.

This article originally appeared in the June 2019 issue of HME Business.

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