Shortening the Revenue Cycle


Get more money in the door faster with cleaner claims

By Gretchen Heber

The phrase “no margin, no mission” often is used in health care to describe hospitals’ need for reliable, sustained cash flow in order to meet their patient care duties and obligations.

However, delayed reimbursements from payers for services already provided can imperil a hospital’s ability to fulfill its vital mission. Acquisition of an important piece of equipment could be deferred; hiring critical personnel might be postponed; services may no longer be offered. But getting claims processed and payments deposited can be challenging. What options does a hospital have for carefully and easily managing revenue cycles in a way that makes the most financial sense? Experts agree there are three crucial steps to improving the revenue cycle:

  1. Document every service provided.
  2. Code claims correctly.
  3. Focus on collection.


Hospitals may be leaving money on the table if providers fail to appropriately document all services provided. In the focus on patient care and in the harried atmosphere of a busy hospital, it’s easy for providers to occasionally overlook proper documentation of services. Services provided on weekends or after hours are particularly likely to be forgotten.

Hospitals must emphasize to providers the importance of careful attention to detail and consistency, and providers must have access to tools that make documenting even the smallest service easy and efficient.


One of the biggest stumbling blocks to shorter revenue cycles is incorrectly completed claims. Third-party payers reject incorrectly coded claims, sending them back to the provider who must then correct and resubmit.

Payers process well-coded, clean claims much more quickly, shortening hospitals’ revenue cycles significantly.

To the best of an organization’s ability, it should have clear and easy-to-use reference material available for coders. With ICD-10 in place for only a couple of years, many organizations are still learning this relatively new code set. In addition, it seems insurance company protocols change almost daily. Bulletins detailing changes are released frequently, and it can be a challenge to keep up with rule changes.

Smaller hospitals, in particular, may struggle to keep up with changes. Some rely on well-thumbed, thick-as-a-tissuebox code books. Others use antiquated computer systems.

And whether claims submission personnel refer to online or hard-copy documentation, any experienced hospital billing expert will attest that there are numerous undocumented requirements. Tidbits you “just have to know” through years of having done the work

This doesn’t bode well for new employees or fill-in help. One employee out sick for a week can wreak havoc on the claims process.


The third piece of the puzzle is collecting payments, from both patients and third-party payers.

For large, out-of-pocket expenses, some hospitals rely on outside financing services, which gives hospitals immediate reimbursement and removes the burden of collections.

Another option is collecting payment for services up front, before services are rendered.

For post-service collections, hospitals may try to shorten the balance-collection time. If a hospital’s policy is to send three statements post-service, it could condense the timeframe during which they are sent — every two weeks, for example, instead of once a month.

Allocating the Right Resources

For small hospitals, even just thinking about how to implement these solutions might be overwhelming. The first thing to do is to eliminate paper-based guidance. Hospitals need to digitize.

Some electronic systems require costly software installed on expensive computer equipment housed in a perfectly temperature-controlled server room and a team of on-staff IT experts to manage it all. However, a complex setup such as this may not fit into every hospital’s budget.

Some small hospitals in Texas have found relief working with companies such as athenahealth that offer cloud-based solutions to improve medical billing and other administrative tasks. athenahealth works to meet the unique needs and challenges of small (50 beds or fewer) hospitals for whom a complex in-house server-based network is extremely unlikely.


When new owners acquired Houston’s Advanced Diagnostics Hospital & Clinics a couple of years ago, the incoming team found the existing health records system improperly installed and cumbersome to use.

After an exhaustive search, Rob Turner, CEO of Advanced Diagnostics Hospital & Clinics, said athenaCollector was an easy choice. “We saw it was intuitive, easy to use and highly customizable,” he said. “We now have integrated billing and revenue cycle management. And the physicians like it. If you can’t get the physicians to adopt it, it doesn’t work.”

athenaCollector — designed to simplify hospital claims management — offers the advantage of being completely web-based, meaning client hospitals don’t need to invest in expensive capital equipment or personnel to maintain it.

“athenahealth brings simple cloud-based technology that looks and feels like the websites we use in our consumer lives,” said Ryan Wise, vice president of product management for athenaCollector at athenahealth.

Hospital staff enter claims into the athenaCollector system, which comes with a fully integrated electronic health record. athenaCollector then carefully checks the claims against an extensive database of always-current codes and other necessary claims data. If the system finds errors, it either fixes them or flags the claim for the hospital to clarify.


Addressing errors on the front end, before them goes to the payer, is an enormous time saver, said Wise. “We make sure errors are flagged instantaneously, as soon as the information is entered,” he added. “Many legacy systems wait to flag an error like that until after the claim has been submitted.”

For hospitals with limited resources, athenaCollector offers the capabilities of a much larger organization. athenahealth’s large staff of well-trained researchers stay current on insurer changes and continuously update the platform’s billing rules so that claims can be processed quickly, using the most recently available information.

“athena does so much on the front end so that the claims are very clean,” saidTurner.

athenahealth also says that its clients “achieved an average of more than 106 percent of cash flow above baseline and cut days in accounts receivable by 16 percent.”

As its fee, athenahealth charges a percentage of a hospital’s collections. No up-front capital or software costs are associated with the athenaCollector service.

Following the experts’ advice on shortening the revenue cycle can be daunting, particularly for small, resource-strapped hospitals. But solutions such as athenaCollector can help.


“We now have integrated billing and revenue cycle management. And the physicians like it. If you can’t get the physicians to adopt it, it doesn’t work.” - Rob Turner, Advanced Diagnostics Hospital