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Therapist's Guide to the Billing Process (Stages of RCM)

Revenue Cycle Management (RCM) is the technical process that billing companies use to do their work. Understanding stages of RCM or the billing cycle is a helpful place to start when evaluating your systems and processes or deciding if you need to outsource your billing to a company. In this particular post, we will walk you through a general overview of the stages of RCM and some critical actions that need to be taken during each stage of the process. It is important to note that there are other examples of the stages of RCM (i.e. in the hospital system’s RCM, utilization review would be a critical step), but for our purposes, we will go through a basic version of RCM that can be used in your private practice.

Step 1: Pre-registration

Pre-registration is the term used to describe the process when a new client calls into your office. There are many components to consider when structuring your pre-registration processes. For example, what is the script that your office staff is going to use to greet potential clients or new clients? What information makes the most sense to gather at this point? How are they going to schedule the client with a therapist? How does your administrator know which client is a good fit for a specific therapist?

All of these questions need to be answered by the pre-registration workflow in your office. A good way to start thinking about this step in the process is to think about what the client experience will be when working with your team. From a billing perspective, you want to think about how each piece of information that is gathered helps you to submit clean claims and receive payment from the insurance company. Our blog post What You Need From Your Patient to Bill Insurance covers the basics that should be considered for pre-registration.

Step 2: Registration

Registration is the term used to describe the process when the client is physically present in your office. This step in the process answers questions like: what forms do they need to sign? Where do they fill out forms? How does that information become entered into your EHR system? Are you going to get a copy of the insurance card?

This step of the process is actually the most important step in the process. Not only are you making a first impression with your new clients and the community, but you are also gathering the necessary information in order to submit a clean claim.

If there was ever a time that you should slow down and make sure that you have the correct information and everything spelled out correctly, this would be that time. This is the part of the process where you need to be hyper-detailed because if you miss something in this step, you will likely have a very difficult time with reimbursement not only from the client but also from the insurance company.

You need to have a clearly defined workflow and make sure that this process operates with an extremely high level of accuracy and precision. It is not okay for this step of the process to have any wiggle room because this is the step in the process that determines how claim submission is handled.

In the registration phase you would send client information over to your biller for an eligibility check. This is also where things can start to go wrong if any patient information is recorded incorrectly. If you rush this part of the process and send faulty information to your biller, you will have to circle back to the client and obtain the correct information. This could take a long time and delay payment.

Make sure that you are sending the correct information to your biller in a timely manner.

Step 3: Charge Capture

This step in the process describes getting paid from your client. You should have done an eligibility check by now and you should have a good idea of what the client is going to pay or be paying in the future. Make sure that you collect the correct payment from the client at the time of service. If you don’t collect the correct payment at the time of service your chances of receiving payment from the client is slim to none. This step of the process is where you should start to see movement on your Profit and Loss statement in regard to your profitability. You should be able to see an increase in revenue and an increasing profit if you are able to capture payment from the client quickly.

Many therapists have a hard time with this step in the process. We get it! You are in the business of helping people that are having a difficult time, and requiring payment from those people can feel like hurting them.

It is important for a wide variety of reasons that you collect payment at this point in the process. First, it is often a contractual obligation with the insurance company. Second, it helps maintain your cash flow which you need to pay your bills. Finally, collecting payment up front makes sure that the client understands that they will need to have everything in order before they see you. You don’t work for free in this situation. If you need more tips on collecting from your patients, check out our blog post 10 Tips for Collecting From Patients in Private Practice.

Step 4: Claim Submission

This step in the process describes how a claim will be submitted to the insurance company.

I know what you are thinking, “Isn’t it as easy as pressing a button?”

The answer is actually, no, it is not as easy as pressing a button. The reason why claim submission is not as easy as pressing a button is because your client’s situation can change in a matter of days.

Your client could lose their coverage for a number of reasons, they could meet a deductible, they could change jobs, or any number of reasons why their insurance would change. There are a few best practices that you can implement to make sure that you are scrubbing (def: the process of making sure claims are clean) your claims before sending them.

Additionally, don’t assume that you or your staff executed the process perfectly. What if you or your clinician accidentally miscoded a claim and now you have to correct that down the road? What if the rate on the claim was the incorrect amount?

There are a lot of things that can go wrong with the insurance claim submission process, and making sure that you have a quality control procedure in place will ensure that you are paid in a timely manner and don’t have to fix mistakes later.

Step 5: Payment Posting

This step in the process describes recording payment from the insurance company. Remittance simply means the transfer of money from the insurance company to you. Insurance companies don’t send individual payments for each session that you complete, they send batch payments.

The documents that come with the payment of insurance claims is known as an explanation of benefits (i.e. EOB) or electronic remittance advice (ERA). Both of those terms represent the same thing. A piece of documentation that describes how the payment from the insurance company should be distributed based on client and date of service.

This is tedious work and should be done by someone with the time, technical knowledge, and passion to make sure that this process is done correctly. The reason why you should probably have someone look over this process is because each insurance company has their own “language”. Each insurance company has similar but different terms that they use to describe errors and denials and each EOB is formatted differently.

Additionally, each insurance company has a different appeal process or claim correction process that you will need to know and understand. Finally, you will need someone to stay on top of tracking and resolving claims and denials.

Step 6: Insurance Follow-Up

Insurance Follow-Up is the process that takes outstanding claims and finds resolution with those claims in collaboration with the insurance company. The process of Insurance Follow-Up is fairly straight forward, but there are some best practices that can be more nuanced. Insurance companies have to pay clean claims. If they don’t pay your claims, then there is an issue somewhere in the process.

The problem is that the claim process is not always so clear. Therefore, you need someone with a predetermined knowledge base and process that can help bring outstanding claims to resolution. It is important to make sure that all of your follow up actions are documented with call reference numbers and the names of the people that you speak to throughout the process.

This is also the point in the process when the majority of a clinician’s time is wasted on administrative work. It is not uncommon for a person to spend hours on the phone with the insurance company only to come up with unclarity.

It is this step in the process that an outsourced company starts to add tremendous value both in time saved and money recovered from the insurance company.

Step 7: Patient Collections

This stage of the process is hopefully not one that you have to think about in private practice. Patient collections is the process where the practice collects outstanding patient amounts that went uncollected. This is an unfortunate stage in the process because it is completely preventable. If you look back to step three in this blog you can see our thoughts on collecting Payment from your patient. It is doable to create a process that collects patient payment as quickly as possible.

Patient collections occurs when an individual does not pay their bill with the practice and the practice has to spend time chasing down the individual for payment, or in the worst case scenario, retains the services of a collections agency who will take further action to collect money from the client. Ideally, you won’t have to get to this stage in the process, but if you do there are good resources available to help with patient collections


In summary, the revenue cycle is long and detailed. Starting out in private practice you may need to spend your own time learning and developing systems and strategies that help you navigate the insurance system with ease. However, if you are in private practice and you are looking to accelerate the amount of time that you spend growing your practice, you can outsource the revenue cycle to a company. Practice Solutions is passionate and experienced in the revenue cycle. We can be a trusted partner in your growth so you can focus on patient care while we handle the administrative side of your practice. Contact us today to learn more!


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