Revenue cycle management (RCM) is the entire path from patient appointment to final payment.
Most practices focus on clinical work and ignore RCM. But RCM is where revenue either flows or stops. A broken RCM process means delayed payments, unpaid balances, and cash flow problems.
The RCM Cycle
Step 1: Appointment and verification. Patient books appointment. You verify insurance.
Step 2: Treatment planning. Dentist examines patient. You discuss treatment and cost.
Step 3: Treatment delivery. You provide the treatment.
Step 4: Claim submission. You submit insurance claim within 30 days.
Step 5: Insurance processing. Insurance reviews claim (3-30 days).
Step 6: Payment received or denial. Insurance pays or denies.
Step 7: Payment posting. You record payment in the accounting system.
Step 8: Patient billing. If patient owes, you bill them.
Step 9: Collections. You follow up on unpaid patient balances.
Step 10: Reconciliation. You verify all payments were received and posted correctly.
Where RCM Breaks Down
Verification incomplete: You do not verify eligibility. Claim is denied.
Pre-auth missing: Claim is denied. You resubmit 30 days later.
Claim coding errors: Claim is denied. You re-code and resubmit.
Late submission: You submit claim 60 days after treatment. Insurance denies due to timely filing.
Payment not posted: Insurance pays. But payment is not posted to the account. You think the balance is unpaid.
Patient balance not collected: Copay or coinsurance is not collected. Patient never pays.
Collections abandoned: Overdue patient balance is never pursued. It becomes a write-off.
Days Sales Outstanding (DSO)
DSO measures how long it takes, on average, to collect payment after treatment.
DSO = (Accounts Receivable / Daily Revenue)
Best practices: 20-30 days DSO. You collect payment within 3-4 weeks.
Poor practices: 50-60+ days DSO. You wait 2+ months to collect.
$100,000 monthly revenue with 45-day DSO means you have $150,000 in outstanding receivables waiting to be collected.
How Reach Improves RCM
Reach remote team members trained in RCM:
- Verify eligibility and insurance (prevent denials)
- Obtain pre-auth (prevent denials)
- Submit claims immediately after treatment
- Post payments when received
- Collect patient responsibility
- Follow up on unpaid patient balances
- Work denials and appeals
- Track and report on collection metrics
A dedicated RCM team member can reduce DSO by 10-20 days, which for a $100k monthly practice means $30,000-60,000 in improved cash flow.
Performance Metrics
Revenue generated: Total treatment revenue
Claims submitted: Number of claims sent to insurance
Claims paid: Number of claims insurance approved and paid
Patient collections: Amount collected from patients
Accounts receivable: Outstanding balance waiting to be collected
DSO: Days to collect payment
Performance Tracker shows all of these in real time.
FAQ
**Q: How do I improve my DSO?**
A: Verify eligibility, get pre-auth, submit claims on time, post payments immediately, collect patient responsibility, follow up on overdue balances.
**Q: Should I use a billing company?**
A: If your RCM is broken, maybe. But Reach team members can do RCM for much less cost ($1,995/month vs. 5-8% of revenue for outsourced billing).
**Q: How often should I review RCM metrics?**
A: Weekly. Track claims submitted, claims paid, patient collections, and DSO weekly.
**Q: What is a good accounts receivable balance?**
A: For a $100k monthly practice, AR should be $50-75k (1.5-2.25x monthly revenue). Anything higher means collections are slow.
**Q: Can AI help RCM?**
A: Yes. AI tracks denials, alerts when claims are overdue, predicts which patients will not pay, and suggests collection strategies.