Mastering the Revenue Cycle: Navigating a Four-Stage Journey to Transformation and Maturity

A revenue cycle management (RCM) maturity framework can serve as a valuable assessment and diagnostic tool for healthcare organizations. Hospitals and health systems can use it as a roadmap to assess their current level of revenue cycle maturity compared to the broader industry, learn from high-performing organizations that have achieved advanced maturity, and identify the steps needed to accelerate their own maturation process. By benchmarking the current state and setting achievable goals as part of a “crawl, walk, run” methodology, organizations can chart a strategic direction to achieve greater maturity and optimize revenue cycle performance and transformation.

The AGS Health revenue cycle maturity framework evaluates organizations across three key pillars or layers: service delivery, technology and interoperability, and analytics. These pillars encompass various aspects of RCM and provide a comprehensive view of an organization's maturity level. The framework categorizes organizations into four stages: emerging, foundational, advanced, and high performing. Each stage represents a different level of sophistication in staffing models, centralization, and outsourcing strategies. By understanding these stages, organizations can identify their current position, assess areas for improvement, and enhance their capabilities.

In the first of a four-part series, we explore how healthcare organizations can leverage the framework within the service delivery pillar to drive revenue cycle transformation and achieve greater maturity.

Assessment framework - service delivery layer

1. In the emerging stage, organizations may lack the infrastructure and systems required for high performance, especially if they have grown rapidly through mergers and acquisitions, resulting in disparate processes and delivery models. In this stage, organizations often rely heavily on in-house staffing, with fragmented and decentralized processes. They may be hindered by challenges such as limited operational optimization due to growth through mergers and acquisitions (M&A) or historical reliance on private pay reimbursement that is now covered by third-party payers. Offshoring or outsourcing beyond their local community might be perceived as a barrier. The lack of centralized operations and optimized delivery models can impede scalability and hinder the ability to address cost pressures effectively.
2. In the foundational stage, organizations begin to shift away from complete reliance on in-house staff, adopting a staff augmentation approach. While some processes may be centralized, particularly in billing and collections, other areas within the revenue cycle, such as care management and patient access, often remain decentralized. These organizations face challenges in scaling their operations for a variety of reasons which can include a lack of in-house infrastructure, struggles with a strategic vision, and capacity constraints. However, they may start outsourcing certain functions like low-balance accounts or specific denial types while still predominantly relying on in-house resources.
3. In the advanced stage, which represents most innovative health systems, organizations adopt a complementary service delivery model that combines in-house resources with strategic outsourced operations. This model allows for a more focused approach, with in-house staff handling higher-yield populations and less complex claims. Vendors are engaged to manage complex claims and low-balance accounts, filling the capacity gaps. Advanced providers also prioritize centralization, not only in back-end processes but also in functions like patient access scheduling, insurance verification , eligibility benefits, and authorization. This centralization offers benefits such as shared service models, cross-training opportunities, standardization of processes, and a heightened focus on the patient experience.
4. High-performing organizations exhibit a strategic vision for their delivery model through a configured and optimized system, enabling seamless operations and exceptional patient experiences. They establish global partnerships to maximize return on investment and often leverage vendors to improve ROI and service delivery. This scalable delivery model allows for rapid expansion and integration of new brands, clinics, and locations. High-performing providers achieve high degrees of centralization, including coding, patient financial services (PFS) departments, and self-pay operations for hospital and professional services. Patients benefit from a consistent experience through a unified statement.

By recognizing their current service delivery position within the framework, healthcare organizations can strategically align their staffing models, centralize processes, and leverage outsourcing opportunities with a practical approach to transform and enhance revenue cycle performance.

View our webinar “A Four-Stage Journey Toward RCM Transformation and Maturity ” and watch for the next article in our series that discusses navigating the technology and interoperability pillar on the maturity spectrum journey.