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Why Health Care Systems Should Adopt a Clinically Driven Revenue Cycle

Published on 2/11/2019

Estimated read time: 8 minutes

Revenue cycle has always been clinically driven. Without clinical care, we would not have claims to bill.  Depending on clinical documentation to create and complete a compliant claim has three key advantages:

  1. Increased likelihood that clean claims are submitted the first time

  2. Back office exception-based workflows vs. touching every claim

  3. Claims that consistently match the medical record

All of this is designed to lead to a faster, more accurate and increased reimbursement and reduction in financial loss from time-intensive payer third-party audits in the world of value-based payment models. 

A transformation, not an implementation

Embracing that a Clinically Driven Revenue Cycle is a transformation and not an IT implementation can be the crucial difference in an organization’s level of success. Transforming how the business operates is hard, and it doesn’t happen overnight. People, process and technology play equal roles and all are essential to success.


Organizations must ensure their staff has the resources needed to do their jobs. They need to understand the importance of adoption and advancing their knowledge to ensure they know what to do and why they are doing it. Leadership must provide structure to hold employees accountable and acknowledge when they go above and beyond.


When changing current processes or building new ones, taking the “right work, right person, right time” approach is essential to an organization’s transformation to a Clinically Driven Revenue Cycle.


Intentionally putting systems in place that support the vision and goals of the organization is necessary to deliver on why an organization decides to shift to a Clinically Driven Revenue Cycle.

Advancing the concept

The Healthcare Financial Management Association has taken the concept of people, process and technology a step further and added a focus on culture, metrics and communication.


This is not an IT project. It is a transformation of the way an organization runs its business. Teams need to feel empowered to make decisions now and, in the future, instead of just continuing with the way things have always been done.


Long-term operational metrics are critical to financial viability and other key functions. In addition to the standard key performance indicators, organizations must consider which metrics might impact their transformation to a Clinically Driven Revenue Cycle:

  • Reduced loss and eventually reduced interest from third party auditors?
  • Improved clean claim rate?
  • Increase in revenue capture and decrease in revenue leakage?
  • Shifting away from measuring appeal success to measuring reduction of initial denials?


Understand the difference between governance and communication. Have a systemic plan and understand:

  • Who needs the information?
  • How do they best receive information?
  • What information needs to be disseminated and to whom?
  • Who is accountable for communicating and meeting the objectives?

Communication is critical for operational success regardless of where the team is in the journey of transformation. This can include data and reports, policy and process changes and metrics.

Shifting work upstream

At the center of it all, is patient care. Near real-time documentation allows for more exposure of information to clinicians and others that need it – when they need it.  

As an example, automating patient status throughout the organization, in near real-time based on the physician’s order, moves clinical documentation improvement and case management level of service reviews up in the timeline of the patient encounter, allowing for more time to “get it right” and drive attention to the areas of documentation that need it most.

A Clinically Driven Revenue Cycle also provides an opportunity for consistency; reducing the “needle in a haystack” audits or time-consuming reviews of patient visits that are unnecessary and cause claim delays.

As an example, patient status orders allow for consistency in observation charging. By using the physician order for observation and documentation to identify observation carve-outs, health care organizations can gain consistent charging for Medicare rules, avoiding the potential of double billing time. A charge auditor that does not have to calculate and manipulate charges manually can spend more time supporting clinicians, IT and other stakeholders with improvements to reduce rework. Automating charges as a byproduct of delivering patient care supports a standard, consistent approach to capturing revenue.  

We often get asked if a health care organization can achieve the basic benefits of a Clinically Driven Revenue Cycle with an interface or partial automated charge adoption. It can, but the potential benefits it would see would be outweighed by the potential it would have for a claim not matching the medical record. As soon as an organization introduces an interface (even if it is near real-time) or human intervention, it introduces the potential for people, process or technology dysfunction in a system that is dependent upon accurate upstream behaviors.

Capturing the change

In a Clinically Driven Revenue Cycle, organizations can depend on automation to translate clinical documentation into billable charges with unique requirements for both compliance and financial reporting. Near real-time transaction management can lead to accurate revenue reporting and accountability of the budget owner to ensure they are appropriately tracking the volume of care being provided. Nobody knows the volume of work their staff is providing and what it takes to cover that work better than the clinical leader.

With near real-time access to charges and total revenue, the clinical leader is empowered to represent their departments and can more easily identify growth areas and needs within their department. This is one of the most valuable and significant culture shifts in an organization. Clinical department leaders may not have been directly connected to or interested in the charges that are associated with the care they are providing. With Clinically Driven Revenue Cycles, nurses, therapists, technicians and others are responsible and accountable for their charges being captured consistently and accurately. The intent is not to add work but add value to the work being done.

At the end of the day, each stakeholder should consider why they are invested in the organization’s transformation to a Clinically Driven Revenue Cycle and what their role is in the process. Without a belief that there is something in it for each stakeholder, and more importantly the patient, the commitment the health care organization receives will lack the energy needed to meet the challenge.

Orders to scheduling

Orders to scheduling require a physician champion in the physician office and within other ambulatory venues if an organization is going to be successful in following a single process across the enterprise while also retaining or improving patient satisfaction levels and resource efficiencies. There are controls in the process to help provide appropriate standardization without taking away from physician decision-making in the clinical care process.  

A common pain point with orders to scheduling is staffing.  Schedulers in physician offices play different roles, so the work can be shifted without shifting the people to support the work. Providers can implement the best technology and have their staff adopt a mutually defined process, but without a realistic review of current and future staffing needs, results will vary. Some providers have brought in outside revenue cycle professionals to work with them to conduct an evaluation of staffing here and in other areas within the revenue cycle workforce.

In a Clinically Driven Revenue Cycle model, the physician order drives the decision-making process. Schedulers no longer need to translate nonstandard appointment requests through phone calls or handwritten orders by fax. A task to the scheduler is delivered as a byproduct of the provider placing the order. Medical necessity can be considered at the time of the order or at scheduling, providing the patient with an educated experience prior to the day of care.

Payers require authorization for the service being performed prior to care being received. A decade ago, if the service ordered, scheduled and/or performed was different than what the authorization granted, an organization could appeal it with the insurance company. This was done with a simple phone call and proof of medical necessity and then they would pay for the service. This forced organizations to place a significant amount of focus on denial management, rather than denial avoidance. In today’s world, there are few appeal departments within insurance companies. Providers essentially have one chance to get it right. The source of truth for scheduling, authorizing and performing services must be the clinical documentation. The reduction of human intervention and interpretation advances the movement to denial avoidance.

Patient accounting work queues

The keystone of success in a Clinically Driven Revenue Cycle is communication within the solutions. Imagine if a biller used language from scrubber edits to ask a coder to make a correction. Or, if a clinical documentation integrity specialist used language from Centers for Medicare and Medicaid Services to instruct a physician on how to document appropriately. How many organizations use email to request medical records or condition code updates on claims? With the use of standard messaging and other communications tools, non-automated items that need an extra set of expert eyes can be directed at the right time and to the right person, with clarity on next steps that need to occur. Additionally, there is the option to validate the work once completed.  

When adopted throughout the organization, a Clinically Driven Revenue Cycle can provide tighter integration between clinical and financial information and improvements in coding and billing accuracy. It can also increase productivity through integrated communication between clinicians, revenue cycle and payers; and foster more accurate reimbursement through enhanced coding and clinical documentation processes. Instead of driving the work and checking the box, an organization can drive results in avoiding denials, increasing clean claim rates, avoid re-work and reduce the chance for delayed and/or missed reimbursement opportunities.