PCMH vs. ACO in Healthcare – Which is Best?


Many healthcare providers are facing the rising costs of providing medical care. These include drug, material, education, and other expenses.  At the same time, insurance costs for patients are also rapidly increasing.

Deciding how to provide medical care in the most efficient and cost-effective ways is becoming an increasingly complex healthcare management issue. In tandem with these problems is the impact of new technology on healthcare in a variety of ways. Interconnection of providers and standardization of communication methods is allowing for an increase in both transferability and accessibility of medical information and records.

The need for new models of healthcare has prompted a surge in alternative care models that are trending towards value-based approaches. These models can include coordination between healthcare providers to provide more comprehensive care. Two such models are ACOs and PCMHs discussed below.

What Is ACO in Healthcare?

What does ACO stand for in Healthcare? The Centers for Medicare & Medicaid Services (CMS) define Accountable Care Organizations (ACO) as health care providers, including hospitals and doctors, who agree to coordinate care to Medicare patients.

An organization that includes a wide range of providers can help in many ways such as cutting unnecessary costs and providing the right care at the right time for individual patients; balancing affordability with accountability. CMS encourages coordination and compliance with value-based care through the Medicare Shared Savings Program which offers “incentives for health care providers to work together to treat an individual patient across care settings, including doctor’s offices, hospital, and long-term care facilities.”

What Is the Goal of an Accountable Care Organization?

what does ACO stand for in healthcare?

An ACO, which can include many different providers, has the goals of providing the best quality service to patients at the best possible time. They also collaborate to avoid duplication of services, prevent medical errors, and reduce costs. Besides focusing on the value of care provided to a single patient, ACOs also focus on population health.

Some major organizations with many employees are forming or joining ACOs with healthcare providers to manage preventative care and help reduce healthcare costs to employees. Health information management consulting companies cite HIM via electronic data interchange (EDI) as an essential goal that can impact the quality of care between providers.

As part of the focus on cutting costs and offering efficient care, how providers are reimbursed is changing as well. ACOs also have a joint goal of qualifying for and meeting the standards for value-based care such as the Medicare Shared Savings Program.

Managing costs is a critical component of Revenue Cycle Management for any healthcare provider. Healthcare RCM firms like Nearterm can help you improve processes concerning these financial concerns.

What is a PCMH Provider in Healthcare?

What is a PCMH provider? A Patient-Centered Medical Home (PCMH) is a place and a way of organizing care that can involve coordinating between healthcare providers such as nurses, pharmacists, nutritionists, and social workers. These providers focus more on partnerships with individual patients and their families to provide high-quality care at affordable rates.

The focus on medical homes ranges from assisted living facilities, home health care, nursing homes and larger communities of various models. Since the concern is on patient-centered care, it can be thought of as a bottom-up approach to healthcare. For more information, reach out to the healthcare management consultants at Nearterm today.

What is the Goal of a Patient-Centered Medical Home?

Focusing on value-based patient care involves considering patient needs from the home up. This can include coordinating care between providers for basic and also special home healthcare needs. A key component of PCMH care is the relationship between the patient and accountable health care providers.

Accountable providers can be a primary physician or team of professionals with the joint goal of efficiently managing the patient’s healthcare and even social needs. PCMHs can provide accessible services quicker, offer enhanced personal care around the clock, and alternative methods of communication with providers. This also includes carefully managing evolving patient care such as transitioning from assisted living to more advanced care needs. Coordinating care also carries the potential of reducing costs and passing additional value on to the patients.


what is ACO in healthcare?

Patient-Centered Medical Homes and Accountable Care Organizations are not the same although they both focus on patient care by coordinating services between healthcare providers and can include long-term care. How they approach patient care is fundamentally different.

PCMHs are more centered on the individual patient with consideration to their living accommodations and end of life treatment. A PCMH can join or be a part of a larger Accountable Care Organization.

In contrast, ACOs coordinate services between providers to offer better services at reduced rates that include considering government reimbursement requirements. Their focus is not just on individual patient care but also population health management for larger areas.

To determine which option is the best choice for any provider involves considering many complex elements. Nearterm’s Healthcare Management Consultants will help you decide what factors to review and provide more information. Contact Nearterm today to learn more about how we can help improve your patient care through enhanced management coordination.


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Why Is Revenue Cycle Management Important in the Healthcare Industry?

what is revenue cycle management in healthcare?

Revenue Cycle Management (RCM) plays an important role in the healthcare industry. Managing revenue is vital for any business but may not be the primary focus of healthcare providers. However, these providers need revenue to pay for medical supplies, salaries, equipment, and more.

Healthcare costs are increasing with technology adoption in a time when an aging population is foreshadowing increased demand for care. Insurance and medical suppliers are placing an increased burden on patients and providers. Value-based healthcare payment models are also reshaping how providers can approach revenue cycle management.

What Is Revenue Cycle in Healthcare?

Revenue Cycle Management is how an organization handles the finances and processes associated with different steps of patient care from start to finish. It begins when a patient is first encountered or scheduled for an appointment and continues through the services provided to the billing afterward. Patient scheduling offers the opportunity to gather information vital to the claims process, such as insurance information, to verify eligibility.

The healthcare revenue cycle process includes coding medical services and billing insurance. Making sure that patients have eligible insurance on file can help in determining costs for various treatments. Faster and more accurate claims transmission allows for greater flexibility in arranging patient care.

After medical services have been provided, another key medical billing RCM process emerges. Managing past due patient accounts and accounts receivables impact the provider’s cash flow through collection times. The revenue cycle in healthcare also includes bad debt or managing uncollectible patient records. When patient accounts are up to date, the cycle continues with scheduling the patient’s next visit and perhaps even offering reminders.

What Is Revenue Cycle Management in Healthcare?

While there are variations between provider types and how the specifics are handled, medical revenue cycle management revolves around the finance and administrative side of the organization.

What is RCM in medical billing? This includes not just patient collection issues but also costs and efficiency of claims submission. These factors are also impacted by staff training.

revenue cycle management process in medical billing

Medical billing has been impacted by recent changes to healthcare models that now focus on value-based care. In addition to this, medical providers have also recently been required to transition to new diagnosis codes ICD10. For more information on understanding the hospital revenue cycle and for assistance with various related issues, consider Nearterm’s Healthcare Revenue Cycle Consulting.

Why Is Revenue Cycle Management Important in the Healthcare Industry?

There are many benefits to efficiently managing your revenue cycle. The overall goal is to increase revenue throughout the various processes by first identifying points of friction and then resolving them.

These problems may include fraud, waste, and abuse such as unnecessary tests and procedures. For some healthcare providers, revenue and finances are not the primary concern. Some may be more focused on patient care.

Problems and issues with an RCM process in healthcare can impact various other processes and take time away from patient care or medical training. The rapid pace of technological improvement has also greatly improved medical billing through electronic data interchange made available by healthcare clearinghouses and electronic claims submission. Technology has improved many other areas but also resulted in new security issues.

Medical revenue cycle management also includes medical records and how they are accessed and stored for billing purposes. Recently there has been an increase in attacks on medical organizations aimed at accessing medical records. These records and other personal health information (PHI) are protected by federal law such as the Health Insurance Portability and Accountability Act (HIPAA) Privacy and Security Rules.

Ensuring medical records are properly protected while processing financial information is a key concern that could potentially detract from patient care. This emphasizes the importance of health information management at your organization. Effective hospital revenue cycle management will include the security of PHI and patient financial information.

Finally, the RCM process in healthcare is important because it can be analyzed to find a process that can be automated safely leading to more time spent with the patient. For more information on why you should outsource your RCM administrative and financial needs contact the healthcare management consultants at Nearterm today!

Revenue Cycle Management Process in Medical Billing

why is revenue cycle management important in the healthcare industry?

The healthcare revenue cycle management process traditionally involved long delays between patient care and associated payment as claims submission was a lengthy process. This is the communication between healthcare providers and the patient’s insurance companies to negotiate payment for services as well as negotiating payment with patients.

What insurance will pay for is impacted by many factors including the patient’s specific plan and what diagnosis codes the provider submits. The medical billing RCM process involves preparing a claim and sending it the insurance. These days technology allows for rapid claim inputting and submission as well as automated “scrubbing” to ensure these claims meet basic requirements for acceptance.

Claims can be rejected for a wide range of problems ranging from a lack of information, improper coding, compatibility issues, and system errors. The number of claims that pass on their first attempt is a key metric to consider in the revenue cycle for medical billing. Multiple claims rejecting for the same errors could be caused by problems with the inputting process as a result of a lack of training. They may be resolved with the proper medical billing denial management process.

Electronic claims can allow for immediate approval for procedures and services from a patient’s insurance company. This can allow a provider to offer a range of services to the patient and increases the likelihood of receiving associated payments. Thus efficiently managing claims allows for greater flexibility in patient care concerning their finances and ability to pay. It also allows the potential for decreasing collection times on services which translates to increased cash flow and better Key Performance Indicator ratios.

On the extreme side of the revenue cycle is the issue of outstanding payments leading to bad debt. Managing the collections process is not always pleasant and will detract from providing valuable care to patients, especially to those in need. Some providers choose to write off the bad debt as a loss.

Efficiently managing RCM, at many different steps in the process, may help to decrease the number of cases that reach bad debt. One powerful solution to these issues is to contract with a third party Healthcare Revenue Cycle Management company. Nearterm’s Healthcare Management Consultants can offer experienced RCM consulting to help increase cash flow, lower bad debt expenses, improve patient satisfaction with financial services, as well as reduce operating costs and increase productivity.

Contact the Nearterm team oday for more information about how our services can make you more productive and profitable.


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What is Health Information Management & Why Is It Important?

what is medical health information management

Individuals involved in healthcare around the world acquire and generate a significant amount of personal health information about patients. The scope of health information includes not only personal information and private health data, but also associated payment forms and transactions. Clinical notes, pharmacy, and outpatient care records are also covered health information.

As technology has developed, it has greatly increased the potential for reliability, speed, efficiency, and usability of medical records. However, this also increased the ability for information to be misused, sold, and accessed without an individual’s consent.

As technological advancements outpaced ethical and legal policy, it became necessary to define medical/healthcare information management.

What is Health Information Management?

According to AHIMA; “Health Information Management (HIM) is the practice of acquiring, analyzing, and protecting digital and traditional medical information vital to providing quality patient care.”

The American Health Information Management Association (AHIMA) was formed to define and oversee the training and educating of Registered Health Information Technicians (RHIT) and Registered Health Information Administration (RHIA) certifications.

In tandem with this association, several laws were passed to support patient rights and the practices involving HIM. The Health Insurance Portability and Accountability Act (HIPAA) along with subsequent Privacy and Security Rules were designed to address many issues in this field. These were augmented by the Health Information Technology for Economic and Clinical Health Act (HITECH) which requires contingency plans for emergencies and for when PHI health information management technology systems are impacted.

Besides regulations and requirements for covered entities, these laws also moved to standardize many aspects relating to HIM. Recently healthcare has started transitioning to value-based therapy reflecting each organization’s role in overall healthcare management.

What is HIM in Healthcare?


Health Information Management is essential for healthcare providers and other HIPAA-covered entities to ensure patient information privacy and security. HIM involves medical coding and billing, ensuring compliance with government regulations, and handling customer requests for Personal Health Information (PHI).

This field also involves medical records retention and transition to electronic formats, as well as analysis of health care trends and the implementation of improvements. Because healthcare information overlaps many different areas in any healthcare cycle, it became necessary for many organizations to create HIM departments to oversee these important requirements are adhered to as well as managing training and education of staff.

Healthcare Information Managers would oversee all facets of an organization’s collection and retention of records as well as security, privacy, analysis, and implementations, coding, billing, and compliance.

Healthcare information managers work in healthcare organizations and associated businesses around the world. These include hospitals, dentists, pharmacies, chiropractors, and third-party healthcare services.

Security and HIM

Healthcare breaches have become a significant problem for healthcare providers today. In 2015 almost 100 million healthcare records were breached by cyber attacks. The impact from breaches has declined since then due to the implementation of privacy and security regulations for healthcare providers; however, the number of attempted breaches has increased over that same time.

As attackers become more organized or sophisticated the potential for successful breaches will increase unless organizations keep pace or excel with relevant health information management practices. Those interested in stealing health information may also gain access through the front door. In organizations that utilize unsecured wireless networks, or have lax regulations concerning secured network devices, someone could gain access from within and walk out with the data.

Role of a Health Information Manager

importance of health information management technology

What a healthcare information manager does will vary by organization. Many roles in this field require one to first pass an accredited academic program as well as a certification test. These roles include collecting and securely storing medical records and Protected Health Information (PHI).

Healthcare facilities often utilize coders and claims specialists, even third-party medical coding services, to handle medical records and healthcare revenue cycle management. HIPAA rules also impact what information you share with business associates. Your organization might be liable for damages even if a breach occurred due to a third-party business, which is why it is important to choose certified HIM companies.

In addition to the roles above, HIM staff would also implement and enforce security and privacy rule adherence on top of designing and improving network security.  At a minimum, this includes considering administrative, technical, and physical safeguards for traditional and electronic PHI.

Health information management duties can also include analysis and implementation of improvements. For example, an analyst might use the aggregate available information to determine patterns in various areas which can be used to devise improvements to an organization.

Importance of Health Information Management

HIM is vital for every healthcare organization and associated business. Not only are there legal requirements that must be adhered by to receive certain incentives and avoid penalties, but organizations have an ethical responsibility to protect PHI in their possession.

Breaches impact patient trust in a healthcare provider and may prohibit a patient from sharing vital information for fear of exposure. Hackers can also steal patient payment information causing residual harm such as identity theft and stolen money. Both of those factors can impact a patient’s willingness to seek care at certain providers.

A focus on HIM also allows an organization many positive benefits such as the potential for increased efficiency and optimization of healthcare information system access and other key aspects involved with revenue cycle management. A coordinated effort to standardize and efficiently operate tasks involving PHI will take a manager dedicated to the task, especially in larger organizations.

For healthcare management consulting, or for more information on HIM and how it may impact your organization, please contact Nearterm today.


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Top Revenue Cycle Key Performance Indicators

physician revenue cycle metrics

Healthcare organizations must manage their revenue cycle with an approach that balances patient care and quality. Due to increasing medical and drug costs paired with higher insurance premiums and deductibles, efficient revenue cycle management (RCM) is more important than ever.

There are many indicators one could use to gauge the effectiveness of various elements of the revenue cycle for their organization. However, these vary based on the type of organization doing the measuring. A pharmacy will value certain indicators more than a hospital might, and vice versa. Therefore, revenue cycle Key Performance Indicators (KPIs) will differ for each organization.

The Healthcare Financial Management Association (HFMA) approached this problem and determined 29 KPIs as a standard for healthcare revenue cycle excellence known as the MAP Keys. Regardless, some of these KPIs will not apply to certain organizations, and some will be valued more than others.

Revenue cycle performance benchmarks found in the MAP Keys can help determine where your company currently performs as well, as track improvements over time to desired levels.

To determine your organization’s best benchmarks and KPIs, you can reach out to one of our experts at Nearterm today.

Healthcare companies come in all sizes, from national pharmacy chains and large hospitals to small-town clinics and stand-alone providers. Some smaller organizations may need to hire additional staff to work on medical billing and revenue cycle management. These costs can add up, especially when considering training and education, turnover rates, and work limitations requiring multiple employees for each role.

Due to these factors, common financial tasks such as collections and medical accounts receivable services are often outsourced to third parties. You can also improve your RCM with the help of healthcare RCM companies. Modern technology allows for more efficient and seamless integration of third-party services (like healthcare clearinghouse services) than ever before.

5 Important Revenue Cycle KPIs

Here are some of the top KPIs to consider tracking now to measure important aspects of the revenue cycle:

  • Point-of-Sale Service (POS) Cash Collections
  • Clean Claim Rate
  • Days in Total Discharged Not Billed
  • Bad Debt
  • Days in Accounts Receivable

Point-of-Service (POS) Cash Collections

This KPI tracks POS collection and relates to payment received before services rendered and up to seven days after. This will help determine the effectiveness of your POS systems and those operating them.

This revenue cycle performance metric can be found using information from your POS system and your accounts receivable records. It can be calculated by taking the POS payments and dividing it by the total self-pay cash collected.

Tracking this and related revenue cycle metrics can identify problems in POS operations that are impacting RCM. Decreased efficiency in up-front payments may lead to increased collections and thus a loss of revenue. However, organizations with typically higher payments that require long-term payment options (greater than seven days average) may not benefit from this metric as much.

Clean Claim Rate

The clean claim rate corresponds to the claim denial rate in that it helps reveal problems and inefficiency in claims submitting and processing. Rejected claims require time to correct and may incur extra charges. The longer it takes to submit claims and resolve them, the longer it takes to determine eligibility and receive payments.

While there are many KPIs that relate to claims processing efficiency, the clean claim rate will show the average daily number of claims that pass without needing editing compared to the total number of claims accepted. This metric reveals the effectiveness of your claims processing and medical billing team. You can usually obtain this information from your claims management system or RCM Company.

Days in Total Discharged Not Final Billed (DNFB)

This healthcare key performance indicator helps determine revenue cycle performance by focusing on the claims-generation process. Variations of this metric will show the impact on cash flow due to claims inputting, and it can include issues related to delayed claims. A higher rate may reveal that claims are not be submitted promptly and warrants further investigating.

For example, if staffing issues are keeping claims from being submitted in a reasonable time-frame, it impacts your revenue cycle. You can calculate this metric by dividing the gross dollars in DNFB by the average daily gross patient service revenue, which is determined by the income statement and unbilled accounts receivable.

Bad Debt

Another useful KPI to consider is Bad Debt, which shows the effectiveness of collection efforts. It can also be used to determine the effectiveness of pre-service financial counseling or similar programs. It is important to note that this is not debt that has already been written off as lost.

Higher bad debt indicates inefficiency in previous areas of the revenue cycle including POS collections and financial counseling. It can be calculated by dividing bad debt from the income statement by gross patient service revenue over a set period.

Days in Accounts Receivable (A/R)

Finally, Days in A/R reveals how long it takes to get paid for services on average. This is useful in determining the effectiveness in obtaining payment for services, and how well the account receivables are being managed.

To find this KPI divide the total A/R by the average daily net patient service revenue using information from the balance sheet and income statement. To get the average daily net patient service revenue, you can also divide total annual sales by 365.

revenue cycle key performance indicators


There are many different performance indicators that healthcare businesses can use to benchmark and track various aspects of their revenue cycle. The key performance indicators to focus on will vary by organization type.

The Healthcare Financial Management Association developed 29 KPIs for healthcare companies and an additional six physician revenue cycle metrics. Of those, there are several that stand out as closely related to revenue cycle management. These are POS Cash Collections, Clean Claim Rates, Days in Total Discharged Not billed, Bad Debt, and Days in Accounts Receivable.

Calculating and tracking these revenue cycle KPIs will help identify problems or areas of improvement for your revenue cycle. However, it is not always practical or cost-efficient for a healthcare company to manage their revenue cycle in-house. Besides the various RCM metrics that could be tracked and identifying which are most important, there is also the need for quick and efficient medical billing, claims work, and financial management. On top of this is the need for constant training and education for staff working in these areas. Because of these factors, many healthcare organizations choose to outsource these important functions to qualified experts or healthcare management consulting firms like ours.

To find out more about how you can improve revenue cycle management efficiency and save on costs, contact our experts at Nearterm today.


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