5 Revenue Leaks in Your Medical Billing RCM and How to Fix Them
In the healthcare landscape — especially for rural and independent ambulatory clinics — every dollar matters. And your financial performance depends on those dollars. But many practices unknowingly lose thousands of dollars due to preventable gaps in their medical billing RCM (revenue cycle management) process.
If your medical billing and RCM aren’t airtight — from patient registration to final payment — you’re likely leaking revenue. But you don’t have to.
This article breaks down five of the most common revenue leaks in your medical billing RCM — and how to fix them.
1. Denials That Shouldn’t Happen
Payers deny more claims than ever today. KFF reported that in 2023, in-network denials were as high as 54%. And in Experian’s The State of Claims: 2024, 38% of healthcare leaders reported that 10% or more of claims were denied.
Sometimes denials are due to shifting regulations or technology errors on the insurance company or other payor’s end. But in many cases, the financial responsibility comes back to your claims processing and is preventable.
The most common causes of denials are bad or missing data and authorization issues.
And denied claims cost money. Not just the money lost, but the money lost due to the time your team spends to rework and appeal them.
Why Denial Management Matters
Every denial is a delay in getting paid and more work for your already busy team. The cost of reworking or appealing denials cost an estimated $57.23 per claim in 2023, mainly by labor expenses.
Why It Matters
The average medical biller makes roughly $21 an hour. If you’re spending $57.23 for a biller to rework or appeal a claim, you’re paying them more than 2 hours per claim. That’s two hours they could be billing for more revenue. Reworking and appealing claims is also tedious, so you’re the price of burnout too.
How to Avoid or Reduce Denials
- Know your claim denial rate, clean claim rate, and claim appeal rate.
- Analyze patterns in how you’re submitting claims: Are you missing authorizations or using incorrect modifiers?
- Have your billing team (in-house or outsourced) proactively flag and resolve issues.
- Use an AI solution, like Azalea Billing Assistant.Your team can use it to automatically catch and alert them to potential coding errors before claims are submitted, flag missing or inconsistent information, automate claim status tracking, and save countless hours of manual, tedious work.
2. Claims Sit too Long Before Submission
Without accurate billing, slow claim submissions equals slow cash flow. Whether it’s a staffing gap or a clunky process, delays in getting claims out the door affect your entire operation.
Why It Matters
Your staff and providers are working for free until claims are paid. The longer claims sit, the longer it takes to recover costs.
How to Fix Slow Claims in Your Medical Billing RCM
- Monitor your average days to file claims.
- Use automation when possible to scrub and send batches faster.
- Have a backup plan. If your billing staff is out or underresourced, outsourcing or an AI tool might be worth considering.
- If you can reduce denials, your billers can spend the time they take reworking and appealing claims to submit new claims faster.
3. No RCM Analytics and No Insight
It’s not enough to “feel” like medical billing is working. Without clear data, you can’t know what’s broken and begin to improve it.
Why It Matters
If you’re not measuring key RCM metrics, you’re flying blind.
How to Get Insights
- Track and know your days in A/R, first-pass resolution rate, and % of A/R over 120 days regularly. That’s easy with a good EHR and/or Analytics solution.
- Benchmark your numbers against MGMA’s or your specialty’s industry averages.
- Use the insights you discover to guide staffing decisions, set team goals, and inform leadership.
4. Coding Errors Cost You
Coding issues are a quiet killer in the revenue cycle. They can lead to underpayments, denials, and compliance risks.
Why Coding Matters for Medical Billing
The American Medical Association (AMA) estimates that roughly 12% of medical claims have coding errors that lead to denials or delays in payments. And over-coding can trigger audits, while under-coding leaves money behind.
How to Fix Coding Errors
- Audit charts to make sure documentation matches medical codes.
- Validate the use of modifiers, incident-to billing rules, and E/M levels.
- Make sure your billing team gives you feedback in addition to doing claims submissions.
- Use an AI solution to let billers automatically catch potential coding errors before claims are submitted and spend fewer hours manually scrubbing bills.
5. Incomplete Scope of Medical Billing RCM
Some billing teams — especially some outsourced ones — may only handle part of the billing process. If tasks like appeals, patient statements, or bad debt follow-up aren’t part of the process from the beginning, your team ends up doing double the work. Or worse, the work doesn’t get done at all.
Why It Matters
Partial service leads to partial payment. If just 10% of claims are denied and not reworked or appealed, you’re leaving a lot of money on the table.
How to Fix Your Scope
- Ask for a full breakdown of what your billing team or billing service provide.
- Ensure you have end-to-end revenue cycle management in place — from charge capture to collections.
- Evaluate your ROI, not just percent-of-collections pricing.
Ready to Plug the Leaks?
The bottom line is that revenue leaks in your medical billing RCM process won’t fix themselves. And they’re often hidden until it’s too late. Whether you manage billing in-house or work with a partner or service provider, your financial health requires a clear, connected, and accountable RCM strategy.
Azalea Health helps rural and independent practices improve medical billing, reduce claim denials, and build a smarter approach to revenue cycle management that delivers real results without increasing costs.
Get a free RCM analysis for your clinic from Azalea Health and find out where you could be losing revenue and how to fix it. Simply add “I want my free analysis” in the comments field in the form.
At Azalea Health, we help rural and independent practices improve medical billing, reduce claim denials, and build a smarter approach to revenue cycle management that delivers real results.
Get a free RCM analysis and find out where your clinic may be losing revenue.
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