How to optimize hospital RCM: practical strategies

Brazilian hospitals are providing more services and receiving less for what they produce. The accepted denial rate jumped from 0.78% to 1.96% of gross revenue from health plans between 2021 and 2024, according to the Anahp Observatory 2025, from Anahp (National Association of Private Hospitals). In absolute terms, that means tens of millions of reais left on the table every year.

Lost revenue is spread across the entire cycle: incomplete registration at admission, an item not recorded during the hospital stay, a wrong TUSS code in billing, a denial appeal that expired without being filed. Optimizing RCM means identifying where every cent is lost and taking strategic action to stop losing more.

For those who do not yet know what RCM is, the article Revenue Cycle Management: why does this concept matter? provides the necessary foundation.

Where revenue cycle losses occur

Revenue cycle financial losses fall into three categories with different causes and solutions.

The denial is the most visible: the payer refuses to pay for a billed item because of missing authorization, incomplete documentation or a mismatched code. It shows up in the payer’s remittance and can be appealed under ANS Normative Resolution No. 559/2022, which sets the maximum deadlines for reviewing and paying hospital claims.

The invisible loss is quieter: the item was used but never billed. It triggers no alert and no refusal report. The hospital simply does not charge for the service it provided or the supply it used.

Delayed payment hurts cash flow even when the item was approved. The industry’s average time to payment was 68.56 days in 2024, according to the National Association of Private Hospitals. For hospitals with thin margins, every extra day has a significant cost.

How to strengthen pre-admission to prevent denials at the source

Pre-admission is the stage where RCM delivers the greatest return on effort invested. Errors made before the hospital stay spread through every stage that follows.

Eligibility verification and prior authorization

Confirming active coverage, waiting periods and plan limits, and requesting prior authorization with complete clinical documentation, are steps that need to happen before any elective care.

Procedures without a valid authorization are automatically denied by most payers. Tracking authorization validity needs to be systematic: authorizations that have expired or were issued for a procedure different from the one performed are a frequent cause of avoidable denials.

Registration protocols and admission checklist

Incorrect registration data contaminate the claim before care even begins. The solution is to standardize admission with a mandatory checklist covering the critical fields: plan member card number, expiration date, plan and subplan, requesting physician with CRM (medical license) number, ICD code on the request and authorization number when required. Hospitals that implement this checklist significantly reduce rework caused by registration inconsistencies.

Concurrent audit: how to structure it in practice

Concurrent audit is performed while the patient is still admitted, which makes it RCM’s most effective tool: it allows inconsistencies to be corrected before the claim is closed. To explore the concept further, the article The importance of concurrent audit for hospitals offers a detailed analysis.

What to audit during the hospital stay

Prioritizing is essential for the process to be sustainable. The most effective criteria are: estimated claim value, procedure complexity, denial history with the payer and length of stay.

During the review, the key points are: authorization completeness, consistency between the ICD code and the procedures performed, recording of materials and medications, and consistency between the medical record and the items to be billed.

How to integrate audit and the clinical team without friction

When the process is perceived as policing, it meets resistance. Positioned as support for correct recording, buy-in increases. The most effective approach is to create direct communication between audit and nursing, with quick feedback on pending items.

Short periodic meetings to present the main denial reasons identified serve an educational purpose and build good documentation practices into the team’s daily routine.

Care records and invisible losses: how to track what was not charged

The categories with the highest volume of invisible losses are: continuous-use medications, small materials in nursing procedures, room fees and equipment without a formal record, and procedures performed outside standard hours.

The root of the problem is the disconnect between the medical record and the billing system. When nursing records a medication in the medical record but that data is not automatically captured by billing, the item is lost. The most effective way to identify it is to systematically cross-check the electronic medical record against the billed claim: the difference between the two sets reveals what was consumed and not charged.

Done manually, this cross-check is unfeasible at scale. Artificial intelligence removes the bottleneck by automating the comparison and flagging discrepancies for review. Hospitals that implement this process generally identify a volume of invisible losses greater than the value of the denials appealed in the same period.

Billing and denial management: from coding to appeal

Coding errors that cause the most denials

The most recurring errors are: outdated TUSS codes or codes incompatible with the contract, mismatches between the ICD code and the procedure billed, duplicate charges and materials with specifications different from those authorized.

Keeping an up-to-date base of contractual rules by payer and cross-checking it against the items before the XML is sent significantly reduces this type of denial. The article Five common hospital billing errors details the main points of attention.

How to structure the appeal process for a high reversal rate

ANS Normative Resolution No. 559/2022 sets the deadlines for appeals. Missing the deadline means losing the right to appeal. The three factors that most increase the reversal rate are: complete clinical documentation, a technical argument grounded in the contractual rules and process traceability so that no appeal expires without a response.

Hospitals that manage appeals with a queue prioritized by value, deadline and payer achieve consistently higher rates. More details in Denial appeals: how to control and recover revenue.

Indicators that show whether RCM is working

Accepted denial rate: the percentage of gross revenue refused and not reversed. Below 1%, the process is under control. Above 1%, losses are considerable. The industry recorded 1.96% in 2024 (Anahp).

Average time to payment: in 2024, the industry average was 68.56 days. Above 75 days, there are bottlenecks in closing or systematic delays from specific payers.

Billing rework rate: the percentage of claims corrected and resubmitted after closing. Ideally below 5%.

Lost revenue identified: the value of items provided and not billed, calculated by cross-checking the medical record against the claim. Measurable only with technology.

Appeal approval rate: the percentage of appealed denials that were reversed. Below 50%, appeals are poorly grounded or late. Above 70%, the process is mature.

Optimizing RCM requires integrated technology, process and management

To work, the strategies must be integrated with one another. Rigorous pre-admission gets even better with attentive concurrent audit. Accurate indicators are only valuable if there is a process to act on them.

Rivio is a company that uses artificial intelligence to manage the entire hospital revenue cycle, increasing revenue and operational efficiency.

From audit to payment, our technology analyzes clinical records, cross-checks information against hospital claims, identifies and corrects denials, submits the XML and manages denial appeals, all automatically.

With Rivio, hospitals and clinics leave the bureaucracy to AI and can focus on what really matters: caring for the health of the Brazilian population.

FAQ - frequently asked questions about RCM optimization

What is the difference between a denial and an invisible loss?

A denial is a formal refusal by the payer: the item was billed and rejected. An invisible loss happens earlier: the item was used but never billed. A denial shows up in remittance reports. An invisible loss can only be identified by cross-checking the medical record against the claim.

How do you know whether your denial rate is above average?

The Anahp Observatory tracks this rate. In 2024, 1.96% of gross revenue from health plans was denied. Any number above that requires urgent attention. Below 1%, the process is under control.

What is concurrent audit and why does it reduce denials?

It is the review of the claim while the patient is still admitted. It makes it possible to correct recording errors and complete documentation before closing, eliminating denials that would be unavoidable after discharge.

What are the main coding errors that lead to denials?

Outdated TUSS codes, mismatches between the ICD code and the procedure billed, duplicate items and materials with specifications different from those authorized.

How does artificial intelligence help optimize RCM?

It automates the cross-check between the medical record and the claim to identify invisible losses, validates coding against contractual rules before the XML is sent, generates denial appeals automatically and monitors cycle indicators in real time.