Why Revenue Cycle Solutions
Why most outsourced revenue cycle management models fail to deliver sustainable outcomes
Revenue Cycle Management should consistently convert provider time into predictable, maximized cash flow while minimizing administrative costs and maximizing business value. For growth-focused healthcare leaders, revenue cycle performance is not a billing function — it is a critical and strategic determinant of business value.
The problem with the industry
What healthcare practices are experiencing right now
The causes of these conditions are not billing errors. They are preventable structural and operational Revenue Cycle Complexity problems. RCC is pervasive and pandemic in US healthcare today.
- Inflated Accounts Receivable balances that never remain at target levels
- Cash flow that fluctuates, disconnected from patient volume
- A billing team that is always working but never fully caught up
- Denials that reappear, always inflating billing time demand
- Inadequate data to drive decisions
- Revenue cycle functional silos with no team alignment
- No team alignment around common objectives
- Administrative costs that rise without corresponding increases in revenue
- Weak operating profit margins
Revenue Cycle Solutions is an outsourced revenue cycle management partner built from the ground up to quantify and then prevent the root causes of Revenue Cycle Complexities — not just process claims.
The industry problem
Revenue Cycle Complexity is driving up time demand in a fixed-time-supply world
Most revenue cycle management companies operate within fixed-time-supply models. The structural cause comes from the industry-standard fixed percentage of revenue pricing models for "billing services."
When Revenue Cycle Complexity increases, Billing Time Demand increases. The standard response is either to ration time to protect desired profit margins or outsource to cheaper offshore labor. Neither strategy addresses the root causes of RCC, and neither can be effective unless RCC is very low — a condition that applies to only a small percentage of healthcare businesses.
The result in fixed-time-supply models is predictable: claims age, accounts receivable inflate, revenue is written off, and administrative costs rise. Since revenue cycle performance issues are always variable, RCC cannot be counteracted in fixed-time-supply structures.
- What determines Billing Time Demand?
- Billing Time Demand is determined by four variables: (1) volume, (2) systems in use (EMR, PM, Clearinghouse), (3) RCC incidence rates and types — there are 280 different types — and (4) present outcomes as measured by the ADO Score. Volume alone never accounts for all time demand. RCC is the single biggest determinant of time demand, by far, and must be accounted for.
- ADO Score
- A proprietary metric: a practice's Average Days Outstanding divided by its Target ADO (a proprietary calculation derived from the practice's payer mix). The acceptable ADO Score range is 95% to 105%. Above 105% means accounts receivable management is falling behind. Below 95% means the Target ADO is set too low. Target ADO is a dynamically managed, practice-specific value.
The only revenue cycle management structure that works in low, medium, or high RCC environments is a variable-time-supply model. Time supply must match time demand — and must be adjusted upward for existing poor outcome levels.
The root cause data
Where revenue and claim issues are actually created
Based on millions of claims analyzed over seven years, our Revenue Cycle Complexity data proves where revenue and claim issues originate — and most of it has nothing to do with billing:
You don't have a billing problem or a payer problem. You have a Revenue Cycle Complexity problem — and the size of your RCC Black Hole determines your revenue cycle outcomes.
- Revenue Cycle Complexity (RCC)
- The accumulation of structural and operational issues across a practice's revenue cycle that increase the time required to get a claim paid. It is the root cause behind reduced revenue, inflated AR, increased administrative cost, and reduced profitability and scalability. RCC begins to inflate Billing Time Demand exponentially once it exceeds 15% of claims volume. At 30% RCC, total billing time per visit doubles. At 60% RCC, total billing time per visit reaches almost 400% of baseline. We make it visible, measurable, and actionable.
The structural difference
We convert billing into business intelligence
Most revenue cycle vendors submit and manage claims. None other than RCS converts billing experience into RCM and Revenue Cycle Complexity data and intelligence.
The medical biller is uniquely positioned within the revenue cycle — the billing process is the only process in a healthcare practice directly affected by every source of Revenue Cycle Complexity: patient registration, VOB, authorizations, encounter documentation, credentialing, patient financial responsibility, coding, payer processes, and the systems in use.
We convert billing experience into Revenue Cycle Complexity data. That data becomes the foundation for cross-functional optimization and long-term performance improvement.
We have built the only revenue cycle management structure designed from the ground up to measure Revenue Cycle Complexity at its source, translate it into a Billing Time Demand model, and align Billing Time Supply dynamically with that demand. The Practice Data Solutions platform developed by Ascend Solutions is the instrument that makes this structure possible — the model is the asset; the platform supports the model.
Two different models
Our outcome-based model vs. traditional outsourced revenue cycle management
Traditional Outsourced Revenue Cycle Management
- Fixed percent of revenue pricing structure
- Fixed time supply staffing model
- Time is rationed or offshored when outcomes suffer
- Revenue loss normalized
- Frustration is normalized
- Blame is normalized
- Margin protection is prioritized over outcome
Revenue Cycle Solutions
- Outcome-based structure — continuous RCC reduction
- Variable time supply aligned to measured demand
- Lower ADO (Average Days Outstanding)
- Zero tolerance for preventable revenue loss
- Data eliminates blame — we attack and prevent the cause
- Fees decrease as outcomes improve
- Increasing enterprise value is the goal
Because Billing Time Demand is always variable, Billing Time Supply must be managed dynamically so that revenue cycle outcomes become a constant. As outcomes improve, billing efficiency improves — and the cost of our services declines. We are not incentivized to maintain inefficiency. We are incentivized to eliminate it.
Pricing
Outcome-based pricing: our fees go down as outcomes improve
When asked "what do you charge to do billing," you'll typically hear us say: "It depends on how much Revenue Cycle Complexity your operations, your payers, and your systems generate every day for us to counteract."
The point is structural. Outcome-based pricing means our fees are a variable percentage of revenue, indexed to two outcomes:
Revenue per claim
As claims become more valuable — as more allowable revenue is collected per encounter — our fees go down. We are aligned with your upside, not insulated from it.
Revenue Cycle Complexity volume
As we collaboratively reduce RCC, our billing efficiency improves and our cost basis declines. Those savings pass to you. The client controls the cost of their billing operation more than we do.
- How outcome-based pricing works
- Our fees are a variable percentage of revenue, indexed to revenue per claim and RCC volume. As complexity is reduced and outcomes improve, the time required to convert claims to cash declines. As billing efficiency improves, our cost basis goes down — and so do our fees. Pricing is not a fixed number; it reflects the condition of your revenue cycle. The better it performs, the less you pay.
Enterprise value
Why revenue cycle improvement compounds into enterprise value
Practice valuations in healthcare typically transact at 5x to 12x EBITDA, depending on specialty, scale, and growth profile. Every dollar of operating profit improvement that survives to the moment of a sale price multiplies into $5 to $12 of enterprise value.
- Revenue cycle is one of the largest controllable inputs into operating profit
- Most owners think about revenue cycle as a cost center. The better frame is: revenue cycle is the economic engine of the practice. When it performs well, every downstream outcome improves — cash flow, margin, scalability, and ultimately the multiple a buyer pays. Practice owners targeting a sale typically need two to three years operating inside a measurement-based model to capture the full valuation potential.
Better Data → Better Process → Better Outcome → Better Business.
Founded by a practice owner who solves problems
Built by someone who felt this problem firsthand
Revenue Cycle Solutions was founded by Robert M. Kowalick, Jr., PT, a former hospital-based physical therapist who built and scaled a seven-location private practice before transforming his in-house billing team into a full-service revenue cycle management company.
After more than 20 years in healthcare operations, Robert recognized that traditional billing models were not effective because they were not solving real problems. Poor RCM outcomes were caused by flawed structures, the wrong data, and nothing aligning teams as part of a revenue cycle organization. Good people were putting in honest effort and still failing. The system had to change.
"It's about time!"
Revenue Cycle Solutions evolved from a billing service into a revenue cycle management partner and ultimately into a revenue cycle time analytics and business intelligence creator. Through the Practice Data Solutions platform developed by Robert through Ascend Solutions, LLC, the billing process has been converted into a revenue cycle intelligence engine.
About Revenue Cycle SolutionsProven results over time
What happens when complexity is measured and reduced
A Revenue Cycle Solutions client achieved the following results through our collaborative model over a multi-year engagement. The gateway to all improvements was the 79% reduction in Revenue Cycle Complexity:
*Results from a single multi-year client engagement. Individual results vary based on starting Revenue Cycle Complexity levels, payer mix, systems in use, and operational alignment.
Ready to quantify your revenue cycle outcomes?
Start with a Free Revenue Cycle Assessment.
We will measure your revenue cycle outcomes, audit your AR, and determine the reasons why every claim over 30 days old is unpaid. Then we review the data and findings with you to determine the improvement potential within your practice. No cost. No obligation. Only clarity.
Start Your Free Assessment