Revenue cycle best practices

By Tiffany E. McFarland, RHIT, CPCD, Analyst, Coding & Reimbursement, December 1, 2025

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In today’s increasingly complex health care environment, dermatology practices, whether solo or group, must adopt effective revenue cycle management (RCM) strategies to remain financially sustainable. The dermatology revenue cycle involves multiple steps, from patient registration and insurance verification to claims submission and collections. A single misstep in this process can lead to denied claims, delayed payments, or lost revenue.

Implementing best practices tailored to your practice’s size and structure can optimize reimbursement, streamline operations, and reduce administrative burdens.

Below are five RCM strategies designed to support stronger financial performance and healthier practice operations:

1. Prioritize accurate and timely documentation

Benefit

Accurate documentation supports clean and compliant claim submissions and reduces the risk of claim denials and audits. For dermatology-specific services, such as lesion destruction, excisions, biopsies, and cosmetic procedures, detailed clinical notes help demonstrate medical necessity and meet payer requirements.

• Solo practices: Documentation during or immediately after the patient’s encounter ensures details of the visit are not overlooked and billing accuracy is maintained. In this current technology-driven climate, AI-powered medical documentation software and tools can reduce documentation time.

• Group practices: Standardizing documentation practices across physicians and non-physician clinicians promotes consistency and smoother coding and billing workflows. This is especially important when multiple physicians or non-physician clinicians perform similar procedures but vary in how they document care.

Possible negative impact

Solo dermatology practices may miss billing opportunities. Group settings risk having inconsistent documentation styles leading to claim rework or audit exposure.

2. Implement automated insurance verification tools

Benefit

Real-time insurance verification, before the service is provided, reduces eligibility and policy-related denials. Use of automated tools can facilitate and ease this process in real time, flag changes, and ensure accurate patient information is on file.

• Solo practices: Automation saves staff time and enables efficient operations without additional hires. Tools that verify insurance during appointment scheduling can save time at check-in and reduce claim denial rates related to patient eligibility.

• Group practices: Use bulk-verification tools integrated with electronic health record (EHR) systems, which scan multiple scheduled patients at once, streamline workflows across the practice, and allow front-office staff to focus on patient interactions.

Possible negative impact

Initial software implementation costs and rollout challenges may strain smaller practices. Group practices may experience workflow disruptions during training or software rollouts if not carefully managed.

3. Collect patient payments upfront when possible

Benefit

Collecting copays, deductibles, co-insurances, and outstanding balances at the time of service improves cash flow, reduces accounts receivable, and minimizes time-consuming patient follow-up to collect outstanding payments or sending them to collections.

• Solo practices: Clear financial policies and upfront patient communication reduce strain on cash collections.

• Group practices: Automated cost-estimation tools that calculate out-of-pocket costs and generate pre-service payment plans or consent forms reduce billing disputes and increase transparency.

Possible negative impact

Patients may delay care if presented with unexpected costs. Practices must ensure staff are trained to discuss financial matters with empathy and flexibility. For solo practitioners, balancing care delivery with these discussions can be difficult.

4. Leverage electronic billing platforms and clearinghouses

Benefit

Electronic billing platforms streamline claim submissions, reduce errors, and provide visibility into claim status. Clearinghouses can flag issues before claim submission, preventing rejections and adjudication delays.

• Solo practices: Cloud-based billing platforms simplify claim management and provide visibility into claim status, even for small practices without a dedicated billing team.

• Group practices: Centralizing billing systems manage large claim volumes, generate benchmarks, and support financial analytics across physicians or locations.

Possible negative impact

Transitioning to a new platform requires staff training and may cause temporary disruptions. Solo practitioners might need IT support or vendor assistance to manage system issues, while large practices may face resistance resulting in slow adoption.

5. Conduct regular RCM audits and staff training

Benefit

Audits and education ensure coding accuracy, identify denial trends, and prompt billing practices to determine areas for improvement. Ongoing staff education keeps teams current with coding changes (e.g., CPT, ICD-10-CM, and HCPCS), payer policies, and dermatology-specific documentation requirements.

• Solo practices: External coding consultants can be a valuable resource when internal capacity is limited.

• Group practices: Quarterly coding education updates and denial management reviews keep workflows consistent and proactive.

Possible negative impact

Audits and training require time and financial investment and therefore may be challenging. Solo practices may struggle to schedule reviews without impacting patient volume. For group practices, inconsistent participation or low follow-through can limit the effectiveness of these efforts.

The role of automation in modern RCM

Automation, coupled with human oversight, across both solo and group settings, can be transformative in dermatology revenue cycle management. Such tools include:

• Automatic eligibility checks and insurance verification

• Electronic prior authorization workflows

• EHR-integrated charge capture

• AI-driven coding assistance

• Automated claim scrubbing and tracking

These tools improve efficiency and accuracy, reduce manual data entry, and streamline payer interactions, thus improving staff satisfaction. While initial setup requires careful planning, the long-term benefits typically outweigh the upfront cost, especially in a high-volume specialty like dermatology.

Strong revenue cycle management is critical not only for profitability and compliance but also for supporting high-quality patient care. While the principles of RCM apply universally, how they are implemented should reflect the unique staffing, resources, and structure of the dermatology practice.

• Solo practices can leverage automation and strong documentation habits to maximize efficiency with limited resources.

• Group practices can focus on standardization, training, and system integration to manage complexity at scale.

With a proactive, well-informed approach, practices can transform revenue management into a competitive advantage. Visit the Academy’s Coding Resource Center for additional guidance.

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