The Business Case for Involving RCM in Health Equity Strategies

By AGS Health

January 25, 2023

Health equity has taken center stage as healthcare organizations across the spectrum seek ways to effectively identify and close areas of weakness to achieve care parity across race and ethnicity, gender, sexual orientation, socioeconomic status, and other factors. There is a solid business case for doing so, starting with the plethora of quality-based care models that now integrate health equity requirements.

For example, the Centers for Medicare and Medicaid Services (CMS) and the Centers for Medicare and Medication Innovation have launched the Accountable Care Organization Realizing Equity, Access, and Community Health (ACO REACH) Model, a test program designed to address health inequities and improve support for provider-led organizations in risk-based arrangements. It requires participants to address health disparities and support better health outcomes by reducing avoidable utilization, improving quality scores, and ensuring safe care transitions. This includes the creation of a health equity plan, beneficiary-level risk adjustments, and collection of beneficiary-reported demographic and social determinants of health (SDoH) information.

SDoH and the Revenue Cycle

Revenue cycle management (RCM) plays a vital role in achieving and maintaining health equity, , particularly given the links between SDoH and such outcomes as higher hospital readmissions and length of stay (LOS). SDoH has also been linked to an increased need for post-acute care, including Skilled Nursing Facilities (SNFs), long-term care (LTC), rehabilitation, and home health. What’s more, for organizations that disproportionately serve disadvantaged populations, these outcomes may result their being penalized by value-based payment programs.

Monitoring for and addressing the socioeconomic issues that have a demonstrated impact on health is imperative not only to closing the nation’s health equity gap, but also to healthcare organizations’ financial situations. For example, addressing food insecurity by linking patients to such programs as Meals on Wheels, Supplemental Nutrition Assistance Programs (SNAP) or food pantries has been shown to reduce malnutrition rates, improve short and long-term health outcomes, and reduce care costs.

In the case of SNAP – the primary source of nutrition assistance for more than 42 million low-income Americans – participants are more likely to report excellent or very good health than low-income non-participants. Further, after controlling for factors expected to affect spending on medical care, on average, low-income adults participating in SNAP incur nearly 25 percent less in medical care costs (~$1,400) in a year than low-income non-participants.

The Business Case for Involving RCM in Health Equity Strategies

The RCM Business Case

Between the financial impact of addressing SDoH and the emergence of new reimbursement models that emphasize health equity, there is a strong business case to be made for involving RCM in any comprehensive SDoH/health equity strategy. According to Kaiser Family Foundation, health disparities contribute $93 billion in excess medical care costs and $42 billion in lost productivity per year, along with additional economic losses due to premature deaths. Eliminating these inequities by 2050 would reduce the need for more than $150 billion in medical care.

Adding to the body of evidence supporting RCM involvement is the fact that reimbursement is closely linked to quality due to the use of outcome measures by CMS to determine a hospital’s overall quality. For example, lack of access to reliable transportation for basic health needs results in 41 percent more excess days in the hospital. Unemployment is linked to declining self-reported health status, increased mortality rates for males and females ages 16-64, quadruple rates of drug and substance abuse and dependence, and double the chances of being diagnosed with a mental disorder.

Coders and RCM professionals interact daily with data that is invaluable to inform health equity strategies. When that information is integrated into care plans, socioeconomic needs can be efficiently addressed, which ultimately drives better health and wellness outcomes and helps improve timely discharges and reduce LOS and readmission rates.

Download the White Paper

Learn more about leveraging revenue cycle management and the data it generates in achieving health equity, the business case for doing so, and how introduction of Z-codes is making it possible by downloading the full white paper today.

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AGS Health


AGS Health is more than a revenue cycle management company—we’re a strategic partner for growth. Our distinctive methodology blends award-winning services with intelligent automation and high-touch customer support to deliver peak end-to-end revenue cycle performance and an empowering patient financial experience.

We employ a team of 12,000 highly trained and college-educated RCM experts who directly support more than 150 customers spanning a variety of care settings and specialties, including nearly 50% of the 20 most prominent U.S. hospitals and 40% of the nation’s 10 largest health systems. Our thoughtfully crafted RCM solutions deliver measurable revenue growth and retention, enabling customers to achieve the revenue to realize their vision.