In most industries a company sends an invoice and gets paid. In US healthcare a provider records care in clinical language, translates it into thousands of standard codes, prices it against a list price nobody pays, submits it electronically through a clearinghouse to a payer with its own rules, and then waits, appeals, rebills and chases the patient for the rest. That chain is the revenue cycle, and it costs the US system hundreds of billions of dollars a year in administration. This section explains the code sets (CPT, HCPCS, ICD-10, DRGs, APCs), how claims move, why denials and prior authorization have become a battleground between providers and payers, how hospitals and practices measure and outsource the work, and what the February 2024 Change Healthcare cyberattack showed about how concentrated this plumbing has become. A worked example traces one stylized hospital's charges to cash; a case study covers the Change Healthcare attack.
What the study covers
- 1Overview: why getting paid is a business in itself
- 2Mechanics: the code sets
- 3Mechanics: how payment is calculated
- 4Mechanics: the claim lifecycle
- 5Denials and prior authorization: the battleground
- 6Patient financial responsibility
- 7Measuring a revenue cycle
- 8Who does the work: in-house, software and outsourcing
- 9Automation and AI in the revenue cycle
- 10Beyond the US
- 11Key numbers
- 12Landmark companies and cases
- 13Pitfalls
- 14How an expert thinks about it
- 15Glossary
Technical exhibits
Worked examples, checklists and case studies included with this study.
Hospital Charges to Cash Worked Example
A stylized community hospital: gross charges → contractual allowances → denials → patient balances → net cash, days in A/R, cost to collect, and sensitivities including a 30-day clearinghouse outage (computed in Python)
Change Healthcare Cyberattack Case Study
The 2024 ransomware attack on the largest US claims clearinghouse: background, timeline, costs, policy response and lessons for concentration risk