Why Strong Revenue Cycle Management Is Critical to the Financial Health of Rheumatology Practices

Rheumatology practices occupy a uniquely complex space in healthcare. Unlike many specialties, rheumatology often combines long-term, high-acuity patient management with infusion-based therapies that are both clinically essential and financially high-risk. While infusions can be a powerful driver of revenue, they can just as easily become a silent drain on cash flow if not managed with precision. Sometimes it is the small decisions over time that cause the cash flow to tighten but by implementing best practices you can avoid the common downfalls and future challenges that practices face. If you are currently in this situation where you are behind on payments to your infusion supplier, then there are ways to implement the best practices to come out of these challenges and continue to run a successful practice, but it doesn’t happen overnight.

In today’s environment, where drug costs fluctuate, payer policies tighten, and patient complexity continues to rise, successful rheumatology practices must treat infusion revenue cycle management (RCM) as a strategic priority, not a back-office function. The entire Rheumatology practice needs to be involved in a pro-active way to ensure correct approval process, correct claim submission, correct follow-up of claims and most importantly correct allocation of payments back to the infusion supplier. Here are a few key components to think about regarding Revenue Cycle Management for Rheumatology practices:

Understanding the True Profit Margin on Infusions

One of the most common financial blind spots in rheumatology practices is assuming that infusions are profitable by default. In reality, the margin on infused biologics is often thin, variable, and highly sensitive to changes in drug acquisition costs.

Biologic medication pricing can change quarterly, sometimes without much notice. If a practice does not routinely reconcile drug acquisition cost, reimbursement rates by payer, and administration and staffing costs, leadership may be making decisions based on outdated or incomplete information.

Knowing the true profit margin on each infused medication requires ongoing monitoring. Without this discipline, practices risk continuing services that appear profitable on paper but are eroding cash flow in practice.

Applying Infusion Payments Correctly: Protecting Cash Flow

Another critical, and frequently misunderstood, aspect of infusion RCM is how payments are applied once they are received. Infusion medications are often purchased under extended payment terms from manufacturers or specialty distributors.

A common and dangerous mistake is using infusion payments to fund general practice expenses or partner distributions before paying the drug supplier since you often have 60 or 90 days to pay them. Best practice dictates that payments received for infusions should be applied directly to the cost of the infusion medication, not absorbed into general operating revenue. The best mechanism to do this is what we call “Profit Center Accounting” which separates out the Infusion related charges, collections, and adjustments onto a separate column. Each month, the practice owners and Practice Manager can see exactly what was received for the infusions vs patient E&M vs in-office procedures and apply the payments correctly. The “Gold Standard” is to pay 100% of the receipts received from infusions to the medication provider until your outstanding Accounts Payable for the supplier is at or less than 14 days. The practice should be able to “live” off of the rest of the receipts including payment to providers and office staff. If the remaining receipts do not support the office expenses, then we have to dive deeper into office overhead.

Evaluating Whether Complex Cases Are Financially Sustainable

Complex rheumatology cases often require extensive prior authorizations, appeals, care coordination, and ongoing monitoring. While clinically appropriate, these efforts must also be financially justified. The team required to manage these patients depends on several factors including location, patient volume, team skill set and treatment patterns of the providers. Utilizing mid-level providers to help manage these patients may help the physician focus on establishing the plan for new patients and keeping a focus on the larger treatment goals while the other team members respond to day-to-day patient requests and questions. Involving additional mid-level providers generally allows a practice to increase the contribution margin to offset overhead costs. Another great aspect is increasing hours of operations, including weekend visits, if needed to ensure the community is being cared for in the most efficient way possible.

Practices must evaluate receipts per patient, not just gross charges, to determine whether reimbursement adequately reflects the time, energy, and staffing required. Ignoring this analysis risks burnout, staff turnover, and financial instability. When you start analyzing these KPI’s you may determine that certain payers are not reimbursing enough to justify the level of care required for the patient. In this case, the practice can make the appropriate decision based on a per-payer basis while being aware of opportunities to optimize with additional mid-level providers on the payers with lower reimbursements.

Infusion RCM as a Leadership Responsibility

Revenue cycle management for infusions is not solely a billing department issue. It requires alignment between clinical leadership, operations, and revenue cycle teams.

Strong rheumatology practices treat infusion RCM as a core operational competency,mreviewed regularly, measured objectively, and adjusted proactively.

Final Thoughts

Infusions are both a clinical cornerstone and a financial risk in rheumatology. Practices that thrive are those that pair excellent care with disciplined financial oversight.

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