Revenue cycle (RCM) gets described two ways, and both are useless. Either it is one undifferentiated blob called billing, or it is forty acronyms that only make sense if you already know what they mean.
Neither helps you decide where to spend money. So here is the map I use. The whole thing breaks into four jobs.
Job one: financial clearance
What benefits does this patient have, and what services do they have access to based on their insurance?
This is everything that has to be true before care is delivered. Verify eligibility and benefits. Find coverage the patient did not mention. Flag the services that need prior authorization or a PCP referral.
It is also where the first mistakes get made, and they are unglamorous mistakes. In the United States, if you walk into a doctor's office and put your insurance card down, roughly 40 percent of the time this step is not done correctly. The eligibility check goes to the wrong payer. The name is John instead of Jonathan. The date of birth is off by a digit.
Job two: clean claims
You submit a claim, and something happens.
That is genuinely how it feels from the inside. The goal is a clean claim out the door the first time, coded correctly, formatted correctly, with the right modifiers, sent to the right payer.
This is the job we do least. No coding engine, no scrubber, no submission engine, and no autonomous coding. We touch it only indirectly, by getting financial clearance right earlier and knowing what a payer's policy requires.
Job three: accounts receivable (AR) follow-up and denials
The claim went out and the money did not come back, or not all of it. Now somebody has to find out why and do something about it.
This is where we spend almost all of our effort, and I will come back to why.
Job four: reconciliation
A claim has been adjudicated as paid or denied. That outcome has to be written back to the systems of record: the electronic medical record on the clinical side, and the practice management system on the financial side. Then the cash has to be matched to what you were actually owed.
People assume reconciliation is clerical. It is not. Payers come back long after a check has been sent and cashed and take money back, and if your books say a claim is closed and the payer disagrees, the payer wins by default until somebody proves otherwise.
Why denials is the hardest job
Denials is the most expensive place for friction to occur.
Friction exists everywhere in the revenue cycle. But denials are the place where you have already done the work. The doctor has seen the patient. Care has been delivered. Someone paid for the provider's time, the room, the syringes. Denials sit exactly in the gap between care being delivered and payment being rendered.
That is why I care about it more than the rest. If you do not do the work, if you do not see the patient, you do not get paid, and who cares. That is how it should work. But if you see the patient, you care for them, you help them heal, and then you do not get paid on top of that, I find that very offensive.
The scale isn’t small. Kodiak Solutions put the initial denial rate at 11.81 percent for 2024, across more than 2,100 hospitals and roughly 300,000 physicians, up from 11.5 percent in 2023. Experian Health's State of Claims 2025 put it at 11.8 percent. Roughly one in eight claims gets denied on first submission.
Denials is not a task, it is a chain
The other reason this job is the hardest: it is four jobs inside a job.
Awareness. Knowing the denial happened at all. This breaks more often than people expect, especially at practices that have been through acquisitions, mergers, divestitures, or heavy turnover. You choose an electronic medical record for clinical reasons, correctly. It arrives attached to a practice management system that may not be best in class, and a clearinghouse you inherit. Those three systems were not designed to talk to each other. We have seen practices whose practice management system never receives rejected claims from the payer at all, which means nobody knows there is something sitting there that could be fixed in an afternoon.
Comprehension. Understanding why it happened. This is research. You go find information about the claim, the payer, and the care that was delivered, and you synthesize all of it into an actual answer. Every encounter is different, every payer is different, and the same payer in two different states can behave differently. For example, this denial was because of a member id mismatch, and Substrate's Eligibility Agent caught exactly why, and flagged the correct member ID to use:
Remediation. Turning that reason into the discrete steps that fix it: appeal, reconsideration, corrected claim, rebill, or send the claim to another payer. Most veteran billers, once they truly know why a claim was denied, can reason about the fix very quickly.
Follow-up. You formed a hypothesis about why the claim was not paid, you acted on it, and now you track whether that actually resulted in payment, all the way to the end.
Awareness and comprehension are the biggest problems, in my opinion. Not remediation. Becoming aware, and understanding the reason for the denial take the most time and have the most complexity. Once those jobs are done, veteran billers often know what to do right away.
Where Substrate’s agents sit on that map
Since people ask, here is where Substrate ARC lands against the four jobs. Seven AI agents, and they are deliberately not spread evenly.
Financial clearance: Eligibility verifies benefits and finds coverage before the visit. Policy knows what a given payer's rules actually require. For instance, Substrate’s Eligibility agent can flag common demographic errors like member id mismatches.
First-pass payment: our thinnest coverage, for the above reasons.
Denials and accounts receivable follow-up: the flagship, and it takes three agents working as a chain rather than one tool. Claim Status finds the denied claim. Policy reads the payer's own published policy. Appeals assembles and submits the appeal, including records requests, and tracks it to adjudication.
Reconciliation: Posting posts payments and works the exceptions. Credit Balance resolves patient credit balances inside state deadlines. Collections places self-pay accounts with compliance built in.
Eligibility and Policy are cross-cutting. They show up in more than one job, which is why pinning either to a single step on a diagram always feels wrong.
And the honest total: this covers roughly 60 to 70 percent of the denials workflow today, not all of it, and less than that across the four jobs as a whole.
Where to invest
If you are deciding where to put money or attention, the honest answer is that prevention and recovery are not competing priorities. Getting financial clearance right prevents denials you never have to work. Recovery gets you paid on the ones that happened anyway. You need both.
But start where the work is already done. There is nothing to argue about on a claim where the care was delivered, documented, and refused. That is money you have already earned.
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