Reviewed by Roey Hine
Key Takeaways
- A medical billing company handles claims submission, coding, and payment posting.
- A revenue cycle management company manages billing plus credentialing, patient billing, reporting, and often the practice management software itself.
- Medical billing is one function inside the broader revenue cycle, not a separate category.
- The two terms are used interchangeably across the industry, including on many billing companies’ own websites.
- The label a company uses matters less than confirming exactly which services are included before signing a contract.
Practices searching for a billing partner run into both terms constantly, often on the same company’s website. The distinction is real, though it’s a difference in scope of service rather than a strict industry line every vendor follows the same way.
What a Medical Billing Company Does
A medical billing company handles the claims-and-payment side of a practice’s revenue: submitting claims, applying the correct codes, posting payments, and following up on straightforward denials. It’s the core transactional work of turning a rendered service into a paid claim.
Typical scope includes:
- Claims submission and scrubbing before payer submission
- Medical coding and code selection support
- Payment posting and reconciliation
- First-level denial follow-up and resubmission
What a Revenue Cycle Management Company Does
A revenue cycle management company does everything a medical billing company does, plus the administrative functions that sit upstream and downstream of the claim itself and directly affect how much of it actually gets collected.
That broader scope typically adds:
- Credentialing and payer enrollment, including revalidation tracking
- Patient billing, statements, and collections
- Financial reporting and analytics on denials, days in A/R, and collection trends
- Practice management software or a technology platform the billing runs on
Why the Terms Get Used Interchangeably
A company that handles billing well tends to end up handling credentialing and reporting too, because a lapsed payer enrollment or a blind spot in denial trends shows up directly in collections. The two functions are hard to separate operationally, so many companies, PGM included, describe themselves with both terms depending on which one a given audience is searching for.
What that means for a practice evaluating vendors: don’t assume the label tells you what’s included. A company calling itself a medical billing company might still handle credentialing and reporting, and a self-described RCM company might charge extra for services you assumed were bundled in.
How to Tell Which One You’re Actually Getting
Ask directly, regardless of which term the company uses for itself. The contract determines what’s actually included, and that’s what to verify before signing. For a fuller list of what to evaluate in a billing partner, see PGM’s guide to revenue cycle management outsourcing.
- Is credentialing and payer enrollment included, or billed separately?
- Does the service include patient billing and collections, or only insurance claims?
- What reporting do you receive, and how often, on denials and days in A/R?
- Is practice management software included, or do you need your own system?
PGM operates as a full revenue cycle management company, handling credentialing, reporting, and technology alongside billing and coding for physician practices and laboratories nationwide. If you’re evaluating vendors and want a fuller checklist beyond the RCM-versus-billing distinction, see “What to Look for in a Medical Billing Company.”
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Frequently Asked Questions About Medical Billing and Revenue Cycle Management Companies
Is PGM a medical billing company or a revenue cycle management company?
Both. PGM handles the full revenue cycle, including credentialing, reporting, and technology, but uses “medical billing company” in most of its own marketing because that’s the more commonly searched term.
Does a revenue cycle management company cost more than a medical billing company?
Usually, because the range of services is wider. Cost tracks what’s actually included, not which name a company uses, so two vendors charging similar rates can cover very different amounts of work.
Does my practice need a full RCM company, or just billing?
It depends on what your practice already handles in-house. A practice with a strong internal credentialing and reporting process may only need claims and coding support. One without that infrastructure usually benefits more from full RCM. For more on what the revenue cycle actually includes, see “What is revenue cycle management?”
What should be in a billing contract regardless of which term the vendor uses?
A clear list of included services, pricing tied to that specific list, reporting frequency, and whether credentialing and patient billing are bundled in or billed as add-ons. The contract should spell out what’s covered explicitly rather than relying on the company’s self-description.