Rev Up Your Revenue Cycle Skills 2026 – Master the RCM Practice Challenge!

The distinction between gross revenue and net revenue is primarily based on how each is calculated and what they represent in the context of revenue management. Gross revenue refers to the total amount billed to patients or clients before any deductions. This means it includes all charges for services provided, regardless of whether those charges will ultimately be collected.

On the other hand, net revenue is the amount that is actually recognized as income after making necessary adjustments. These adjustments can include discounts, contractual allowances, and bad debt write-offs. Therefore, net revenue gives a clearer picture of the income that the organization can expect to receive, as it accounts for factors that can reduce the total billed amount.

The correct answer highlights this important relationship: gross revenue reflects the total billed amount without any deductions, while net revenue accounts for those necessary adjustments, offering a more accurate representation of the organization's financial performance. This understanding is crucial for effective revenue cycle management, as it impacts budgeting, forecasting, and overall financial reporting.