A Complete Breakdown of the 13 Steps of Revenue Cycle Management

A smooth revenue cycle management (RCM) process isn’t just nice to have—it’s a must for keeping your healthcare organization financially stable and running efficiently. From claims processing to billing and payment collection, RCM ensures you get paid on time while minimizing costly errors. Without a well-structured system in place, you’re looking at claim denials, cash flow headaches, and extra administrative work that no one has time for.

Understanding the 13 steps of revenue cycle management is important for optimizing revenue collection and reducing financial inefficiencies. Healthcare organizations that streamline their RCM processes benefit from faster reimbursements, lower claim rejection rates, and improved revenue integrity.

The U.S. revenue cycle management market was valued at USD 172.24 billion in 2024 and is projected to grow at a CAGR of 10.1% from 2025 to 2030, highlighting the increasing demand for RCM automation services and AI-driven financial workflows.

This guide breaks down the RCM cycle steps, showing how each stage impacts cash flow, compliance, and overall financial performance.

The 13 Key Steps of Revenue Cycle Management

A well-structured RCM process ensures timely reimbursements, fewer claim denials, and better cash flow. These 13 steps of revenue cycle management streamline billing, claims processing, and payment collection, optimizing financial performance. Understanding these RCM cycle steps helps providers improve efficiency and compliance.

1. Pre-Registration

Pre-registration is the first step in the revenue cycle process, where healthcare providers collect basic patient details before their visit. This includes name, contact information, insurance coverage, and medical history. Gathering this information early allows clinicians to confirm insurance eligibility, predict expenses, and avoid billing difficulties.

Accurate pre-registration helps avoid claim rejections, billing errors, and unnecessary delays, making the entire RCM process smoother. It also ensures patients know their financial responsibilities upfront, reducing confusion and payment issues later.

Best Practices

• Offer mobile/web pre-reg with e-sign.
• Run real-time eligibility and coverage discovery.
• Collect digital consent and ABNs when needed.
• Verify demographics against USPS/NCOA to cut keystroke errors.
• Set reminders for missing insurance info 24 hours pre-visit.

2. Registration

Registration happens when a patient arrives for their visit. It involves confirming personal details, insurance information, and signing consent forms. This step is crucial for accurate record-keeping and ensures that billing and claims processing run smoothly.

Mistakes in registration can cause claim denials, billing delays, and miscommunication between providers and payors. Verifying all details at this stage helps prevent errors, reduce administrative hassles, and ensure faster reimbursements in the RCM process.

Best Practices

• Re-verify ID, insurance, and coordination of benefits at check-in.
• Standardize name formats to avoid duplicate MRNs.
• Capture referral and authorization numbers at the desk.
• Route self-pay to financial counseling early.
• Sync EHR and practice management in real time.

Related Read: A Guide to Healthcare Revenue Cycle Management

3. Insurance Verification

Insurance verification ensures a patient’s medical services are covered by their insurance provider. This step confirms policy status, co-pays, deductibles, and pre-authorization requirements to avoid billing issues later.

Claims may be denied, leading to unexpected patient costs and financial losses for providers without proper verification. A well-managed RCM cycle step helps prevent claim rejections, reduce payment delays, and ensure smooth reimbursement processing.

Best Practices

• Check plan, network status, copay, deductible, OOP max, and exclusions.
• Automate prior auth checks for imaging, specialty meds, and procedures.
• Surface estimated patient responsibility before service.
• Log payer calls and reference numbers.
• Re-verify for recurring services monthly.

4. Charge Capture

Charge capture ensures that all medical services and procedures provided during a patient’s visit are properly documented for billing. This step is essential for accurate reimbursement and helps providers receive full payment for services rendered.

Incomplete or incorrect charge capture can result in revenue loss, claim underpayments, and billing discrepancies, affecting the RCM process. Proper documentation reduces errors, improves financial accuracy, and ensures providers get paid correctly.

Best Practices

• Use templated encounter forms tied to specialties.
• Lock same-day charge entry with reminder nudges.
• Audit missing charges by appointment type and provider.
• Map supplies and implants to revenue codes.
• Reconcile scheduled services vs. captured charges daily.

5. Medical Coding

Medical coding solutions translate diagnoses, procedures, and treatments into standardized ICD-10, CPT, and HCPCS codes for billing. This step ensures that claims comply with payer guidelines, reducing the chances of denials and payment delays.

Errors in medical coding can lead to delayed reimbursements, compliance issues, and revenue loss in the RCM steps. Accurate coding improves claim acceptance rates, speeds up payment processing, and ensures financial stability for healthcare providers.

Best Practices

• Run NCCI edits, LCD/NCD checks, and payer-specific rules pre-bill.
• Dual-pass coder QA for new providers and high-risk DRGs/CPTs.
• Educate clinicians on documentation gaps that trigger downcoding.
• Monitor top 20 denial CARC/RARC codes and address root causes.
• Target ≥95% coding accuracy with monthly scorecards.

6. Claim Submission

Submitting claims to insurance providers is important in the RCM process, ensuring that healthcare services are billed and reimbursed correctly. Claims must be filed accurately and within deadlines to prevent denials and payment delays.

Claim processing automation in claim submission speeds up processing, reduces administrative workload, and improves reimbursement timelines. Proper claim management ensures fewer errors, faster approvals, and optimized cash flow for healthcare providers.

Best Practices

• Scrub for formatting, coverage, place-of-service, modifiers, and missing attachments.
• Submit electronically with 275 attachments when available.
• Batch by payer cutoff times to speed EFT.
• Track acceptance, rejection, and edit loops automatically.
• Resubmit cleared rejections within 24–48 hours.

7. Adjudication

The adjudication process is where insurance companies review claims to determine coverage eligibility, reimbursement amounts, or reasons for denial. This step ensures that only valid and properly documented claims are approved for payment.

To avoid delays and rejections in the RCM cycle steps, providers must ensure claims meet all documentation and coding requirements. Proper adjudication management reduces denials, speeds up payments, and ensures accurate reimbursements for healthcare services.

Best Practices

• Monitor payer portals and 835s for status changes.
• Compare allowed amounts to contract terms; flag variances.
• Auto-route pended claims for medical records.
• Escalate underpayments with contract pages attached.
• Maintain an appeals playbook per payer and denial reason.

8. Payment Posting

Payment posting records payments from insurers and patients into the financial system, ensuring accurate revenue tracking. This step helps reconcile expected versus received payments, providing clear financial transparency for healthcare providers.

Errors in payment posting can cause billing disputes, reporting inaccuracies, and financial imbalances. Proper reconciliation and automated posting reduce discrepancies, improve cash flow management, and ensure smooth revenue cycle operations.

Best Practices

• Auto-post 835s; queue exceptions only.
• Post zero-pay remits to expose denial trends.
• Reconcile EFT totals to daily deposits.
• Split patient vs. payer balances cleanly after remit.
• Produce a daily variance report for finance.

9. Denial Management

Denial management involves analyzing and correcting claim denials to ensure timely reimbursements. Providers must identify trends, fix errors, and resubmit claims promptly to minimize revenue loss.

A proactive RCM step includes appeal strategies, automated tracking, and payer negotiations to reduce future denials. Effective denial management improves cash flow, accelerates payments, and strengthens financial stability for healthcare providers.

Best Practices

• Classify by type: clinical, technical, eligibility, authorization, timely filing.
• Work high-dollar and near-timely-limit denials first.
• Create editable appeal templates with evidence checklists.
• Close the loop with upstream owners (front desk, coding, ordering MD).
• Publish a monthly denial heatmap and action plan.

10. Accounts Receivable (A/R) Follow-Up

A/R follow-up ensures that unpaid claims and patient balances are resolved immediately, preventing revenue loss. Regular follow-ups with payers and patients help reduce payment delays and improve cash flow stability.

Inefficient A/R management leads to rising debt, weakening financial stability, and disrupting the RCM process. Proactive A/R tracking and automation ensure faster collections, fewer write-offs, and a healthier revenue cycle.

Best Practices

• Work A/R by age and balance; prioritize 0–30 and 31–60 day buckets.
• Keep call notes and payer reference IDs in the account.
• Use SMS and email nudges for patients before statements.
• Trigger supervisor review on no-response after 3 touches.
• Set write-off thresholds with compliance sign-off.

11. Patient Billing

Patient billing involves generating accurate statements for any remaining balances after insurance payments. Transparent billing practices and clear communication help patients understand their financial responsibilities.

A patient-friendly billing approach encourages timely payments, reducing disputes and collection delays. Effective billing strategies, including digital payment options and automated reminders, enhance revenue collection and patient satisfaction.

Best Practices

• Send plain-language statements with itemized services.
• Offer text-to-pay and patient portals.
• Provide cost estimates and a billing FAQ link.
• Consolidate family accounts when possible.
• Route hardship cases to payment plans or charity care.

12. Payment Collection

Payment collection involves managing patient payments through online portals, payment plans, and automated reminders. Offering multiple payments is easier for patients to settle balances on time.

A structured collection process improves revenue flow, reduces accounts receivable delays, and ensures financial stability in the RCM cycle. Automating billing reminders and payment tracking enhances collection rates and minimizes outstanding balances.

Best Practices

• Present multiple options: card, ACH, HSA/FSA, wallets.
• Offer interest-free plans for 3–12 months.
• Collect deposits for high-cost procedures.
• Send automated reminders at 3, 10, and 20 days.
• Avoid aggressive language; emphasize transparency.

13. Reporting & Analytics

Generating revenue cycle reports helps assess the efficiency of the RCM process by tracking claim approvals, denial patterns, and revenue trends. These insights allow providers to identify inefficiencies and improve financial workflows.

AI-driven analytics in the RCM cycle procedures enhance decision-making and revenue forecasting, ensuring optimized cash flow and financial stability. Real-time data tracking helps providers streamline billing, reduce denials, and maximize reimbursements.

Best Practices

• Standardize KPI definitions across finance and operations.
• Segment by payer, location, and provider for root-cause clarity.
• Set alerts when metrics breach thresholds.
• Review denial CARCs, top coding edits, and underpayments monthly.
• Publish a simple KPI scorecard for leadership.

Related read: Comprehensive Guide to the RCM Process in Healthcare

RCM KPIs: Targets and Actions

Monitoring Cadence

• Weekly: First-pass rate, denial spikes by payer, top edit failures.
• Monthly: A/R aging distribution, underpayment variance, net collection by payer and location.
• Quarterly: Contract compliance, coding accuracy audits, pre-auth turnaround times.

Mini Playbook

• Denial rate jumps >2 pts: Pull last 14 days of CARCs, isolate payer/policy change, update scrubber rules, retrain staff.
• Days in A/R rises >5 days: Expand staff hours on 31–60 bucket, create payer-specific call blocks, escalate stalled accounts.
• Underpayment variance >3%: Sample EOBs, attach contract language, initiate payer disputes with documented interest where applicable.

How Mindbowser Can Help You With Revenue Cycle Management

Revenue cycle management comes with challenges that impact billing efficiency and financial stability. High denial rates delay reimbursements as manual claim reviews often miss documentation errors and eligibility issues, leading to frequent rejections. Slow patient payments strain cash flow due to a lack of automation in billing, making it difficult for patients to track and settle bills on time.

Manual coding errors in ICD and CPT codes increase claim denials, administrative workload, and revenue losses. Addressing these RCM cycle steps with AI-driven automation is key to improving billing accuracy, accelerating payments, and optimizing financial performance.

Mindbowser automates revenue cycle management with AI-powered solutions, eliminating billing inefficiencies and reducing claim denials. Our automated coding validation, digital self-pay portals, and predictive analytics ensure error-free billing and faster approvals. With HIPAA-compliant security and seamless EHR integration, healthcare providers can streamline financial workflows, improve cash flow, and reduce administrative burdens, making revenue cycle automation more efficient and scalable.

We Implemented EHR Integration and automation for childbirth management platform achieving $23,500 average cost savings!

A sneak into how we streamline data processes, enhance efficiency, and achieve substantial cost savings for the client.

Read More