What Are the Six Stages of the Revenue Cycle?

You can see patients all day and still struggle with cash flow. Claims get submitted, payments come in, and yet revenue never feels fully aligned with the work being done. Denials increase. Days in A/R stretch out. Small errors keep repeating. Most of the time, the issue is not one big mistake. It is a breakdown somewhere within the revenue cycle.

The six stages of the revenue cycle explain exactly how patient care turns into payment. When you understand how these stages connect, it becomes much easier to identify where revenue is slowing down and what needs to be fixed.

The Six Stages of the Revenue Cycle

The six stages of the revenue cycle are:

1. Patient Registration
2. Insurance Verification and Authorization
3. Medical Coding and Charge Entry
4. Claim Submission
5. Payment Posting
6. Accounts Receivable (A/R) Follow-Up and Denial Management

Each stage plays a critical role in maintaining steady cash flow and reducing revenue leakage. A breakdown in one stage often creates problems in the next.

Six Stages of the Revenue Cycle Explained

The six stages of the revenue cycle represent a controlled financial lifecycle that converts clinical services into collected revenue. Each stage serves as an operational checkpoint and a financial control point. Revenue cycle strength is not defined by activity volume. It is defined by accuracy, timing, accountability, and measurable performance across all six stages.

Stage 1: Patient Registration and Accurate Intake

Patient registration is the starting point of the revenue cycle. It is where the practice collects the patient’s personal and insurance information before care is provided. This step sets the foundation for everything that follows.

During registration, staff confirm:

• Patient identity and contact details
• Insurance plan information
• Policyholder details if different from the patient
• Coordination of benefits when there are multiple insurances
• Copay amounts and outstanding balances
• Signed financial and consent forms

This stage also sets financial expectations. Patients should understand what they may owe before services are provided.

If information is entered incorrectly, claims can be rejected for reasons such as wrong member ID, incorrect date of birth, or inactive coverage. These small errors can delay payment by weeks and create unnecessary rework.

Strong registration processes reduce preventable denials and improve overall revenue cycle performance.

Stage 2: Insurance Eligibility, Benefits, and Authorization Checks

After registration, the practice must confirm that the patient’s insurance will cover the services being provided. This step protects the practice from delivering services that may not be reimbursed.

This stage includes:

• Verifying active coverage on the date of service
• Checking deductible status and coinsurance amounts
• Reviewing service-specific coverage limits
• Confirming referral requirements
• Obtaining prior authorization when required

If eligibility is not verified correctly, claims may be denied for non-covered services. If authorization is missing, payment may be refused entirely.

Many revenue delays begin here. Proper verification reduces surprises for both the practice and the patient and helps collect the correct patient portion upfront.

Stage 3: Medical Coding and Charge Capture

After care is delivered, the provider’s documentation is reviewed and translated into standardized medical codes. These codes explain what service was performed and why it was medically necessary.

This step includes:

• Assigning accurate CPT and ICD-10 codes
• Applying appropriate modifiers
• Ensuring documentation supports the services billed
• Entering charges into the billing system promptly

Coding directly affects reimbursement. If codes are incorrect, the insurance company may reduce payment or deny the claim. If services are not captured properly, revenue is lost.

Timely charge entry is important. The longer it takes to enter charges, the longer it takes to submit the claim and receive payment.

Accurate coding protects both revenue and compliance.

Stage 4: Claim Submission and Quality Review

Once coding is complete, the claim is prepared and sent to the insurance company. Most claims go through a clearinghouse, which checks for technical errors before submission.

This stage includes:

• Reviewing claims for missing or incorrect information
• Running claim scrubbing edits
• Submitting claims within payer filing deadlines
• Monitoring rejections from the clearinghouse

If a claim is rejected before processing, it must be corrected and resubmitted. This increases administrative work and delays payment.

Stage 5: Payment Posting and Reconciliation

After the insurance company processes the claim, payment is sent along with details explaining how the claim was handled.

This stage includes:

• Posting insurance and patient payments
• Applying contractual adjustments
• Billing secondary insurance when applicable
• Transferring balances to patients
• Reviewing payments for accuracy

Payment posting is not just about recording money received. It also involves confirming that the amount paid matches the contracted rate.

If underpayments are not identified, revenue can slowly decline without clear explanation. Proper reconciliation ensures the practice is paid correctly.

Stage 6: Accounts Receivable (A/R) Follow-Up and Denial Management

If claims are unpaid or partially paid, they move into accounts receivable. This stage focuses on recovering outstanding balances.

This includes:

• Reviewing aging reports regularly
• Contacting insurance companies for unpaid claims
• Correcting and resubmitting claims
• Filing appeals for denied services
• Identifying repeated denial patterns

Without active follow-up, claims can remain unpaid for months. As days in A/R increase, cash flow becomes unstable.

Strong denial management does more than fix individual claims. It looks for patterns and corrects workflow issues so the same problems do not continue.

How the Six Stages Work Together?

The six stages of the revenue cycle are connected. Each stage depends on the one before it. A mistake early in the process often shows up later as a denial, a delay, or a missing payment.

Many practices focus on fixing problems at the end of the cycle, such as denials or overdue A/R. However, most of those problems begin much earlier. The key is to identify where the issue starts, not just where it appears.

How Registration Errors Increase Denial Rates

If the patient’s name, date of birth, insurance ID, or plan information is incorrect, the claim may not process successfully.

Even small intake errors can lead to:

• Eligibility denials
• Claim rejections for invalid member information
• Incorrect payer routing
• Patient balance confusion after adjudication

When registration is accurate, claims move forward smoothly. When it is not, denials increase and staff spend more time correcting avoidable issues.

How Coding Mistakes Affect Payment Posting

Coding affects not only claim approval but also reimbursement accuracy.

Incorrect codes or modifiers can cause:

• Lower reimbursement than expected
• Bundled payments when services should be paid separately
• Denials for medical necessity
• Incorrect patient responsibility amounts

When payment is posted, these issues may not be obvious unless payments are reviewed carefully. Without verification, underpayments and incorrect adjustments can reduce revenue over time.

How Weak A/R Follow-Up Hides Front-End Problems

Accounts receivable is where unresolved problems accumulate. If follow-up is inconsistent, claims remain unpaid and root causes are not identified.

This can hide issues such as:

• Repeated eligibility failures
• Missing authorizations
• Coding errors
• Claim submission rejections

If patterns are not tracked, the same mistakes repeat. A/R grows, denials increase, and internal process issues remain unresolved.

Why Fixing One Stage Alone Does Not Solve Revenue Issues

Improving one stage helps, but it rarely fixes everything. Revenue cycle problems often occur as a chain reaction.

For example:

• Inconsistent eligibility checks increase denial workload.
• Delayed charge entry slows claim submission and increases days in A/R.
• Poor payment review allows underpayments to go unnoticed.
• Weak follow-up prevents identification of recurring denial trends.

The strongest revenue cycles are those where every stage supports the next. When all six stages work together, practices experience fewer denials, faster payments, and more predictable cash flow.

When one or more stages consistently underperform, internal teams often spend more time reacting than preventing problems. Denials increase, follow-up becomes inconsistent, and reporting lacks clarity. In these situations, many practices begin considering outsourcing revenue cycle management and billing as a way to bring structure, accountability, and specialized expertise into the process without expanding internal staff.

Conclusion

If you want to improve revenue, start by identifying which of the six stages is underperforming.

Review denial reasons.
Monitor days in A/R.
Track charge entry timelines.
Audit posted payments against contracted rates.

Revenue issues are rarely random. They trace back to one of these six stages. When the correct stage is addressed, performance improves. When problems are guessed at, they continue.

A stable revenue cycle depends on consistent control, measurement, and accountability across all six stages.