To do a revenue cycle audit for a medical practice, pull 12 months of claims, payments, and scheduling data, then follow the money through nine stages: registration, eligibility and authorization, charge capture, coding, claim submission, denials, payment posting, A/R follow-up, and patient collections. At each stage you compare what happened with a benchmark. Commonly cited targets are a clean claim rate of 95 percent or better, an initial denial rate at or under the 5 percent MGMA uses for better-performing practices, days in A/R under 40, and A/R older than 120 days held to a small share of the total. Then you put a dollar value on every gap, separate what’s still recoverable from what’s already lost, and rank the fixes by what they’re worth. This guide covers each step, what audits commonly find, and what the finished report should contain.
A revenue cycle audit is a structured review of how a practice gets paid, from the moment a patient is scheduled to the moment the last dollar is collected. Its purpose is to find where revenue is being lost or delayed and to put a number on it, so the practice knows which problems are worth fixing first.
It’s different from a coding compliance audit, which focuses on whether services were coded correctly for regulatory purposes. A revenue cycle audit looks at coding too, but its main question is financial: is the practice collecting everything it has earned, and how quickly?
What an audit reviews
A thorough audit usually follows the claim through every stage:
- Scheduling and registration, including whether patient demographics and insurance details are captured correctly
- Eligibility verification and prior authorization, and whether they happen before the visit
- Charge capture, comparing what was scheduled and documented with what was billed
- Coding accuracy, including modifiers and whether diagnosis codes support the services billed
- Claim submission, including rejection rates at the clearinghouse and how quickly claims go out
- Denials, broken down by payer, reason, and provider
- Payment posting, including whether payments match contracted rates
- A/R follow-up, including aging, days in A/R, and how old claims are being worked
- Patient collections, including statements and balances owed after insurance
How to do the audit, step by step
- Gather the data. You’ll need 12 months of claims and remittances from your practice management system, the clearinghouse rejection reports, the A/R aging report by payer, the appointment schedule, and your payer fee schedules. If any of these are hard to produce, note that as a finding in itself.
- Reconcile visits with charges. Compare the appointment schedule and signed encounters with the claims that were actually created. Every documented visit without a claim is unbilled revenue, and this step usually takes the longest.
- Check claim quality. Measure the clearinghouse rejection rate and the clean claim rate, meaning claims paid on first submission. A commonly cited target is 95 percent clean.
- Analyze denials. Group initial denials by payer, reason code, provider, and location, and compare the rate with MGMA’s 5 percent benchmark for better-performing practices. Count how many denials were corrected, appealed, or written off, and how many simply expired.
- Measure the A/R. Calculate days in A/R by dividing total A/R by average daily charges, and compare it with the under-40 benchmark. Then look at the share of A/R older than 90 and 120 days, by payer.
- Test payments against contracts. Take your 20 highest-volume codes and compare what each payer actually paid with the contracted rate. Underpayments that appear consistently are a contract or posting problem, not a one-off.
- Review patient balances. Check what’s collected at the time of service, how statements go out, and how much patient A/R is older than 90 days.
- Value and rank every finding. Estimate the dollars behind each gap, mark which are still recoverable within payer deadlines, and order the fixes by what they’re worth and how fast they can be done.
What audits commonly uncover
Every practice is different, but some findings come up again and again:
- Encounters that were documented but never billed
- Coding errors that lead to denials or to services being paid at a lower rate than they should be
- Denials that were never reworked and are approaching or past their deadlines
- Large balances in the over-90 and over-120 day A/R buckets
- Payments below contracted rates that no one flagged
- Eligibility and authorization gaps that cause preventable denials
- Workflows that depend on one person, so work stops when that person is out
In practices that have been struggling for a while, it’s common for an audit to find several of these at once, with a meaningful amount of recoverable revenue tied up in old claims.
What you should get at the end
A useful audit ends with more than a list of problems. It should put an estimated dollar value on each issue, separate what can still be recovered from what’s already lost, and lay out a prioritized plan. The fixes that recover the most money or stop the largest ongoing leak should come first.
How often to do one
Many practices benefit from a full review once a year, with key numbers like denial rate and days in A/R tracked every month in between. An audit is especially worth doing when cash flow drops without an obvious reason, after a change in billing staff or software, or before deciding whether to outsource billing.
Seeing an audit in practice
Elevate has published two anonymized white papers that walk through real audits, one for an urgent care practice with $1.45M in aging A/R and one for a multi-location gastroenterology practice. They show what the audits found, what was driving the losses, and the plan to recover the revenue.