You can't fix what you don't measure. Key performance indicators (KPIs) show whether your revenue cycle is healthy or whether money is leaking out between the exam room and the bank. The good news is that a handful of metrics tell you most of what you need to know.
Below are seven KPIs every practice should review at least monthly, along with the benchmarks commonly used across the industry. Targets vary by specialty and payer mix, so treat them as a starting point rather than a hard rule.
1. Days in Accounts Receivable (A/R)
What it measures: the average number of days it takes to get paid after a service is provided.
How to calculate it: total A/R ÷ average daily gross charges (usually based on the last three to six months).
Common target: under 40 days, with many well-run practices staying between 30 and 40.
Rising days in A/R is often the first sign of trouble — slow claim submission, unworked denials or weak follow-up.
2. Percentage of A/R Over 90 Days
What it measures: how much of your outstanding money is old. The older a claim gets, the less likely it is to be collected.
Common target: under 15–20% of total A/R.
3. Clean Claim Rate
What it measures: the share of claims accepted and processed on first submission without edits or rework.
How to calculate it: claims accepted on first pass ÷ total claims submitted × 100.
Common target: 95% or higher. A low clean claim rate usually points to registration, eligibility or coding errors that a good claim scrubber should catch.
4. Denial Rate
What it measures: the percentage of claims denied by payers.
Common target: 5% or lower. Just as important as the rate is the reason: tracking denials by reason code shows whether the problem is eligibility, authorization, coding or documentation.
5. Net Collection Rate
What it measures: how much of the money you're contractually owed you actually collect.
How to calculate it: payments ÷ (charges − contractual adjustments) × 100.
Common target: 95% or higher. This is often considered the single best indicator of billing performance, because it shows how much collectible revenue is being lost.
6. First-Pass Resolution Rate
What it measures: the percentage of claims paid in full on the first submission. It overlaps with clean claim rate but focuses on payment, not just acceptance.
Common target: 90% or higher.
7. Cost to Collect
What it measures: what you spend to collect each dollar — staff, software, clearinghouse fees and outsourcing costs — as a percentage of total collections.
Comparing this number to the cost of an outsourced billing partner is one of the clearest ways to judge whether in-house billing still makes sense.
Quick reference
| KPI | Common target |
|---|---|
| Days in A/R | Under 40 days |
| A/R over 90 days | Under 15–20% |
| Clean claim rate | 95%+ |
| Denial rate | 5% or lower |
| Net collection rate | 95%+ |
| First-pass resolution rate | 90%+ |
Turning KPIs into action
- Review monthly, trend quarterly. One bad month can be noise; three in a row is a pattern.
- Look at the payer level. A practice-wide denial rate can hide one payer that denies far more than the rest.
- Fix causes, not symptoms. If eligibility denials are high, the fix is at the front desk, not in the appeals queue.
At Provider Concerns Solutions, every client receives monthly reporting on these KPIs, so you always know where your revenue cycle stands. Request a free billing review to see how your numbers compare.
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