Free Tool — Revenue Cycle Analysis
Is your practice collecting everything it earns?
Most physician practice owners know their collections number. What they don't know is whether it's good — or whether slow AR, uncollected denials, and billing gaps are quietly costing them 10 to 20 percent of earned revenue every year.
Revenue cycle, answered
The measures that tell you whether a practice is collecting what it earned — and where the money goes when it does not.
What is a reasonable days-in-AR for a healthcare practice?
Practices with clean claims and disciplined follow-up generally sit in the low-to-mid double digits, while those with significant aged balances run well beyond that. The single figure matters less than the aging distribution behind it: an average pulled down by fast private-pay collections can conceal a large balance sitting past 90 days, which is where recovery odds fall sharply. Look at the percentage of AR over 90 days before trusting the average.
What is the difference between gross and net collection rate?
Gross collection rate compares payments to billed charges, which mostly measures how charges were set relative to contracted rates — it moves when the fee schedule moves, not when performance does. Net collection rate compares payments to what was actually collectible after contractual adjustments, and that is the number that measures whether the practice is capturing the revenue it is entitled to. A practice can raise its gross rate by lowering its charges while collecting no additional dollars.
Where does revenue actually leak in a practice?
Four places, usually in this order: services delivered but never billed, claims denied and never reworked, coding that understates the service actually performed, and write-offs taken as a matter of habit rather than contract. The first is the most damaging and the least visible, because unbilled work never appears in any report that starts from claims submitted.
How much do denials really cost?
More than the denied claim, because the cost is the rework. Each denial consumes staff time to research, correct, and resubmit, and a share are never reworked at all and simply age out. A practice measuring denial rate without measuring what proportion of denials get successfully reworked is seeing half the problem — and the unworked half is pure lost revenue on services already delivered.
What is the fastest way to improve collections?
Usually the front end rather than the back end: eligibility and benefit verification before the visit, and accurate demographic and insurance capture at registration. A large share of denials trace to information that was wrong or missing before the patient was ever seen, which makes them cheaper to prevent than to appeal. Chasing aged AR is necessary, but it treats the symptom.