Revenue is the result. These KPIs explain it. Checked every month, they show where claims are getting stuck, where money is being lost and whether the changes you make are working.
The core four
| KPI | What it tells you | Formula | Common target |
|---|---|---|---|
| Net collection rate | How much of what you are owed you collect | Payments ÷ (charges − contractual adjustments) | 95% or higher |
| Days in A/R | How long it takes to get paid | Total A/R ÷ average daily charges | Under 40 days |
| A/R over 90 days | How much of your A/R is at risk | A/R over 90 days ÷ total A/R | Under 10–15% |
| Denial rate | How often claims are refused the first time | Claims denied ÷ claims submitted | Under 5% |
These are common industry benchmarks. Agree targets for your practice with your billing team.
Four more worth tracking
- Clean claim rate: claims accepted on first submission ÷ claims submitted. Shows how much rework your claims need.
- Charge lag: average days from date of service to claim submission. Long lags point to documentation or coding backlogs.
- Patient collection rate: patient payments ÷ patient responsibility billed. Shows whether patient balances are coming in.
- Cost to collect: total revenue cycle costs ÷ total collections. Shows what each dollar collected costs you.
Read them together
One number on its own can mislead. Patterns across them are more useful:
- Denial rate and days in A/R both rising: denials are not being worked fast enough.
- Days in A/R steady, A/R over 90 growing: new claims are worked while older ones are ignored.
- Net collection rate falling with a steady denial rate: look at underpayments, write-offs and patient balances.
- Charge lag rising: look at documentation and coding backlogs before blaming the billing team.
Break them down
Averages hide problems. Look at each KPI by:
- Payer, to find the ones that pay slowly or deny more.
- Provider, to spot documentation or coding patterns.
- Location, if you have more than one.
- Denial reason, to see which fixes would pay off most.
Build a monthly routine
- Pull the same reports on the same day each month.
- Compare with last month and with the same month last year, since many practices have seasonal patterns.
- Look at the three-month trend rather than a single month.
- Pick one or two problems, and give each an owner and a fix.
- Check next month whether the fix worked.
Keep the definitions consistent
Small differences in how a KPI is calculated change the result. Decide whether your collection rate excludes contractual adjustments, whether the denial rate counts claims or dollars, and which charges go into days in A/R. Write the definitions down and keep them. Changing them partway through a year makes trends meaningless.
Ace tracks these KPIs in regular reports for the practices we support through revenue cycle management, with clear next actions each month.