In today’s healthcare environment, running a successful medical practice requires more than seeing patients and submitting claims. Financial stability depends on understanding what’s happening behind the scenes in your revenue cycle — and that starts with tracking the right Key Performance Indicators (KPIs).
Too often, practices focus only on total collections or bank deposits. While those numbers matter, they don’t tell the full story. Without visibility into revenue cycle KPIs, issues like denials, delays, and underpayments can quietly erode profitability.
At JARALL Medical Management, we help practices take control of their revenue by tracking the metrics that matter most. Below are the key revenue cycle KPIs every practice should monitor — and why they are critical to long-term success.
Why Revenue Cycle KPIs Matter
Revenue cycle KPIs provide measurable insight into how efficiently a practice converts services rendered into cash collected. These metrics reveal where revenue is flowing smoothly — and where it’s getting stuck.
When KPIs are not tracked consistently, practices often experience:
• Rising denial rates without knowing why
• Delayed payments that disrupt cash flow
• Missed revenue from unworked claims
• Increased audit and compliance risk
• Difficulty forecasting financial performance
Tracking the right KPIs allows practices to move from reactive problem-solving to proactive revenue management.
Net Collection Rate (NCR)
Net Collection Rate measures how much of the money a practice is allowed to collect is actually collected. It is one of the most important indicators of revenue cycle health.
A healthy Net Collection Rate typically falls between 95% and 99%.
A low NCR may indicate:
• Denials not being appealed
• Underpayments going unnoticed
• Poor contract management
• Inefficient follow-up processes
Tracking this KPI helps practices identify revenue leakage that may not be visible through gross collections alone.
Days in Accounts Receivable (A/R)
Days in A/R measures how long it takes, on average, for a practice to receive payment after services are rendered. This KPI directly impacts cash flow.
Most well-performing practices aim for 30–40 days or fewer in A/R.
Higher A/R days often point to:
• Delays in claim submission
• Ineffective payer follow-up
• High volumes of pending or denied claims
• Incomplete documentation
Monitoring this metric ensures payments are arriving on time and highlights bottlenecks that need immediate attention.
Denial Rate
Denial Rate tracks the percentage of claims denied by payers. While some denials are unavoidable, consistently high denial rates signal systemic issues.
A strong revenue cycle typically maintains a denial rate below 5%.
Common causes of elevated denial rates include:
• Documentation deficiencies
• Coding errors
• Eligibility issues
• Missed payer-specific requirements
Tracking denial rates — especially by payer, provider, and denial reason — allows practices to correct recurring problems before they escalate.
First-Pass Resolution Rate
First-Pass Resolution Rate measures how many claims are paid correctly on the first submission without requiring rework.
A high first-pass rate indicates:
• Accurate coding
• Strong documentation
• Clean claim submission processes
Low first-pass resolution increases administrative costs, delays revenue, and places strain on staff. Improving this KPI reduces rework and accelerates cash flow.
Charge Lag
Charge lag measures the time between when a service is provided and when the charge is entered and submitted to the payer.
Best practice benchmarks aim for 1–3 days or less.
Long charge lags can result in:
• Missed filing deadlines
• Delayed payments
• Lost or forgotten charges
Tracking charge lag ensures services don’t get stuck in the EHR or lost before billing begins.
Clean Claim Rate
Clean Claim Rate reflects the percentage of claims submitted without errors that require correction or resubmission.
A high clean claim rate reduces:
• Denials
• Payment delays
• Administrative rework
Low clean claim rates often stem from documentation gaps, coding inconsistencies, or outdated payer rules. Monitoring this KPI helps practices maintain submission accuracy and compliance.
A/R Aging Breakdown
Rather than only tracking total A/R, practices should monitor A/R aging buckets, such as:
• 0–30 days
• 31–60 days
• 61–90 days
• 90+ days
High balances in older aging buckets indicate claims that are at risk of becoming uncollectible. Regular review ensures older claims are prioritized and resolved before revenue is lost.
Cost to Collect
Cost to Collect measures how much it costs a practice to collect each dollar of revenue. This includes staff time, billing resources, and technology expenses.
When this KPI is too high, it may signal:
• Inefficient billing workflows
• Excessive rework from denials
• Overextended internal staff
Optimizing this metric improves profitability without increasing patient volume.
Why Tracking KPIs Alone Isn’t Enough
While tracking KPIs is essential, data alone does not solve revenue problems. KPIs must be reviewed consistently and paired with action.
At JARALL, we don’t just report numbers — we analyze them. We identify trends, uncover root causes, and implement corrective strategies that improve performance over time.
How JARALL Helps Practices Take Control of Revenue
JARALL Medical Management provides transparent reporting and revenue cycle oversight that gives practices real visibility into their financial performance. Our KPI-driven approach includes:
• Detailed revenue cycle dashboards
• Denial and payer trend analysis
• A/R performance monitoring
• Documentation and coding feedback
• Actionable insights, not just data
This structure allows practices to understand why revenue is performing the way it is — and how to improve it.
Conclusion
Key revenue cycle KPIs are more than numbers — they are indicators of a practice’s financial health. Without tracking and analyzing these metrics, practices risk operating blindly and leaving revenue on the table.
By monitoring the right KPIs and partnering with experienced billing professionals like JARALL Medical Management, practices can reduce denials, improve cash flow, and build a stronger, more predictable revenue cycle.