Glossary · KPIs
Glossary · KPIsCost to Collect
The total operating expense required to collect each dollar of patient revenue, including billing salaries, software, denial-rework labor, and outsourced vendor fees.
Definition
Cost to Collect.
The total operating expense required to collect each dollar of patient revenue, including billing salaries, software, denial-rework labor, and outsourced vendor fees.
Formula
Total RCM operating cost ÷ Net patient revenue collected
Industry benchmark
2% to 4% is healthy for ambulatory; hospital systems run 3% to 6%.
Sources
Primary references for this entry.
- HFMA Cost-to-Collect benchmarks.
- MGMA Cost and Revenue Survey.
Related terms
Other terms in KPIs.
- KPIs
Clean Claim Rate
The percentage of claims accepted by the payer on first submission without rework. The single most-cited revenue cycle KPI for measuring billing operation quality.
Open entry - KPIs
Days in A/R
A measure of how long, on average, it takes a practice to collect payment after the date of service. The primary cash-flow KPI in revenue cycle management.
Open entry - KPIs
Denial Rate
The percentage of submitted claims initially rejected by the payer before any rework or appeals.
Open entry - KPIs
First-Pass Resolution Rate
The percentage of claims that resolve to a final disposition (paid or written off) without any post-submission rework. Stricter than clean-claim rate, which only measures initial acceptance.
Open entry - KPIs
Gross Collection Rate
Total payments collected as a percentage of total billed charges. A weak quality indicator on its own because it depends on chargemaster pricing.
Open entry - KPIs
Net Collection Rate
Collected revenue as a percentage of allowed amount, after contractual adjustments. The most rigorous measure of revenue-cycle effectiveness because it strips out chargemaster pricing.
Open entry
Frequently asked
About Cost to Collect.
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