{"id":296336,"date":"2025-06-16T04:05:05","date_gmt":"2025-06-16T04:05:05","guid":{"rendered":"https:\/\/peraltafinancing.com\/uncategorized\/ways-to-measure-patient-collections-in-the-revenue-cycle\/"},"modified":"2025-06-16T04:05:05","modified_gmt":"2025-06-16T04:05:05","slug":"ways-to-measure-patient-collections-in-the-revenue-cycle","status":"publish","type":"post","link":"https:\/\/fivemor.com\/?p=296336","title":{"rendered":"Ways to measure patient collections in the revenue cycle"},"content":{"rendered":"


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Prompt patient payment after service is a key factor in keeping <\/span>revenue cycles on track<\/strong>.<\/span><\/a> However, patients don\u2019t always pay right away or in full. Despite around 90% of Americans having health insurance coverage, many <\/span>patients still face medical debt<\/a><\/strong>.<\/strong> Unpaid patient bills often leave providers on the hook chasing patient collections<\/strong><\/a> and footing the cost for uncompensated care.<\/span><\/p>\n

This article covers some of the key patient collections metrics to help revenue cycle leaders get insights on how to measure and improve revenue cycle collections.<\/span><\/p>\n

Why measuring patient collections is critical in revenue cycle management<\/span><\/h2>\n

When protecting profits in today\u2019s increasingly <\/span>challenging healthcare landscape<\/a><\/strong>, revenue cycle management (RCM) leaders know that \u201cwhat gets measured, gets managed.\u201d The first step to <\/span>improve patient collections rates<\/a><\/strong> is reviewing current data for issues. To do this, healthcare organizations must identify <\/span>key performance indicators<\/a><\/strong> (KPIs) for measuring patient collections in the revenue cycle. Patient collections metrics are quantifiable measures that illustrate if a healthcare organization is effectively optimizing its collections process. They provide RCMs visibility and insights that help indicate if the organization is achieving its goals and effectively managing inflows and outflows.<\/span><\/p>\n

Key revenue cycle patient collection metrics<\/span><\/h2>\n

Streamlining revenue cycle collections often hinges on collecting patient payments \u2014 and quickly. Here are a few common ways healthcare organizations can measure patient collections in revenue cycles.<\/span><\/p>\n

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  1. Days In Accounts Receivable (A\/R) Rate<\/span><\/b>\u2013 The days in Accounts Receivable rate is a metric that measures the average number of days it takes healthcare providers to collect payment for services \u2014 from both payers and patients. Lower days in A\/R typically indicate an efficient billing and collections process. Days in A\/R over 30 could lead to an increase in collections efforts, unloading to collections agencies, and even write offs to bad debt \u2013 all potentially resulting in cash flow issues and revenue loss.<\/span><\/li>\n
  2. Gross Collection Rate<\/span><\/b>\u2013 The Gross Collection Rate, or GCR, shows the percentage of total patient balances collected and indicates the health of the overall effectiveness of an organization\u2019s billing and collections process. Healthcare providers generally strive to keep GCRs as high as possible to prevent cash flow issues. The industry benchmark is typically around 95%, but this can vary by provider.<\/span><\/li>\n
  3. Adjusted Collection Rate<\/span><\/b>\u2013 Also known as the Net Adjustment Rate (NCR), this metric is shown as a percentage of the reimbursement healthcare providers collect in comparison to what they could have collected. It represents the amount of revenue healthcare organizations are losing, and a high NCR is typically an indicator of issues in the revenue cycle like uncollectible bad debt.<\/span><\/li>\n
  4. Patient Balance After Insurance Ratio <\/span><\/b>\u2013 The Patient Balance After Insurance Ratio, or PBAI Ratio, is the percentage of financial responsibility that falls on the patient after insurance pays. Tracking PBAI Ratios closely helps providers identify trends early on to stay ahead of issues that could potentially impact cash flow. As today\u2019s patients shoulder more self-pay costs, keeping tabs on this metric can help providers prioritize billing and collections that are compassionate and simple to access. <\/span><\/li>\n
  5. Patient Contact Rate<\/span><\/b> \u2013 The Patient Contact Rate measures how often a provider contacts patients with outstanding balances. Higher Patient Contacts Rates typically indicate high levels of engagement with patients about their unpaid bills that often leads to an easier collections process and improved cash flow. When Patient Contact Rates are low, providers may have an opportunity to increase patient communication efforts.<\/span><\/li>\n
  6. Bad Debt Rate<\/span><\/b> \u2013 The Bad Debt Rate shows providers how much patient debt goes uncollected and is written off as \u201cbad debt\u201d over a period of time. A high Bad Debt Rate often indicates a need to tighten up process improvements, like collecting more patient patients upfront. A good rule of thumb is to aim for a Bad Debt Rate of less than 5%. The lower the rate, the more efficiently the billing team collects patient balances.<\/span><\/li>\n
  7. Cost to Collect <\/span><\/b>\u2013 The cost to collect is a percentage-based metric that refers to the expenses healthcare organizations spend to recover payments from patients and payers. Many times, hospitals spend more to collect than what the patient owes, whether it\u2019s from time and resources calling unresponsive patients, paper statements sent to wrong addresses, etc., which makes this an important metric to track.<\/span> <\/li>\n
  8. Contingency Fees<\/span><\/b> \u2013 When healthcare organizations turn to third-party agencies for their collections, a contingency fee is often paid for their services. This fee is usually a percentage of what the third-party agency is able to recover, and is often around 20-50% of the total amount. Some healthcare organizations work with multiple collections agencies, which canstrain hospital cash flow even further. Hospitals must weigh the cost of outsourcing collections against maintaining in-house billing departments.<\/span><\/li>\n<\/ol>\n

    Strengthening the revenue cycle with effective patient collection metrics<\/span><\/h2>\n

    Optimizing patient collections<\/strong><\/span><\/a> metrics helps strengthen the <\/span>revenue cycle<\/a><\/strong>. Here are some strategies revenue cycle leaders can consider to help boost patient collections rates overall, improve patient engagement and lower bad debt rates:<\/span><\/p>\n