Question: I have a new practice. We have been open for three months now, and I am finally starting to see insurance payments come in. What benchmark should I use to see if we are in line with other offices?
Answer: I would look at these measures:
Adjusted collection ratio — how much you are collecting of the amount you are actually owed (not of what you charge). Adjusted collection rate = cash in/allowable.
In most internal medicine practices this runs 99.39 percent according to Medical Group Management Association data.
Days in A/R — how long is it taking you to collect? (This will change fast now that you have things rolling.) Most people break this down into 30 day periods; what percent do they collect in each 30 day section. Faster is better. Here’s the benchmark from MGMA for family practice.
Days in A/R:
You also can break this down by payer. Assuming you are billing Medicare electronically, you should get payment from it in 15 days or less.
