Physicians Practice Questions & Answers : Measuring Collection Success

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Questions & Answers

Measuring Collection Success (posted 5/1/09)

Q: 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?

A: 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:

0-30 days: 67.35%

31-60 days: 13.33%

61-90 days: 6.22%

91-120 days: 3.08%

120+ days: 8.23%

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.

Additional Resources

View more questions and answers from the May 2009 issue

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