Improving Net Collection

Article

Our net collection ratio is lower than it supposedly should be - currently 83 percent. Could you please explain exactly what this ratio indicates and what we need to do to improve our percentage?

Question: Our net collection ratio is lower than it supposedly should be - currently 83 percent. Could you please explain exactly what this ratio indicates and what we need to do to improve our percentage?

Answer: Net collections is meant to measure how much you have collected of the amount you are owed (not the amount you charge, but what payers and patients actually owe you). What it indicates is that you need to do more to collect.

And what does that mean? Well, I’d start to sleuth that out by using that number as a benchmark for all your payers and by contrasting all payers to patient receivables. In other words, who owes you the money?

If it’s mostly patients, you can tighten time-of-service collections on past balances, copays, and coinsurances. If it’s mostly payers, start to look at your write-offs and denials. Why isn’t the money coming in? What can you do on your end to improve it? For example, if you are getting timely filing denials, you can obviously file faster.

There are lots of other tips, but hopefully this gives you a sense of how to proceed to pinpoint exactly where the problem is - and fix it.

Newsletter

Optimize your practice with the Physicians Practice newsletter, offering management pearls, leadership tips, and business strategies tailored for practice administrators and physicians of any specialty.

Recent Videos
Safeguard your bottom line
Is your practice ready to expand?
P2 Management Minute: Keeping practice staff happy
P2 Management Minute: Improving patient satisfaction
P2 Management Minute: Measuring practice staff performance
P2 Management Minute: Making your practice welcoming to patients
P2 Management Minute: Reducing malpractice risk
P2 Management Minute: Summer staffing shortages
P2 Management Minute: Hiring practice staff
P2 Management Minute: Defeating payer denials
© 2025 MJH Life Sciences

All rights reserved.