Tracking performance is essential to any successful revenue cycle management (RCM) strategy. At MBC, we help healthcare organizations maximize collections, reduce denials, and increase financial clarity by focusing on medical billing KPI formulas that provide real-time visibility into revenue health.
Below are the most critical medical billing KPI formulas your practice should measure regularly—and what they reveal about your financial performance.
1. Days in A/R
Formula: Total A/R ÷ Average Daily Charges
Example: 900,000 ÷ 30,000 = 30 Days
This metric shows how quickly your practice collects payments. A high number may indicate cash flow problems or operational delays.
2. Clean Claim Rate
Formula: (Clean Claims ÷ Total Claims) × 100
Example: (2,280 ÷ 2,400) × 100 = 95%
A high clean claim rate means fewer rejections and faster reimbursements—something MBC prioritizes through automated scrubbing and dedicated account oversight.
3. Denial Rate
Formula: (Denied Claims ÷ Total Claims) × 100
Example: (120 ÷ 2,400) × 100 = 5%
Your denial rate is a direct indicator of billing accuracy. MBC minimizes this through proactive denial management and payer-specific insights.
4. Net Collection Rate
Formula: (Payments ÷ Adjusted Charges) × 100
Example: (940,000 ÷ 970,000) × 100 = 96.9%
This reveals how much of your expected revenue you’re actually collecting—one of the most telling medical billing KPI formulas in your RCM toolkit.
5. First Pass Resolution Rate
Formula: (Claims Paid on First Submission ÷ Total Claims) × 100
Example: (2,200 ÷ 2,400) × 100 = 91.7%
A strong first-pass rate keeps your receivables moving. MBC’s clean claim preparation plays a big role in improving this number.
6. Bad Debt Ratio
Formula: (Bad Debt ÷ Total Charges) × 100
Example: (30,000 ÷ 1,000,000) × 100 = 3%
This metric helps practices understand how much revenue is permanently lost, guiding more informed financial strategies.
7. Credit Balance A/R
Formula: (Credit Balance A/R ÷ Total A/R) × 100
Example: (45,000 ÷ 900,000) × 100 = 5%
Frequent monitoring of credit balances prevents compliance risks and ensures clean books.
8. Charge Lag Days
Formula: Total Days in A/R ÷ Number of Days
Example: 1,800 ÷ 800 = 2.25 Days
Shorter lag times mean faster reimbursement. MBC’s streamlined charge entry process reduces delays.
9. Patient Collection Rate
Formula: (Patient Payments ÷ Total Patient Responsibility) × 100
Example: (90,000 ÷ 120,000) × 100 = 75%
This KPI measures your effectiveness at collecting from patients—a growing concern in today’s high-deductible environment.
Why It Matters?
Every healthcare organization needs clear visibility into its revenue metrics. By tracking the right medical billing KPI formulas, you can drive better outcomes, reduce inefficiencies, and position your practice for long-term success.
At MBC, we don’t just report metrics—we act on them. Our data-driven strategies, dedicated account managers, and flexible pricing models empower providers to move from uncertainty to outcomes.
Want to improve your revenue metrics?
Schedule an audit today to learn how MBC can help transform your RCM performance.
FAQs:
Medical billing KPI formulas are performance metrics used to measure financial health in revenue cycle management. They help practices track collections, denials, and efficiency.
It shows how quickly your practice collects payments. Lower Days in A/R means better cash flow and faster reimbursements.
A high clean claim rate means fewer rejections and faster payment cycles. It reflects billing accuracy and reduces rework.
It shows how much of your expected revenue you actually collect. It’s a key medical billing KPI formula to measure overall financial performance.
MBC uses data-driven strategies, denial prevention, and clean claim practices to improve every major KPI formula in your billing cycle.
