Understanding the net collection rate gives practices a better grasp on how effective they are in collecting money that’s owed. This easy-to-calculate metric provides useful insights into how your practice is truly performing. Read on to understand how to calculate your own net collection rate and how it impacts your revenue cycle.
Net collection rate represents the percentage of reimbursement achieved out of the reimbursement allowed based on payers contractual obligation. High-performing practices use this metric to measure their effectiveness in collecting reimbursable dollars.
This metric can also be used to limit revenue loss based on factors like uncollectible debt, untimely filing, and other non-contractual adjustments.
Along with days in accounts receivable and denial rates, the net collection rate is key to developing a clear understanding of your overall revenue cycle.