Key Performance Indicator: Collection Percentage

Perhaps one of the most overused yet least significant KPIs, Collection Percentage measures what percent of accounts are being collected for a medical practice. Consider Practice A that collects 95% of a $50 charge ($47.50), and Practice B that collects 80% of a $75 charge ($60.00) for the same level of service.

Would you rather have $47.50 and a 95% collection rate or $60 and a 80% collection rate?

If you compare billing performance based on collection percentage it would appear that Practice A is the better performer, when actually Practice B is collecting a good deal more cash for their services.

In short, given all of the possible variables (fee schedules, payer mix, procedure mix, etc.) using Collection Percentage as a key indicator for revenue cycle performance is not typically recommended. Further information, you may visit http://practicemax.com/press/