Medical Practice Revenue Cycle Check
Days in A/R, denial rate, and collection rate: how much cash is stuck in billing and what to fix first.
Example scenario—not a forecast or verified benchmark. Enable JavaScript to edit inputs, view charts, save locally and export your analysis.
Example inputs
- Billing providers (physicians, NPs, PAs)
- 4
- Net charges (allowed amounts after contractual adjustments)
- 3,000,000
- Payments collected
- 2,820,000
- Current A/R balance (net)
- 370,000
- Share of A/R older than 120 days
- 18
- Claims submitted per year
- 24,000
- Initial claim denial rate
- 12
- Share of denied claims never recovered
- 35
- Staff cost to rework one denied claim
- 30
- Target days in A/R
- 35
- Target net collection rate
- 96
- Target denial rate
- 5
- Target share of A/R over 120 days
- 12
Example results
$82K of cash is stuck in A/R (45 days vs. 35 target) and about $124K a year leaks through denials and under-collection, roughly $31K per provider.
- One-time cash release at target days
- $82,329
- Annual revenue leakage
- $123,900
- Days in A/R
- 45 days
- Net collection rate
- 94%
- Denial rate
- 12%
- A/R over 120 days
- $66,600
- Average claim value
- $125
- Leakage per provider
- $30,975
What stands out
45 days in A/R vs. 35-day target
Each day of A/R ties up $8,219. Getting to target releases about $82,329 of cash once.
12% denial rate: 1,680 extra denials a year
Above your 5% target, they cost about $50,400 in rework and $73,500 in write-offs (avg claim $125).
Net collection rate 94% vs. 96% target
You are collecting $60,000 a year less than your contracts entitle you to at target.
18% of A/R ($66,600) is over 120 days
Older balances get harder to collect every month. $22,200 sits above your 12% target and needs a work-down plan.
Next actions
- Pull the last 90 days of denials by reason code; fix the top 3 root causes (eligibility, authorization, coding) at the front desk and in charge entry, not in rework.
- Submit clean claims within 48 hours of the visit and work A/R by payer weekly; each day cut is worth $8,219 of cash.
- Run a 30-day aged-A/R sprint on balances over 90 days, highest dollar first, and set a written write-off policy.
- Audit underpayments against your payer contracts and collect patient balances at check-in with card-on-file.
Model assumptions & limitations
- Days in A/R = net A/R balance / (net charges / 365). Gross-charge methods give different numbers; stay consistent month to month.
- Default targets (35 days, 96% net collection, 5% denials, 12% over 120 days) are common rules of thumb; healthy levels vary by specialty and payer mix. Verify for yours.
- Denial write-offs and the collection-rate gap overlap, so leakage counts the larger of the two plus rework cost, not both.
- Average claim value = net charges / claims; rework cost per denial is your estimate of staff time.