Most practices don’t know their billing numbers. Not because they can’t find them — every EHR has a billing report — but because nobody defined which numbers matter and what they should look like when things are working.
These are the seven KPIs that tell you whether your billing is performing, what each benchmark should be, and what to do when a number is wrong.
1. Clean Claim Rate
Definition: Percentage of claims that process on first submission without rejection or denial.
Benchmark: 95% or above. Best-in-class is 98%+.
Where to find it: EHR billing reports → Claim submission report → filter by first-pass acceptance.
What a bad number means: Below 90% means systematic errors in coding, eligibility, or claim data. Every rejected claim costs $25–$50 to rework and delays payment by 2–4 weeks. At 500 claims/month with an 88% clean claim rate, that’s 60 reworks/month — $1,500–$3,000 in administrative waste on top of the revenue delay.
What to fix: Run a denial reason analysis. The top 3 denial codes explain 80% of clean claim failures. Fix the workflow that generates those three codes and the clean claim rate recovers.
2. Days in AR (Accounts Receivable)
Definition: Average number of days from date of service to payment receipt.
Benchmark: Under 35 days. Best-in-class is 25–30 days.
Where to find it: EHR → AR summary → average days outstanding.
What a bad number means: Days in AR above 45 indicates slow claim submission, slow follow-up, or high denial rates. Above 60 means serious workflow problems — claims sitting unworked, denials aging without follow-up, or eligibility errors not being caught before submission.
What to fix: Days in AR is usually a symptom, not the root cause. Run the other KPIs first. Clean claim rate and denial rate problems almost always drive AR inflation.
3. AR Over 90 Days (as % of Total AR)
Definition: Percentage of your total outstanding receivables that are older than 90 days.
Benchmark: Under 10%. Best-in-class is under 5%.
Where to find it: EHR → AR aging report → 90+ day bucket as % of total.
What a bad number means: Claims in 90-day AR have a dramatically lower probability of collection. Payer timely filing limits typically fall between 90 and 180 days. At 18% AR over 90 days on a $500,000/month billed charge practice, approximately $90,000 in claims are at serious write-off risk at any given time.
What to fix: Work the 90-day bucket before it becomes the 120-day bucket. Prioritize by claim value. Identify any systematic patterns — the same payer, the same denial code, the same provider — and fix the root cause while working the backlog.
4. Denial Rate
Definition: Percentage of submitted claims that are denied by the payer.
Benchmark: Under 5%. Industry average is 11.8% (2024 data). Best-in-class is under 3%.
Where to find it: EHR → denial management → denial rate by submission period.
What a bad number means: Denial rates above 10% represent systematic coding, eligibility, or authorization problems. The 2024 industry average of 11.8% means most practices are operating significantly above best-in-class. Each denied claim costs $25–$50 to rework — and 35–60% of denied claims are never resubmitted, meaning that percentage of your revenue is permanently lost.
What to fix: Run a denial reason report. Sort by dollar value, not count. The highest-dollar denial codes — usually CO-11 (diagnosis inconsistency), CO-4 (modifier), CO-50 (no auth) — get fixed first.
5. Collection Rate
Definition: Percentage of total collectible charges (adjusted for contractual write-offs) that are actually collected.
Benchmark: 98%+ of net collectible charges within 60 days. Overall collection rate should be above 95%.
Where to find it: EHR → financial reports → collection rate or payment performance.
What a bad number means: A collection rate below 90% means significant revenue is being left uncollected — either through write-offs on recoverable claims, unworked denials, or AR that’s aging past the point of collection.
What to fix: Distinguish between contractual adjustments (expected) and administrative write-offs (should be zero or near-zero). Every administrative write-off represents a billing failure that should have been prevented or recovered.
6. First Pass Resolution Rate
Definition: Percentage of denied claims that are resolved (collected or adjusted) without requiring a second appeal.
Benchmark: 85%+. Below 70% indicates the appeal process itself is broken.
Where to find it: EHR or denial management system → appeal tracking → first appeal success rate.
What a bad number means: Low first-pass resolution means either the wrong claims are being appealed (claims with no merit) or the appeals themselves are poorly constructed (missing documentation, wrong codes used in the appeal letter). Both are fixable.
7. Bad Debt Write-Off Rate
Definition: Percentage of net collectible charges written off as uncollectable.
Benchmark: Under 1% of net collectible charges. Above 3% indicates a serious problem.
Where to find it: EHR → financial reports → write-off analysis → filter for bad debt vs. contractual.
What a bad number means: High bad debt write-off rate means claims are aging past recovery without being worked. The root cause is almost always a denial and follow-up workflow problem, not a collections problem.
Your KPI Diagnostic — Where to Start
| KPI | Your Target | Red Flag | Pull From |
|---|---|---|---|
| Clean Claim Rate | 95%+ | Below 90% | Claim submission report |
| Days in AR | Under 35 | Above 45 | AR summary report |
| AR Over 90 Days | Under 10% | Above 15% | AR aging report |
| Denial Rate | Under 5% | Above 10% | Denial management report |
| Collection Rate | 95%+ | Below 90% | Financial summary |
| First Pass Resolution | 85%+ | Below 70% | Appeal tracking |
| Bad Debt Write-Off | Under 1% | Above 3% | Write-off analysis |
If any number is outside benchmark, the 4-week free pilot at Dr. Billerz runs these same metrics in your actual EHR with a dedicated specialist. You see where the gaps are and what dedicated billing produces before spending anything. Book a free 15-minute call — or start the pilot.
Related Resources
- Should You Outsource Medical Billing? — the 5 KPI-based signs your billing needs a change
- How Much Does a Medical Biller Cost? — full cost breakdown by model
- Best Medical Billing Staffing Companies [2026]
More resources: How to reduce medical billing denials | How to audit your billing performance | Medical billing services for small practices