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Operated by AdvancedCare USA Inc., which sells revenue cycle software and services. Our formulas and sources are published so you can check them.

RCM benchmarks, and the definitions that make them comparable

A KPI without a denominator is a slogan. This page states formulas, exclusions, and sources so a vendor dashboard cannot quietly redefine the metric mid-pitch.

Last reviewed against published HFMA, CMS, MGMA, Premier, and related primary sources linked on this page on .

How to use this page

Prefer named definitions (HFMA MAP Keys where possible) over peer brag sheets. Prefer your own year-over-year trend when public percentile tables are paywalled or thin. Every band below is a reference frame, not a promise that your specialty must hit it.

KPI definitions (formulas first)

Days in A/R

Common formula: total accounts receivable ÷ average daily charges, often on a rolling period, with credit balances handled explicitly. Why it drifts: including or excluding credits, using gross vs net, and mixing patient A/R with insurance A/R all move the number without changing operations. MGMA has reported periods where many practices saw days in A/R increase (MGMA Stat context (opens in a new tab)). Practice literature often discusses a 30–40 day overall band as a management target — treat that as a commonly cited target, not a single DataDive percentile reproduced here (KPI materials (opens in a new tab)).

Cost to collect

HFMA-aware formula: RCM expense ÷ cash collections, with inclusions listed (HFMA guide (opens in a new tab), MAP Keys (opens in a new tab)). Why it drifts: leaving out statement vendors, agency fees, or front-desk time makes the rate look better. Hospital discussion often centres near ~2–3% of net collections under disciplined inclusion; independent clinics with heavy patient-responsibility work commonly sit higher once that stack is counted. Run your own estimate.

First-pass clean claim rate

Formula: claims accepted on first submission ÷ claims submitted (define whether secondary claims and voids count). Why it drifts: “accepted” can mean clearinghouse accepted, payer accepted, or paid without edit — three different bars. Better performers are widely discussed in the mid-to-high 90%s; many practices discover they sit lower once they measure. Publish the definition next to the number.

Initial vs final denial rate

Initial: denials on first adjudication ÷ claims. Final: claims never paid after appeals ÷ claims (or as % of net patient revenue — state which). Kodiak Solutions data reported via Fierce Healthcare put median final denial rate for hospitals at 2.5% in 2024 → 2.7% in 2025, with rising revenue leakage (report (opens in a new tab)). Coding-related denials have been cited as up 126% over three years in MDaudit data discussed in an HFMA roundtable (opens in a new tab).

Net collection rate

Formula: payments ÷ (charges − contractual adjustments), or a close variant — name the contractual-adjustment source. Why it drifts: using gross charges in the denominator turns a healthy collection rate into a horror story, and the reverse hides underpayments.

Reference bands (not trophies)

  • Days in A/R (overall)

    Better-performer discussion
    Often discussed near ~30 days
    Common / median discussion
    Often discussed ~30–40 days
    Needs attention
    Sustained >50 without a definition change
    Source framing
    MGMA-oriented practice KPI literature; verify definition

  • Cost to collect

    Better-performer discussion
    Low single-digit % of collections (hospital-style MAP)
    Common / median discussion
    Mid single-digit % when patient AR is heavy
    Needs attention
    Double-digit % of collections
    Source framing
    HFMA cost-to-collect method; model on /cost-to-collect

  • First-pass clean claim

    Better-performer discussion
    Mid–high 90%s (definition-dependent)
    Common / median discussion
    Upper 80%s to low 90%s common when unmeasured
    Needs attention
    Persistently <~85% with a clear definition
    Source framing
    Industry KPI practice literature; measure before ranking

  • Final denial rate (hospital median example)

    Better-performer discussion
    Below peer median with stable coding/auth
    Common / median discussion
    2.5–2.7% final denial (Kodiak 2024–2025 hospital sample)
    Needs attention
    Rising final denials + rising adjudication cost
    Source framing
    Kodiak via Fierce Healthcare; Premier adjudication $

Bands are discussion ranges with sources, not a sold MGMA DataDive table. If your specialty association publishes a tighter table, prefer that — and keep the same definition year over year.

Why definitions drift on purpose

Two worked patterns show up in vendor demos:

1. The shrinking denominator. A dashboard shows “denial rate” on adjudicated clean claims only, excluding claims rejected at the clearinghouse. The rate looks excellent; the worklist is still full. Ask: “What is excluded from the denominator?”

2. The missing numerator. “Cost to collect is under 3%” while statement vendor fees, patient-statement postage, and half the front desk live in other cost centres. Ask: “List every GL account in the numerator.”

HFMA MAP Keys (opens in a new tab) exist to make those games harder. You do not need to buy a peer survey to insist on a written definition.

How to measure yours this month

From your practice management system, pull:

  1. Total A/R and average daily charges for the same rolling window (often 90 days) — compute days in A/R yourself.
  2. Patient-responsibility charges last 90 days (not gross charges) and open self-pay balances.
  3. Claims submitted vs accepted on first submission for one calendar month — write the acceptance rule you used.
  4. Initial denials and final write-offs to bad debt / denial — separately.
  5. RCM expense for the quarter: billing wages (loaded), clearinghouse, statements, collection agency, eligibility tools.

Then run the cost-to-collect calculator on the patient slice. If a vendor’s dashboard cannot reproduce these five pulls, it is not your system of record for the argument.

Common questions

Are these official MGMA percentiles?
No. Where MGMA or HFMA publish methods or survey context we cite them. We do not reproduce paywalled DataDive percentile tables we cannot show you.
Should I use hospital MAP Keys for a five-provider clinic?
Use the definitions; be careful with the peer set. Hospital inclusion sets and volumes differ. Year-over-year self-comparison is often more honest than a hospital percentile.
Where do I get the calculator constants?
On /cost-to-collect — every constant is listed with source, publisher, and as-of date in the model notes and assumptions.

Sources

  1. HFMA Guide to Better Practices in Measuring Cost-to-Collect (opens in a new tab) — HFMA
  2. HFMA MAP Keys — industry-standard revenue cycle KPIs (opens in a new tab) — HFMA
  3. The KPIs that define revenue cycle excellence (opens in a new tab) — HFMA
  4. Reshaping revenue cycle strategy (HFMA roundtable; MDaudit-sponsored) (opens in a new tab) — HFMA / MDaudit-cited data
  5. Despite better cash flow, providers missed out on more revenue in 2025 due to increased payer denials (opens in a new tab) — Fierce Healthcare (reporting Kodiak Solutions data)
  6. Premier: claims adjudication costs providers $25.7 billion (opens in a new tab) — Premier Inc.
  7. MGMA Stat: half of practices saw days in A/R increase (2021 poll context) (opens in a new tab) — MGMA
  8. Practice RCM KPI white paper (MGMA-oriented materials) (opens in a new tab) — MGMA / practice RCM KPI white paper

Last reviewed against published HFMA, CMS, MGMA, Premier, and related primary sources linked on this page on .

Every benchmark and formula on this page is sourced and dated above. Where a figure is a range, the range is the honest answer, not a hedge. If you think something here is wrong or out of date, tell us — corrections are logged and dated.

RCM Benchmarks and KPI Definitions | rcm.today