Medical Practice Revenue Cycle Calculator
Evaluate your practice's revenue cycle health by calculating key performance indicators including net collection rate, days in accounts receivable (AR), denial rate, and estimated revenue leakage.
Gross charges submitted to payers over the period
Write-offs due to payer contracts (not bad debt)
Actual payments received from payers and patients
Total outstanding accounts receivable balance
Number of days in the reporting period (e.g. 30, 90, 365)
Number of claims submitted during the period
Number of claims denied by payers (initial denials)
Uncollectible amounts written off (not contractual)
Formulas Used
Gross Collection Rate = (Collections ÷ Gross Charges) × 100
Net Collection Rate = Collections ÷ (Gross Charges − Contractual Adjustments) × 100
Days in AR (DAR) = AR Balance ÷ (Gross Charges ÷ Period Days)
Denial Rate = (Claims Denied ÷ Claims Submitted) × 100
Net Collectible Revenue = Gross Charges − Contractual Adjustments
Uncollected Net Revenue = max(0, Net Collectible − Collections)
Total Revenue Leakage = Bad Debt Write-offs + Uncollected Net Revenue
Average Revenue per Claim = Collections ÷ Total Claims Submitted
Assumptions & References
- Contractual adjustments represent payer-contracted write-offs only, not bad debt or charity care.
- Net Collection Rate benchmark ≥ 95%: MGMA (Medical Group Management Association) recommends top-performing practices maintain ≥ 95–98%.
- Days in AR benchmark < 35 days: MGMA and HFMA (Healthcare Financial Management Association) cite < 35 days as best practice; > 50 days signals significant concern.
- Denial Rate benchmark < 5%: MGMA reports top-quartile practices achieve initial denial rates below 5%; industry average is 5–10%.
- Bad Debt benchmark < 2% of collections: Generally accepted threshold for well-managed practices (HFMA).
- Revenue leakage includes both bad debt write-offs and net revenue that was collectible but not collected within the period.
- DAR uses gross charges as the denominator, consistent with standard RCM methodology.
- This calculator covers a single reporting period; trend analysis across multiple periods is recommended for actionable insights.
- References: MGMA DataDive, HFMA Revenue Cycle Metrics, CMS Physician Fee Schedule guidance.