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Top Revenue Cycle Key Performance Indicators

physician revenue cycle metrics

Healthcare organizations must manage their revenue cycle with an approach that balances patient care and quality. Due to increasing medical and drug costs paired with higher insurance premiums and deductibles, efficient revenue cycle management (RCM) is more important than ever.

There are many indicators one could use to gauge the effectiveness of various elements of the revenue cycle for their organization. However, these vary based on the type of organization doing the measuring. A pharmacy will value certain indicators more than a hospital might, and vice versa. Therefore, revenue cycle Key Performance Indicators (KPIs) will differ for each organization.

The Healthcare Financial Management Association (HFMA) approached this problem and determined 29 KPIs as a standard for healthcare revenue cycle excellence known as the MAP Keys. Regardless, some of these KPIs will not apply to certain organizations, and some will be valued more than others.

Revenue cycle performance benchmarks found in the MAP Keys can help determine where your company currently performs as well, as track improvements over time to desired levels.

To determine your organization’s best benchmarks and KPIs, you can reach out to one of our experts at Nearterm today.

Healthcare companies come in all sizes, from national pharmacy chains and large hospitals to small-town clinics and stand-alone providers. Some smaller organizations may need to hire additional staff to work on medical billing and revenue cycle management. These costs can add up, especially when considering training and education, turnover rates, and work limitations requiring multiple employees for each role.

Due to these factors, common financial tasks such as collections and medical accounts receivable services are often outsourced to third parties. You can also improve your RCM with the help of healthcare RCM companies. Modern technology allows for more efficient and seamless integration of third-party services (like healthcare clearinghouse services) than ever before.

5 Important Revenue Cycle KPIs

Here are some of the top KPIs to consider tracking now to measure important aspects of the revenue cycle:

  • Point-of-Sale Service (POS) Cash Collections
  • Clean Claim Rate
  • Days in Total Discharged Not Billed
  • Bad Debt
  • Days in Accounts Receivable

Point-of-Service (POS) Cash Collections

This KPI tracks POS collection and relates to payment received before services rendered and up to seven days after. This will help determine the effectiveness of your POS systems and those operating them.

This revenue cycle performance metric can be found using information from your POS system and your accounts receivable records. It can be calculated by taking the POS payments and dividing it by the total self-pay cash collected.

Tracking this and related revenue cycle metrics can identify problems in POS operations that are impacting RCM. Decreased efficiency in up-front payments may lead to increased collections and thus a loss of revenue. However, organizations with typically higher payments that require long-term payment options (greater than seven days average) may not benefit from this metric as much.

Clean Claim Rate

The clean claim rate corresponds to the claim denial rate in that it helps reveal problems and inefficiency in claims submitting and processing. Rejected claims require time to correct and may incur extra charges. The longer it takes to submit claims and resolve them, the longer it takes to determine eligibility and receive payments.

While there are many KPIs that relate to claims processing efficiency, the clean claim rate will show the average daily number of claims that pass without needing editing compared to the total number of claims accepted. This metric reveals the effectiveness of your claims processing and medical billing team. You can usually obtain this information from your claims management system or RCM Company.

Days in Total Discharged Not Final Billed (DNFB)

This healthcare key performance indicator helps determine revenue cycle performance by focusing on the claims-generation process. Variations of this metric will show the impact on cash flow due to claims inputting, and it can include issues related to delayed claims. A higher rate may reveal that claims are not be submitted promptly and warrants further investigating.

For example, if staffing issues are keeping claims from being submitted in a reasonable time-frame, it impacts your revenue cycle. You can calculate this metric by dividing the gross dollars in DNFB by the average daily gross patient service revenue, which is determined by the income statement and unbilled accounts receivable.

Bad Debt

Another useful KPI to consider is Bad Debt, which shows the effectiveness of collection efforts. It can also be used to determine the effectiveness of pre-service financial counseling or similar programs. It is important to note that this is not debt that has already been written off as lost.

Higher bad debt indicates inefficiency in previous areas of the revenue cycle including POS collections and financial counseling. It can be calculated by dividing bad debt from the income statement by gross patient service revenue over a set period.

Days in Accounts Receivable (A/R)

Finally, Days in A/R reveals how long it takes to get paid for services on average. This is useful in determining the effectiveness in obtaining payment for services, and how well the account receivables are being managed.

To find this KPI divide the total A/R by the average daily net patient service revenue using information from the balance sheet and income statement. To get the average daily net patient service revenue, you can also divide total annual sales by 365.

revenue cycle key performance indicators


There are many different performance indicators that healthcare businesses can use to benchmark and track various aspects of their revenue cycle. The key performance indicators to focus on will vary by organization type.

The Healthcare Financial Management Association developed 29 KPIs for healthcare companies and an additional six physician revenue cycle metrics. Of those, there are several that stand out as closely related to revenue cycle management. These are POS Cash Collections, Clean Claim Rates, Days in Total Discharged Not billed, Bad Debt, and Days in Accounts Receivable.

Calculating and tracking these revenue cycle KPIs will help identify problems or areas of improvement for your revenue cycle. However, it is not always practical or cost-efficient for a healthcare company to manage their revenue cycle in-house. Besides the various RCM metrics that could be tracked and identifying which are most important, there is also the need for quick and efficient medical billing, claims work, and financial management. On top of this is the need for constant training and education for staff working in these areas. Because of these factors, many healthcare organizations choose to outsource these important functions to qualified experts or healthcare management consulting firms like ours.

To find out more about how you can improve revenue cycle management efficiency and save on costs, contact our experts at Nearterm today.