Billing guide · Guide 02 of 04
Five numbers that show whether your billing works.
Whoever does your billing, five numbers tell you whether the money is coming in: what share of the collectible you collect, how long it takes, how much is old, how much is denied and how much nobody has touched. Each takes minutes to pull.
Pull six months, not one
A chiropractic practice bills many small claims, and a single month swings with a holiday, a payer’s slow week or one large recoupment. Pull each number for the last six months and look at the direction, not one month’s value. Most EHR billing modules can produce every input below from their aging, charges and payments reports.
The worked figures in this guide come from one example practice: $12,000 a month in insurance charges, $3,600 a month in contractual adjustments, $8,000 a month in payments and $10,000 in open receivables.
1. Net collection rate
What it measures: the share of the money you could collect that you actually collected.
Formula: payments ÷ (charges − contractual adjustments), for the same period. For the example practice: $8,000 ÷ ($12,000 − $3,600) = 95.2%.
Benchmark: HFMA treats 95% as a minimum and 97% to 99% as optimal. The American Academy of Family Physicians uses the same 95% floor, measured over 12 months.
What it hides: the rate trusts the contractual adjustments. If a payment came in below your contract rate and was posted as a contractual adjustment, the money you lost disappears from both sides of the formula and the rate still looks healthy. Spot-check allowed amounts against your fee schedule each month; the guide to reading an ERA shows where to find them.
2. Days in accounts receivable
What it measures: how many days of charges are waiting to be paid.
Formula: total open receivables ÷ average daily charges. Use the last three months of charges divided by the number of days in them. For the example practice: $10,000 ÷ ($36,000 ÷ 91 days) ≈ 25 days.
Benchmark: the American Academy of Family Physicians suggests staying below 50 days at a minimum, with 30 to 40 days preferable. Some sources, including HFMA, calculate days from net receivables and net revenue instead, so compare a number only with one built the same way.
What it hides: writing off old claims shrinks receivables and makes this number look better. Read it beside the net collection rate: if days in receivables falls while the collection rate falls too, claims are being written off, not paid.
3. Receivables older than 90 days
What it measures: how much of what you are owed has gone stale.
Formula: receivables more than 90 days past the date of service ÷ total receivables. Run it separately for insurance and for patient balances; they age for different reasons.
Benchmark: we found no authoritative published target for the 90-day cut. For receivables older than 120 days, MGMA reported a 2021 median of 13.54% in multispecialty practices. Watch your own direction month to month.
What it hides: the filing deadline. A claim at 85 days with a 90-day commercial filing limit is more urgent than a claim at 200 days under appeal. Sort the old claims by deadline, not only by age.
4. Denial rate
What it measures: how often payers say no.
Formula: claims denied in whole or in part ÷ claims the payers processed in the same period. Rejected claims are not denials; count them separately. The guide to rejected and denied claims explains the difference.
Benchmark: MGMA reported that 8% of claims were denied on first submission in 2023 data from single-specialty practices, and that most practices saw denials rise. Lower is better; watch your own trend by payer.
What it hides: the reasons. The rate is only useful broken down by payer and reason code. A practice with a modest denial rate can still lose a steady stream of visits to one repeatable cause, such as a payer’s visit limit or a missing modifier. The guide to chiropractic denial codes covers what to do with each one.
5. Items nobody has touched
The first four numbers are rates. The fifth is a count, and in many small practices it is the most telling: the claims, remittances and deposits waiting for someone, and how long each has waited.
- Rejections not yet corrected and resent.
- Denials with no correction, reconsideration or appeal started.
- Remittances not yet posted.
- Deposits not yet matched to a remittance.
- Credit balances not yet refunded or applied.
Our suggestion: nothing on this list older than a week. Each item is cheap to fix while it is fresh and expensive once a deadline is near. A biller who cannot tell you these counts on request is not tracking them.
Reading them together
No single number tells the story. A few patterns are worth knowing:
| Pattern | What it usually means |
|---|---|
| Collection rate steady, days in receivables rising | Claims are paid in the end, but slowly. Look at follow-up on claims with no answer. |
| Days in receivables falling, collection rate falling | Old claims are being written off instead of worked. |
| Receivables over 90 days rising | Follow-up has stalled. Sort the old claims by filing and appeal deadline today. |
| Denial rate rising for one payer | A rule changed or a requirement is missing. Read that payer’s denials by reason code. |
| Unworked items growing | The person doing the billing is out of hours, whoever they are. |
How Claims Native keeps these numbers honest
We post each payment into your EHR with every adjustment, so the reports you run there stay complete. We check each payment against your contract, so an underpayment is not posted as a contractual adjustment. A short payment stays open until it is resolved instead of being written off, and a person reviews every reconsideration, appeal and payer dispute before it goes out.
Sources
- HFMA, 7 KPIs providers should be tracking. Net collection rate and denial rate.
- American Academy of Family Physicians, Five key metrics. Collection rate and days in receivables.
- MGMA, Not-so-graceful aging: days in A/R in 2021. Receivables older than 120 days.
- MGMA, Strategic improvements in your RCM to reduce claim denials (2024).