Top 10 KPIs for Measuring the Impact of RCM Solutions in Healthcare

If you want billing to flow, cash to arrive on time, and denials to shrink, you need clear healthcare KPIs that show what is actually working. Powerful RCM solutions make a difference only when you track the right revenue cycle metrics and act on them. This guide breaks down ten practical indicators, why they matter, how to calculate them, and how to use performance measurement to drive steady gains without complexity.

1. First Pass Resolution Rate

It shows how many claims get paid on the first submission. High first-pass resolution means cleaner data, better edits, and fewer staff touches.

How to Compute
Calculate by dividing claims paid on the first submission by total claims submitted in the period. Aim for ninety percent or higher. Use payer-specific edit rules inside your RCM solutions. Tighten front-end registration, eligibility, and authorization so fewer claims need any rework.

Action
Take action to analyze payers or locations that sit below the target. Fix the one or two upstream fields that cause most rework, such as missing prior authorization or wrong subscriber ID.

2. Clean Claim Rate

The metric shows the percentage of claims that pass all scrubber edits and payer rules with no corrections needed.

How to Compute
Clean claims divided by total claims created. It can easily make the claim rate ninety-five percent or better. Maintain a living library of payer edits. Your claim scrubber should flag recurring issues by field, by user, and by payer so you can fix training and templates.

Action
If a single edit occurs, frequently update your EHR pick lists, charge templates, and registration prompts to remove the error at entry.

3. Denial Rate and Avoidable Denials

This metric shows how many claims get denied and which ones you could have prevented. Avoidable denials are the best lever for quick cash improvement.

How to Compute
Total denied claims are divided by the total number of submitted claims. Track avoidable categories such as authorization missing, eligibility, coverage term, and coding edits. Keep overall denials under five to seven percent. The best RCM solutions tag denial reasons with source and owner, so work queues go to the right team.

Action
Pick the top two denial reasons each month and conduct a focused root cause analysis. Change one workflow rule or one training checklist, then check the results by payer the next month.

4. Days in Accounts Receivable and AR over Ninety

Days in accounts receivable show how long it takes to turn a charge into cash, and how much is stuck remains uncollected in aged accounts

How to Compute
Total AR divided by average daily charges. Also track the percent of AR older than ninety days.
Days in AR under forty are common for well-tuned ambulatory groups. Hospital ranges vary by payer mix and service lines. Keep the over-ninety bucket below fifteen percent. Segment by payer and by location, not just overall.

Action
Create payer-specific follow-up intervals. Automate reminders at day seven, day fourteen, and day twenty-one. Escalate to phone at the second missed response.

5. Net Collection Rate or Adjusted Collection Rate

Net collection rate shows how much of the expected allowed amount you actually collect after contractual adjustments.

How to Compute
Calculate by dividing total payments by (total charges minus contractual adjustments). Exclude non-contractual write-offs such as bad debt. Aim for ninety-five percent or better. Low values point to underpayments or preventable write-offs. Good RCM solutions include underpayment detection against fee schedules.

Action
Load current payer contracts and expected allowed amounts. Send automated variance tasks to follow-up teams when payers short-pay.

6. Cost to Collect

Cost to collect helps to evaluate the share of revenue you spend on the business of collecting it. It keeps the process smooth while reducing the costs.

How to Compute
Total business office costs divided by cash collected. Include staff, vendor fees, clearinghouse, statement costs, and payment portal fees. Four to six percent is a common goal for medical groups. However, the goal can be flexible as hospitals vary more due to complexity. Use automation for low-value touches and move staff to denial prevention and payer outreach.

Action
Map your top five high-volume tasks and remove steps that do not change outcomes. For example, batch insurance verification, auto-post zero balance claims, and suppress manual touches on clean claims.

7. Charge Capture Accuracy and Late Charges

It shows whether all services and supplies are coded and billed correctly and how many charges arrive after bills should have gone out.

How to Compute
Audit sample encounters and compare documented services to billed codes. Track the percent of charges submitted after the posting window. Accuracy above 98 percent. Late charges close to zero. Link clinical documentation prompts to codes and require encounter sign-off before discharge or visit closure.

Action
Set hard stops for missing documentation that blocks charge creation. Provide monthly coder feedback to clinicians with simple examples and brief tips.

8. DNFB Days

DNFB (Discharged Not Final Billed) refers to patient cases where discharge is complete, but the final bill has not yet been generated. It shows how long cases sit finished but unbilled due to coding or documentation gaps.

How to Compute
Average days from discharge to final bill for cases not yet billed. Also, monitor the dollar value in DNFB. Three to five days for routine cases is a strong target. Use real-time alerts when a chart needs a provider signature or a missing document.

Action
Publish a daily DNFB dashboard by unit and by provider. Give coding teams a clear queue with reason codes such as “query pending or operative note missing.”

9. Lag Days from Service to Claim Submission

It shows how quickly you convert a visit or procedure into a submitted claim. Lag drives cash flow more than almost any other variable you control.

How to Compute
Average days from date of service to claim file date. One to three days for professional claims and three to five for facility claims are common goals. Standardize close times for charges each day.

Action
Use same-day coding for high-volume services with stable templates. Auto-release charges that pass edits at preset times, so submissions go daily rather than in large weekly batches.

10. Patient Responsibility Collection Rate and Bad Debt Rate

It shows how well you collect co-pays, co-insurance, and deductibles, and how often accounts roll to write off.

How to Compute
Patient cash collected divided by patient responsibility. Track bad debt write-offs as a share of total charges or of patient responsibility. Collect at the point of service whenever possible. Provide clear estimates and easy payment plans accordingly. Aim for steady month-over-month gains rather than a single spike.

Action
Offer text to pay, card on file, and simple three-choice plans. Use friendly digital reminders before sending a paper statement. Keep statements short with only what the patient needs to act.

Bringing It Together

When you measure the right things, your RCM solutions become a growth engine. The ten revenue cycle metrics above give you a clear view of quality, speed, yield, and cost. Use them to guide daily decisions, not just to fill a report. With steady performance measurement, you will submit cleaner claims, cut denials, collect faster, and spend less to do it. That is how revenue cycles stay healthy and how clinical teams feel the relief of fewer billing headaches.