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How can a practice track collection rate on patient-paid accounts?
Collection rate is the amount actually collected divided by the amount billed, for a defined group of invoices, multiplied by 100. For patient-paid accounts, track it separately from insurer or medical-scheme payments, as the causes of non-payment differ.
Example: 80,000 collected from 100,000 billed gives 80 percent for that group of invoices.
It matters because billed revenue is not income until collected.
Commonly misread:
- Measuring collections against invoices from the same month only, when many payments arrive later. Use invoice cohorts followed over time.
- Including write-offs and adjustments inconsistently.
- Ignoring the cost of chasing small balances.
Track the rate by 30, 60 and 90 days after billing, and by payment method. Collecting payment at the time of the visit often changes results, which you can test and measure against your own history.
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