Revenue Cycle Metrics for Medical Billing Outsourcing

If I asked you right now which payer is taking the longest to pay you, which provider has the most money sitting in A/R, or how much cash is sitting unapplied, could you tell me without waiting for a report?

That is the problem. Most practices already have this information in their own system, but the monthly total doesn’t show where the money is slowing down or being lost.

There are a handful of numbers I would look at first, and once you see them, you can’t unsee them.

Here is one that catches a lot of practices. A new provider joins, the schedule fills within weeks, and collections hold steady, so the hire looks like it is working. But if one large payer hasn’t finished the provider’s enrollment, those claims sit on hold while the established providers carry the month. In a 2021 MGMA Stat poll, 54% of practices said credentialing-related denials had increased. Practice leaders reported that some payers take as many as 100 days to assign an effective date, and some won’t accept retroactive claims once they do. A held claim isn’t a denial and doesn’t show up as one. It just isn’t revenue yet, and it may never be.

The practice’s own system would show it. Pull charges and payments by rendering provider and payer, and the gap stands out: a provider with a full schedule and almost nothing collected from one payer. The monthly total is accurate. It just averages away the one number that matters.

If the answer to how the month went is a report someone else prepares, on a schedule someone else sets, the practice is seeing its revenue cycle secondhand. The numbers in this guide are ones a practice can pull from its own practice management system and clearinghouse, without waiting on a vendor or a single staff member. This guide may be best suited for an admin looking for a refresher, but we hope it helps those assuming these roles for the first time, or medical professionals at smaller practices who wear multiple hats.

Seven numbers your system can already show you

Same questions, whether the billing team sits down the hall or works for an outside company.

1. What are our days in A/R, overall, by payer, and by provider?
2. What percentage of our A/R is older than 90 and 120 days?
3. What is our adjusted collection rate over the last 12 months?
4. What is our denial rate, broken out by payer and reason?
5. What percentage of claims pass the clearinghouse on the first submission?
6. How many days pass between the date of service and the claim going out?
7. How much is sitting in credit balances and unapplied payments?

If some of these take longer to find than expected, that is useful to know early. The goal is not a perfect scorecard. It is a practice that can see its own numbers without asking permission.

Where should your billing numbers actually live?

Many billing companies send a monthly summary, and many in-house teams produce a clean report every month. Both can be useful. The question is whether the practice can reproduce those figures from its own system, on its own schedule.

A test: ask whoever handles billing to show how a reported number was calculated, then run the same report yourself in the practice management system. If the figures match, that is a strength worth protecting. If they don’t, or if only one person knows which report to run, that is worth knowing too. This has nothing to do with the quality of a billing team. It is about whether the practice depends on one person or one outside company to see its own revenue.

The same logic applies to data at the end of a relationship. Under HIPAA, a business associate agreement must require the business associate to return or destroy all protected health information when the agreement ends, where feasible. That protects patients. It does not, by itself, guarantee that the practice walks away with a usable billing history. When the work happens in the practice’s own system, that question mostly answers itself.

Useful to ask

How long does it take to get paid, and from which payers?

Days in A/R is the number most administrators already watch, and for good reason. It is a simple read on how fast work turns into cash.

Pull it by payer for the last 90 days. The American Academy of Family Physicians recommends keeping days in A/R below 50 at a minimum, with 30 to 40 days preferable. AAFP also notes that a single slow payer can hide inside a reasonable average: a practice averaging close to 50 days overall may have Medicaid claims averaging 75.

Then look at aging. AAFP cautions that good overall days in A/R can mask elevated amounts in older receivables, which is why it points to the A/R over-120-days benchmark. A six-week vacancy on the billing team, in-house or outsourced, tends to show up here first, because older A/R collects at a lower rate.

These benchmarks are directional and vary by specialty and payer mix. MGMA DataDive offers specialty-specific comparisons for practices that want a closer match.

Are you collecting what your contracts say you should?

The adjusted collection rate, sometimes called the net collection rate, compares what the practice collected with what its contracts say it should have been owed. AAFP calculates it by dividing payments, net of credits, by charges net of contractual adjustments, and recommends a 12-month time frame. Its guidance puts the minimum at 95%, with most practices between 95% and 99%.

The number only means something when adjustments are posted correctly. AAFP flags inappropriate write-offs as one of the most common posting mistakes, and suggests categorizing noncontractual adjustments such as untimely filing or missing prior authorization so the sources of lost revenue become visible.

A test: pull every adjustment code used in the last quarter and ask which ones represent money the practice could have collected.

Useful to ask

Where do claims stall before and after the payer sees them?

Two reports answer this: the clearinghouse rejection report, which shows claims that never reached the payer, and the denial report, which shows claims the payer reviewed and refused. The Healthcare Financial Management Association treats these as separate measures in its MAP Keys, the industry-standard set of revenue cycle KPIs, listing clean claim rate and remittance denial rate as distinct indicators.

Pull denials for the last 90 days by payer and reason code. AAFP describes a 5% to 10% denial rate as the industry average and below 5% as more desirable. Many practices sit above that range. In Experian Health’s 2025 State of Claims survey, the share of respondents reporting denial rates of 10% or higher rose from 30% in 2022 to 38% in 2024, then to 41% in 2025. The most common causes were missing or inaccurate data, authorization issues, and registration mistakes.

That pattern matters for where the practice looks. If most denials trace back to registration or authorization, the fix starts at the front desk, not in billing. Moving the billing work wouldn’t change that, and keeping it in-house wouldn’t resolve it on its own. This is why it makes sense to pick a medical billing vendor that also manages prior authorizations

How quickly does the work reach the payer?

Most administrators know roughly how long it takes to get paid. Surprisingly, fewer track how long it takes for the work to reach the payer. The practice controls that stretch, because payers can’t speed it up or slow it down.

It helps to split it into two parts. Charge lag is the time from the date of service to when the charge is posted in the billing system. HFMA’s Total Charge Lag Days MAP Key measures exactly that, counting the days from the date of service to the posting date for each charge code. Submission lag, which some systems call send lag, runs from the date of service to when the claim goes to the payer. A charge posted the next day but held four more days in a claim edit queue has a short charge lag and a longer submission lag; the two point to different fixes.

A test: pull both numbers for the last month, by provider and location. If most charges post within a few days, that is a strength worth protecting. HFMA counts any charge posted more than three days after the date of service as a late charge, which gives a practical benchmark. If one provider’s charges routinely sit a week or more, the cause is usually upstream, such as unsigned notes, open encounters, or missing charge entry. If charges post quickly but claims still wait, the claim scrubber and edit queue are the place to look.

Many practice management systems report this directly. DrChrono, for example, has a Charge Lag Report under its Billing menu. It breaks out charge lag, send lag, and payment lag, and lets you filter by provider, office, payer, and date of service. NextGen’s own materials describe measuring initial charge lag, the time from the patient visit to the first charge entered in NextGen Enterprise PM. If a system has no named lag report, most can export the date of service, charge post date, and claim submission date to a spreadsheet, where the math takes a few minutes.

Useful to ask

Every day of lag adds to days in A/R before a payer has seen anything, and it moves claims closer to timely filing limits.

Lag happens inside the practice, making it the clearest case for keeping these numbers in the practice’s own system.

What is sitting in the account that nobody has touched?

Credit balances and unapplied payments rarely appear in a monthly summary, which is exactly why they are worth checking. HFMA tracks net days in credit balance as its own MAP Key. Credit balances can include patient overpayments and payer overpayments that may need to be refunded, and unapplied payments mean cash has arrived without being matched to a claim.

Run the credit balance and unapplied cash reports and note the oldest item on each. Neither number says much about effort. Both say a lot about whether anyone owns the cleanup work.

What should change when an outside company does the billing?

Some billing companies move the work onto their own software. There can be good reasons for that, including efficiency and standard workflows. The trade-off is visibility: the practice may see only what the company chooses to report, and leaving can mean rebuilding history in a new system. In-house teams carry a similar risk when one person holds the reports and payer knowledge.

The middle path keeps the systems, logins, payer relationships, and data in the practice’s name, and adds capacity behind the team that works inside them. Oversight stays with the administrator. The outside team handles the volume, and every number in this guide stays available on demand. Our guide to red flags in RCM contracts covers the contract terms that protect this arrangement.

Conclusion

A new provider’s held claims are never really hidden. They sit in the practice’s own system the whole time, waiting for someone to sort the numbers differently. Revenue cycle metrics are only as useful as the practice’s ability to check them. Pulling these numbers from your own system, even once, shows what the practice can see today and what it is relying on someone else to tell it. Whether billing stays in-house, moves to an outside company, or sits somewhere in between, the practice should keep that visibility. Our guide to comparing your billing options and the medical billing services is a good next read.

About DataMatrix Medical

DataMatrix Medical has supported medical practices for over 25 years and works with hundreds of independent medical practices across 35+ specialties, with a fully US-based team. The billing team works within the practice’s existing systems, is EHR-agnostic, and charges a flat monthly fee based on annual revenue, not a percentage of collections. No long-term contracts. No hidden fees. DataMatrix Medical provides an end-to-end RCM solution for practices, with the industry’s only prior authorization denial-rate guarantee under 2.5%.

References

1. American Academy of Family Physicians. “Managing Practice Finances: Days in A/R, Adjusted Collection Rate, Denial Rate.” https://www.aafp.org/practice-operations/practice-finances
2. Healthcare Financial Management Association. “MAP Keys,” including Total Charge Lag Days (PB-4), Late Charges as a Percentage of Total Charges (CL-2), and Net Days in Credit Balance (AR-9). https://www.hfma.org/data-and-insights/map-initiative/map-keys/
3. Healthcare Financial Management Association. MAP Keys, 2023 Edition. https://www.hfma.org/wp-content/uploads/2023/10/2023-Edition-MAP-Keys.pdf
4. MGMA. “More than half of practices report credentialing-related denials on the rise in 2021,” MGMA Stat, August 26, 2021. https://www.mgma.com/mgma-stat/more-than-half-of-practices-report-credentialing-related-denials-on-the-rise-in-2021
5. Experian Health. The State of Claims: 2025. Survey of 250 healthcare professionals, fielded June 23 to July 3, 2025. https://www.experian.com/healthcare/resources-insights/thought-leadership/white-papers-insights/state-claims-report
6. Experian. “AI Offers Hope As Healthcare Providers Tackle Rising Claim Denials,” September 22, 2025. https://www.experian.com/blogs/news/2025/09/22/ai-offers-hope-as-healthcare-providers-tackle-rising-claim-denials/
7. DrChrono Support. “Charge Lag Report: An Overview.” https://support.drchrono.com/home/charge-lag-report-an-overview
8. NextGen Healthcare. “RCM Services for Multispecialty Practices” (infographic). https://www.nextgen.com/-/media/DAM/Collateral/Infographics/MS_RCMforMultispecialty_Infographic.pdf
9. U.S. Department of Health and Human Services, Office for Civil Rights. HIPAA FAQ 2082, citing 45 CFR 164.504(e)(2)(ii)(J). https://www.hhs.gov/hipaa/for-professionals/faq/2082/