Healthcare Revenue Cycle Data: Glossary of Important Metrics

The healthcare revenue cycle is expansive, with room for new acronyms at every stage. Office Ally has put together a helpful glossary of key RCM metrics. It's organized alphabetically for your convenience, so you can easily find the terms you need. 

A

Accounts Eligible for Screening

Identifies patient accounts eligible for screening. Facilities use various methods to determine if an account is eligible for screening. A patient may have been unresponsive for screening, or patient information may be inaccurate. Hospitals should screen as many accounts as possible, so a lower percentage is ideal for this metric.

Accounts Receivable (A/R) Days

The number of days between billing and collection (from the patient or a payer) on an account. Fewer days between rendering services and collecting payment is ideal, and a lower A/R number indicates more efficient collections. 

Appeal Success Rate

Reflects the percentage of denied claims that are successfully overturned upon appeal. A high appeal success rate indicates effective denial management processes.

Audit Resolution Time

Tracks the average time between receiving notice of an audit and closing said audit. The shorter the time, the more efficient a practice is at resolving audits without letting them take up too much staff time and energy.

B

Bad Debt Recovery Rate

Measures the amount of debt collected that was previously written off as uncollectible. Hospitals want to recover as much bad debt as possible. A higher rate signifies efficient collection strategies. 

Balance After Insurance (BAI) Ratio

Represents the monetary amount left in a patient’s account after insurance has covered its portion of the bill. This metric includes accounts that do not have indicated insurance coverage. The ratio is calculated by dividing total patient balances by total charges. It helps hospitals understand how much insurance is contributing to collections. 

C

Clean Claims Rate

Clean Claim Rate (CCR) measures the percentage of claims submitted without errors that pass through the system without requiring manual intervention. It does not take reimbursement into account; it only measures the number of accurate claims submitted and accepted.

Claim Resubmission Success Rate

Measures the effectiveness of resubmitting previously denied or rejected claims. A higher rate indicates robust correction and resubmission processes.

Contract Compliance Recovery Rate

Measures the rate at which a hospital successfully recovers contract-related underpayments from payers. Identifying money owed due to discrepancies in a payer contract is complicated and takes time. A higher rate of recovery shows the depth of a team’s experience and knowledge while maximizing revenue.

Cost-to-Collect Ratio

Cost-to-collect is a healthcare organization's total expense to collect payments for services rendered. This cost includes costs associated with billing, coding, collections, administrative staff, technology, and any other resources used throughout the revenue cycle. It reflects how much a provider spends to collect every dollar of patient revenue.

Cost of Conversion

Evaluates the expenses associated with converting a self-pay patient to an insured status, often through assistance programs. Lower conversion costs reflect efficient financial counseling services.

Coverage Expiration Capture Rate

Measures the effectiveness of identifying and updating expired insurance coverage information before claim submission. High capture rates reduce claim denials due to coverage issues.

D

Denial Rate by Payer

Breaks down a hospital’s denial rate by payer, including Medicare, Medicaid, and commercial entities.  Analyzing denial rates by payer helps identify patterns and address payer-specific issues.

Denial Probability Modeling

Involves using machine learning and algorithms to predict denials ahead of time. Hospitals can make better decisions and identify high-risk claims by determining the probability of denials to avoid impeding cash flow.

Denied Claim Recovery Rate

Tracks the percentage of denied claims that are appealed and ultimately recovered. Denials are unavoidable—even the best teams encounter them. But most are never appealed, resulting in a significant revenue leak. A higher denied claim recovery rate reflects effective denial management strategies.

E

Eligibility Confirmation Accuracy Rate

Measures the precision of verifying patient eligibility information before providing services. High accuracy rates minimize claim denials related to eligibility issues.

Eligibility Verification Rate

Assesses the proportion of patient encounters where insurance eligibility is verified before service delivery. Higher rates contribute to smoother billing processes and reduced denials.

F

First-Pass Acceptance Rate

Also known as the First-Pass Resolution Rate, it indicates the percentage of claims accepted and paid upon first submission without requiring corrections. A higher rate signifies efficient billing practices.

Front-End Collection Rate

Measures the percentage of patient payments collected at the point of service before care is provided. It encompasses registration, insurance verification, pre-authorization, and other up-front collections activities. Collecting an account as soon as possible means a higher percentage, which is ideal for this metric.

G

Gross Collection Rate (GCR)

Measures the portion of billed charges that are collected. It is calculated by dividing total payments received by total charges billed and expressed as a percentage. While it provides a broad view of collection efficiency, it doesn't account for contractual adjustments or write-offs. It should be analyzed in conjunction with other key metrics. 

H

Hidden Coverage Identification Rate

Evaluates the effectiveness of discovering undisclosed or unknown insurance coverage for patients. Enhancing this rate can lead to increased reimbursements and reduced patient bad debt.

I

Ineligibility Percentage

Represents the proportion of patients deemed ineligible for insurance coverage upon verification. Lower ineligibility percentages indicate effective patient intake and verification processes.

Insurance Discovery Rate

Measures the success in identifying existing insurance coverage that was initially unreported or unknown. Higher rates contribute to improved billing accuracy and revenue capture.

Insurance Reimbursement Speed

Shows how long it takes a payer to reimburse a claim. A longer turnaround time can jeopardize the health of the hospital by delaying payments and slowing down cash flow. Identifying areas for improvement helps hospitals work with insurance companies to speed up the process in the future.

L

Lag Days to Billing

The number of days between a patient receiving services and staff submitting a claim for those services to the correct payer. Longer lag times make patients nervous, increasing their anxiety around their account balance and increasing dissatisfaction. Reducing lag days accelerates cash flow and minimizes delays in reimbursement.

Lost Revenue Due to Underpayment

Measures the amount of expected funding lost from payers reimbursing less than the contracted or expected amounts. This number is significant. Becker’s Hospital Review found that providers lost 1-3% of revenue annually to underpayments. It can be time-consuming and difficult to work with payers to recoup these payments, but the less revenue lost, the better.

M

Medicaid Pending Conversion Rate

Assesses the success in converting patients with pending Medicaid applications to approved status. Higher conversion rates reduce uncompensated care.

N

Net Collection Rate (NCR)

Measures the percentage of total collectible revenue actually received after adjustments. A higher NCR indicates strong revenue cycle performance.

O

Outstanding Claim Rate

Tracks the percentage of claims still pending reimbursement. Lower rates indicate efficient claim processing.

Overpayment Recovery Rate

Measures the percentage of excess payments identified and recovered. Effective tracking ensures accurate financial reconciliation. A higher rate is ideal.

P

Payer Mix Analysis

Shows where hospitals receive revenue by analyzing the distribution of patient accounts covered by different insurance payers, including government and commercial. This metric has several applications. Knowing which insurers are most used in a hospital’s patient population helps with financial counseling services and resource allocation. Additionally, some payers charge different rates for the same services, and understanding cost differentiators can help negotiate contracts.

Payer Reimbursement Timeliness

Assesses how quickly different payers process and reimburse claims. Monitoring this helps address slow-paying insurers and provides staff with tangible data during negotiations. 

Point-of-Service (POS) Collection Rate

Measures the percentage of patient financial responsibility collected at the time of service. Ideally, this number should remain high.

Q

Query Response Time for Denials

Tracks how quickly payer queries are resolved, impacting claim resolution times. The faster, the better, indicating staff have available time to attend to questions and keep claims moving.

R

Real-Time Eligibility Resolution Rate

Evaluates how effectively patient eligibility issues are resolved in real-time, reducing claim denials.

Revenue Integrity Compliance Score

This score reflects adherence to billing and coding regulations, reducing compliance risks. A higher score signifies well-trained billing and revenue cycle management teams.

S

Self-Pay Collection Rate

Measures the percentage of self-pay patient balances successfully collected. A higher number contributes to a healthier bottom line.

Submit to Approval Rate

This rate tracks the percentage of submitted claims that receive approval without revisions. Correcting claims takes up staff time and resources, so a good rate should remain high.

T

Time to Reimbursement

Measures the average time from claim submission to payment receipt. As with A/R Days and other time-line related RCM metrics, the shorter the better.

U

Uncompensated Care Rate

Measures the total amount of unpaid bills for services rendered when revenue was expected. These bills may remain unpaid due to payer issues, lack of coverage, patient financial hardship or a host of other reasons. Uncompensated care costs hospitals hundreds of billions annually, and a lower amount of uncompensated care indicates a healthy revenue cycle.

W

Write-Off Rate

This rate measures the percentage of billed charges written off as uncollectible or bad debt. Bad debt should be avoided if possible.

Y

Year-Over-Year Revenue Growth Rate

Shows how a hospital’s revenue is changing on an annual basis, providing insight into financial performance trends. To calculate, subtract the previous year’s revenue from the current year, then divide that number by the previous year’s revenue and multiply by 100 to express as a percentage. This metric helps hospitals understand how their revenue is changing over time to help make strategic decisions about the future. 

Z

Zero-Balance Account Review Rate

Evaluates how frequently zero-balance accounts are reviewed for errors or missed revenue opportunities. This process can feel time-consuming, but it’s an important action to avoid revenue leakage.

Optimizing your revenue cycle performance requires the right tools and insights. Office Ally's revenue recovery solutions can help providers streamline processes, reduce uncompensated care rates and maximize reimbursements. Explore Office Ally’s suite of revenue recovery tools.