Practice Revenue Cycle Audit
A full diagnostic of your billing and revenue cycle — scorecard, trends, denials, write-offs, appeals and a practice-specific SWOT — so you know exactly where revenue is leaking before you fix it.
Free with every engagement: Before we take over a single claim, we run a full Practice Revenue Cycle Audit against your last 12 months of billing data — at no cost. Request your free audit →
8 Areas Assessed
Every audit follows the same structured scope, so results are consistent, comparable month over month, and easy for your team to act on.
- Practice Scorecard — a single-page summary of the KPIs that matter: gross and net collection rate, days in AR, denial rate, first-pass resolution rate and clean claim rate.
- Billing & Revenue Trend Analysis — a 12-month view of charges, payments, adjustments and net revenue, so seasonal patterns and drift are visible instead of hidden in monthly noise.
- Collection % vs. Specialty Benchmark — your gross and net collection percentage measured against the specialty average — for example, the cardiology benchmark — so you know if you're ahead or behind peers, not just last month.
- Top Insurance Accounts Receivable — your highest-dollar and oldest-aging payer balances ranked, so follow-up effort goes where the money actually is.
- Top Denial Codes & Changes Required — your leading CARC/RARC denial codes ranked by dollar impact, paired with the specific front-end or coding change needed to stop each one recurring.
- Write-Offs & Adjustments Review — every write-off category (contractual, timely filing, small balance, bad debt) broken out and checked for approvals, so nothing collectible is being adjusted off in error.
- Appeal Efficacy Review — appeal volume, turnaround time and overturn rate by payer, showing which appeal strategies are actually recovering revenue and which are wasted effort.
- Missed Revenue Opportunities — underpayments, uncoded/uncharged services, timely-filing losses and stalled claims quantified in dollars, not just flagged.
SWOT Analysis
The audit closes with a practice-specific SWOT — Strengths, Weaknesses, Opportunities and Threats — that ties the seven data areas above back to a plain-language action plan your team can actually execute.
Strengths
What's already working well — payer mix, clean claim rate, or a collections process that's outperforming benchmark.
Weaknesses
The specific bottlenecks costing revenue right now — a denial pattern, a stalled AR bucket, an under-negotiated payer.
Opportunities
Underpayments, uncoded services and preventable denials that translate directly into recoverable revenue.
Threats
Payer rule changes, timely-filing exposure and shifting authorization requirements that could erode revenue next.
What You Receive
At the end of the engagement you get a single report covering all eight assessed areas plus the SWOT — in plain language, with dollar figures attached to every finding, not generic commentary. Where an issue is fixable upstream (a coding pattern, a front-desk eligibility gap, a payer-specific denial trigger), the report names the fix, not just the symptom.
Specialties We Support
Benchmarks and denial patterns vary by specialty, so every audit is run against the correct peer group — not a generic industry average.
How Each of the Eight Areas Is Measured
Each area has a defined data source and calculation, so results can be repeated next quarter and compared like for like.
| Area | Data used | How it is measured |
|---|---|---|
| Practice scorecard | Charges, payments, adjustments, claim counts, AR aging | Standard KPIs with written formulas (see below), by month and by payer |
| Billing and revenue trend | Twelve months of charges, payments, adjustments, net revenue | Month-over-month and rolling trends; seasonality separated from drift; payer mix shifts |
| Collection versus benchmark | Gross and net collection rate | Compared to a peer group matched on specialty, size and payer mix, not to a generic average |
| Top insurance AR | AR aging by payer, claim-level where possible | Payers ranked by dollars and by share over 90 days; oldest high-value claims listed |
| Top denial codes | 835 remittances with group codes, CARC and RARC | Pareto ranking by dollars and count; each code mapped to cause and owner |
| Write-offs and adjustments | Adjustment detail with reason codes and approver | Category totals, trend, share validated against fee schedules or policy |
| Appeal efficacy | Appeal log, resolution dates, outcomes | Appeal rate, overturn rate, days to resolve, dollars recovered, by payer and denial type |
| Missed revenue | Schedule, charges, 835 versus contract, aged filing risk | Quantified in dollars: unbilled encounters, underpayments, timely-filing losses, stalled claims |
Scorecard KPI Formulas and Commonly Cited Targets
Targets below are commonly cited industry reference points. They vary by payer mix, specialty and contract terms, and they are not guarantees or performance claims. The audit explains which reference applies to your practice.
| KPI | Formula | Commonly cited reference (varies) |
|---|---|---|
| Gross collection rate | Payments / total charges | Depends heavily on charge master markup; useful mainly against a specialty peer group |
| Net collection rate | Payments / (charges minus contractual adjustments) | 95% or higher |
| Days in AR | Total AR / (charges for the period / days in the period) | Commonly 30 to 40 days |
| Denial rate | Denied claims (count or dollars) / claims submitted (count or dollars) | Commonly under 5%, though many practices report higher |
| First-pass resolution rate | Claims paid correctly on first submission / claims submitted | Roughly 90% or higher |
| Clean claim rate | Claims accepted without edits or rejections / claims submitted | 95% or higher |
| AR over 90 days | AR aged 91+ days / total AR | Commonly under 15 to 20 percent |
Gross and net collection rate answer different questions. Gross collection rate is distorted by how high charges are set above contracted rates, so a low number does not necessarily mean a problem. Net collection rate removes expected contractual write-downs and shows how much of the collectible amount was actually collected. A falling net rate is a real warning sign.
Reading Your Scorecard: Healthy vs. Warning Patterns
A single number rarely tells you much. The pattern across several does.
| Pattern | What it suggests | Where the audit looks next |
|---|---|---|
| Clean claim rate low, denial rate high | Front-end or scrubber problem; errors enter before submission | CO-16 and CO-4 denials; registration and charge entry |
| Clean claim rate fine, denial rate high | Claims are formatted correctly but not payable: authorization, medical necessity, coverage | CO-197, CO-50, CO-27 and CO-109 by payer |
| Denial rate fine, days in AR high | Slow payers or weak follow-up rather than errors | Aging by payer; follow-up cadence; claim status checks |
| Net collection rate falling while denial rate flat | Underpayments, write-off creep or posting errors | 835 versus contract; adjustment reasons |
| High AR over 90 days concentrated in one payer | Payer-specific issue such as a rule change or enrollment problem | Payer correspondence; credentialing and enrollment status |
| Strong averages, one weak provider or location | Local workflow or documentation issue | Provider-level coding and charge lag |
Denial Analysis Method
The denial review is the part of the audit that most directly produces a to-do list. It follows a fixed method:
- Pull and normalize the 835 data. Remittance lines are grouped by claim adjustment group code: CO (contractual obligation), PR (patient responsibility), OA (other adjustment), PI (payer-initiated reduction) and CR (correction and reversal). CO and PI lines that are not routine contractual write-downs are denial candidates; PR lines are patient balances, not denials.
- Rank by dollars and by count. A Pareto view shows which few codes explain most of the lost dollars. Count and dollars can rank differently, so both are shown.
- Split by payer, CPT and provider. A code that looks random overall is often a single payer or procedure.
- Classify as preventable or not. Each denial is assigned to a cause: front end, coding or documentation, billing or submission, payer error, or clinical or patient factors.
- Map to an owner and a change. Each top code gets a named owner and a specific process change, not a general recommendation.
| CARC | Typical owner | Process change the audit usually recommends |
|---|---|---|
| CO-16 | Registration and billing | Validate subscriber and insured data at check-in; tune scrubber rules |
| CO-18 | Billing | Check claim status before resubmitting; block duplicate claim creation |
| CO-29 | Billing manager | Rejection worklist worked daily; filing-limit alerts by payer |
| CO-50 | Clinical documentation and coding | Link diagnosis to payer medical-necessity policy; improve note support |
| CO-97 | Coding | Review NCCI edits and modifier use before billing |
| CO-109 | Front desk | Verify primary payer and coordination of benefits before the visit |
| CO-197 | Scheduling and authorization | Authorization check before the appointment, not after the claim |
| CO-252 | Billing and clinical staff | Attach required documentation per payer rules at submission |
Write-Off and Adjustment Review
Write-offs are where collectible money can disappear without ever appearing on a denial report. Each category is reviewed against a different test:
| Category | Test applied | Red flag |
|---|---|---|
| Contractual (commonly CO-45) | Does the adjustment equal charge minus the contracted allowed amount? | Contractual adjustment larger than fee schedule implies; denials posted as contractual |
| Timely filing (CO-29) | Was the claim submitted or corrected inside the payer's limit? | Any amount here is a preventable loss and is escalated |
| Small balance | Is there a written threshold and an approver? | Write-offs above threshold or without approver |
| Bad debt | Was reasonable collection effort made and documented? | Balances moved to bad debt before statement cycles finished |
| Administrative and courtesy | Does a written policy authorize it? | Frequent unexplained adjustments by a single user |
| Credit balances | Are credits identified and refunded within policy and law? | Aged credits sitting on accounts |
Appeal Efficacy and Benchmarking Cautions
Appeal reporting separates effort from results. The audit measures the share of eligible denials appealed, overturn rate, days to resolution and dollars recovered, by payer and denial type. A practice that appeals little may be leaving recoverable money behind. A practice that appeals a lot with low overturn rates may be spending effort on denials that cannot be won. Appeal deadlines vary widely by payer and contract; Medicare fee-for-service allows 120 days for a first-level appeal (redetermination).
Benchmarking needs care. A fair comparison uses a peer group matched on specialty, practice size, region and payer mix, and the definitions behind the benchmark must match yours. Published benchmark data, such as that from MGMA, can be a useful reference, but two practices can calculate the same-named KPI in different ways. The report states its definitions so you can judge the comparison yourself.
An Illustrative Scorecard and Action Plan
Illustrative only. This is a hypothetical practice, not a client result. It shows how the scorecard reads and how the SWOT becomes a plan.
| Metric | Hypothetical practice | Commonly cited reference | Reading |
|---|---|---|---|
| Clean claim rate | 91% | 95% or higher | Below reference; look at front-end edits |
| Denial rate | 9% | Commonly under 5% | High; Pareto the top codes |
| Net collection rate | 90% | 95% or higher | Gap worth tracing to specific causes |
| Days in AR | 52 | Commonly 30 to 40 | Slow; check aging by payer |
| AR over 90 days | 31% | Commonly under 15 to 20 percent | Follow-up gap; one payer may drive it |
Reading these together, a high denial rate with a low clean claim rate points to front-end and submission problems. A SWOT built from this would list strong provider productivity as a strength, authorization and rejection handling as weaknesses, underpayment recovery as an opportunity, and payer rule changes as a threat. The action plan then follows a fixed order: recover items inside filing or appeal windows, fix the top two or three preventable denial causes, set follow-up ownership on aged AR, then re-run the same scorecard to check the change.
Frequently Asked Questions
What does the Practice Revenue Cycle Audit cost?
The audit is free and comes with no obligation. We use it to scope any follow-on engagement accurately, and you keep the report either way.
What data do you need from our practice?
Typically 12 months of billing system exports — charges, payments, adjustments, AR aging and denial/remit data. We work with whatever your practice management or EHR system can export; no new software required.
How long does the audit take?
Most audits are completed within 5–7 business days of receiving complete data, with a walkthrough call to review findings and the SWOT with your team.
Is this the same as the Revenue Cycle Health Check?
The Health Check maps revenue leakage across five process areas. The Practice Revenue Cycle Audit goes deeper on the financial data itself — scorecard, trends, benchmarking, AR, denials, write-offs, appeals and a SWOT — and is typically the next step after a Health Check.
Which benchmark source do you compare against?
The report compares to a peer group matched on specialty, size and payer mix, and states the definitions used. Published sources such as MGMA data can be a reference, but any comparison is only as good as the match in definitions and peer group.
What is the difference between gross and net collection rate?
Gross collection rate is payments divided by total charges and depends heavily on how high charges are set. Net collection rate is payments divided by charges minus contractual adjustments, which isolates how much of the collectible amount you actually received.
What if our data is incomplete or messy?
The audit begins with reconciliation, so data gaps are found early. Where something cannot be verified, the report says which conclusions are limited rather than guessing.
Do you need direct access to our practice management system?
Not necessarily. Report exports and clearinghouse files are usually enough. Any sharing of protected health information should happen under a HIPAA Business Associate Agreement and be limited to the minimum necessary.
How often should a practice repeat this audit?
Many practices review the core scorecard monthly and run a full audit at least annually, or after a major change such as a new PM system, a new payer contract, or a staffing change in billing.
Know Exactly Where Revenue Is Leaking
No cost, no obligation — just a clear picture of your practice's revenue cycle, benchmarked and prioritized by dollar impact.
Request a Practice Revenue Cycle Audit →