ANSWERS · PRACTICE FINANCE

What is a good net collection rate, and how do I calculate it?

Net collection rate measures how much of what you were contractually owed you actually collected, after legitimate write-offs. Above 95% is healthy; below that, money is leaking to denials, underpayments, or uncollected balances. You calculate it as payments divided by charges minus contractual adjustments.

Practice OwnerPractice ManagerBilling Lead

What actually matters

  • Formula: net payments ÷ (charges − contractual adjustments), over a period
  • Above 95% is healthy; below that signals real leakage
  • It isolates true leakage from contractual write-offs, unlike gross collection rate
  • The gap from 100% is denials, underpayments, and uncollected patient balances
  • Track it monthly and by payer to see where the leak is

Common questions

What's the difference between gross and net collection rate?

Gross uses total charges, which are distorted by fee-schedule differences. Net uses allowed amounts, so it reflects what you could actually have collected — a far more honest measure of leakage.

Where Volari fits: The gap between your net collection rate and 100% is exactly where Volari looks.

Related answers
How do I lower my practice's denial rate? →How do I reduce days in A/R? →How do I read an EOB or 835 remittance? →How do I know if I'm being underpaid by insurers? →In-house billing vs. outsourcing: which is right for my practice? →How do I renegotiate payer contracts for better rates? →

See the revenue you're owed but never collected.

A free assessment shows your real recoverable number from denied and underpaid claims. No risk, paid only on what we recover.

Get your free assessment →Watch the agents work →
Volari AI · answers for independent practices · all answers →