ANSWERS · PRACTICE FINANCE

Is my practice financially healthy? The benchmarks that matter.

A financially healthy independent practice collects most of what it's owed, keeps A/R young, and keeps overhead in line for its specialty. The numbers that matter most: net collection rate above ~95%, days in A/R under ~40, first-pass claim rate above ~90%, denial rate under ~5–10%, and an over-90 A/R bucket under ~15–20%.

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What actually matters

  • Net collection rate: of what you were contractually owed, how much did you actually collect? Below 95% means money is leaking
  • Days in A/R: under 40 is strong; rising days signal a follow-up or denial problem
  • First-pass resolution rate: above 90% means clean claims; below signals front-end issues
  • Denial rate and denial mix: under 5–10%, and know which reason codes drive it
  • Over-90 A/R: under 15–20% of total; a fat over-90 bucket is unworked denials and underpayments aging toward write-off
  • Overhead ratio: benchmark to your specialty — what's healthy for primary care differs from a procedural practice

Common questions

What is a good net collection rate?

Above 95% is healthy. Net collection rate measures what you collected against what you were contractually allowed to collect (after legitimate write-offs), so it isolates true leakage from contractual adjustments.

Where Volari fits: The gap between your net collection rate and 100% is where Volari looks — the denied and underpaid dollars you were owed but never collected.

Related answers
How do I lower my practice's denial rate?How do I reduce days in A/R?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?How do I fix my prior-authorization workflow?

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