Quick answer: Ask for a five-number report every month: net collection rate, denial rate by payer and reason, AR (accounts receivable) days over three months, clean claim rate, and patient AR aging. Then look for denial root causes getting closed and less billing work landing on your staff. If the same problems repeat month after month, sit down with your billing team before you think about replacing them.
In this episode of the NatRevMD Podcast, Dr. Heather Signorelli explains why the costliest billing relationship is not the one that is clearly failing. It is the one that quietly underdelivers. This is Part 2 of a two-part series, and it lays out a simple operating model that catches the problem early.
Why quiet underperformance costs so much
Picture a practice collecting $400,000 a month. Its net collection rate runs three points below where it should be. That gap is about $12,000 a month, or $144,000 a year.
Nobody escalates $12,000. It doesn’t trigger a phone call. So it just leaves, month after month. That’s why price alone is a poor way to pick a billing partner. A low percentage fee can cost far more if collections slip, or if your own team spends hours keeping the account clean.
The five-number report to ask for every month
Most monthly billing reports show collections by payer, claims submitted and a denial percentage. That is activity data, not performance data. Instead, Dr. Signorelli suggests asking for these five numbers:
- Net collection rate: what you collected compared with what you were owed after contractual adjustments.
- Denial rate by payer and reason code: so you can see which payers and which errors drive denials.
- AR days, trended over three months: the direction matters as much as the number.
- Clean claim rate: how many claims go through without being rejected.
- Patient AR aging by segment: how old your patient balances are.
Ask for this report this week, not at the next scheduled review. How fast it arrives tells you as much as what is in it. For benchmarks on these numbers, see our guide on whether to switch billing companies.
Three green flags and three warning signs
A billing partnership needs both leading and lagging indicators. Net collection rate and AR are lagging. They show up late. Leading indicators move first, for example regular meetings, denials reaching the practice, and claims touched every 21 to 30 days.
| Green flags | Warning signs |
|---|---|
| Denial root causes get found and closed, not just reworked | The monthly report is missing, unreadable or vague |
| Billing work on your side gets easier over time | Problems get explained after they compound, not flagged before |
| Leading indicators improve before the headline numbers do | The same denial patterns repeat month after month |
You will never have zero denials. The question is whether someone fixes the cause. For example, if you see 100 eligibility denials, someone should tell the front desk to retrain on eligibility. Touching the same claim again and again without changing anything is not denial management.
Agree on who does what, every week and month
Most billing relationships never write down roles. So set a weekly and monthly rhythm before the relationship starts, not after something goes wrong. The table below shows a shared operating model from the episode.
| Area | Practice side | Billing partner side |
|---|---|---|
| Chart closure | Providers sign charts within 24 to 48 hours | Tracks chart closure weekly and flags delays |
| Front desk | Verifies eligibility, collects copays, gets authorizations before the visit | Trains the front desk and reports errors found in claims |
| Denials | Backs the billing team when a payer escalation needs a physician | Owns denial follow-up and reports root causes monthly |
| Patient balances | Sets payment expectations at scheduling and check-in | Runs a patient AR workflow and reports aging by segment |
| Reporting and meetings | Reviews the report and attends the weekly or biweekly review | Runs the meeting with an agenda and proposes solutions |
When something feels off, the first move is a conversation, not a search for a replacement. Share what you see, such as rising denials or AR. Then agree on fixes with dates attached. Replacement makes sense when both sides made specific, dated commitments and they still weren’t kept after a fair period. If you reach that point, read our guide to switching medical billing companies.
Frequently asked questions
It should include net collection rate, denial rate by payer and reason code, AR days trended over three months, clean claim rate, and patient AR aging by segment. Collections by payer and claim counts alone show activity, not performance. If you can’t read the report or no one answers your questions about it, treat that as a warning sign.
On a practice collecting $400,000 a month, three points of net collection rate is about $12,000 a month. Over a year that adds up to $144,000. Because the monthly amount looks small, it rarely gets escalated.
Usually not as a first step. Start with a clear conversation about what you see, and agree on specific fixes with dates. Replacement is the right call when those dated commitments are not kept after a fair period.
A short, consistent weekly or biweekly meeting works best for most practices. During a transition you may meet more often, then less as things settle. A monthly review of the report should sit on top of that.
Want a second opinion on your numbers? Request our free metrics audit. You send your monthly numbers, and we give you a physician-led read on what is working and where to look first. You can also track your KPIs (key performance indicators) each month with our free Practice Financial Health Dashboard.
