Download NCR Calculator PDF Guide
Form not loading? Click here to reload the form
In today’s ever-evolving healthcare landscape, ensuring the financial health of a medical practice is just as critical as providing quality patient care. One of the key performance indicators (KPIs) that should be closely monitored is the Net Collection Rate (NCR). This metric helps gauge how effectively a practice is collecting revenue from the services provided.
Let’s walk through the importance of the Net Collection Rate, strategies to improve it – and give you a free NCR calculator PDF guide to reference whenever you need it! Whether you manage a small independent practice or a large multi-specialty group, understanding the NCR formula is crucial for maintaining a financially sustainable operation.
The Net Collection Rate (NCR) measures the percentage of collectible revenue a medical practice actually receives. Unlike the Gross Collection Rate, which compares total collections to total charges, the NCR provides a more accurate picture of revenue cycle efficiency by factoring in contractual adjustments.
A high NCR indicates that a medical practice is effectively collecting revenue, while a low NCR signals potential issues with billing, payor contracts, and/or patient collections. Medusind clients see an average Net Collection Rate of 98% or higher, surpassing the MGMA benchmark of 95%. At Medusind, we specialize in streamlining revenue by identifying and correcting processes – and we’re sharing our proven NCR calculator with you!
Here are 3 tips to keeping your NCR formula consistent:
To ensure that your NCR calculator is accurately measuring performance, consider using a rolling 12-month schedule to calculate your Net Collection Rate. As with all medical billing indicators, performance will be influenced by payor mix, specialty, and level of automation in your practice’s billing and collections workflow.
If the NCR formula shows that your NCR is lower than desired, consider implementing the following strategies:
The Net Collection Rate is a critical metric that provides insight into a medical practice’s financial health and medical RCM efficiency. By calculating and monitoring NCR, medical practices can identify areas for improvement and implement strategies to optimize collections.
Ensure you have access to accurate financial reports from your practice management or billing system. The required data includes:
Subtract contractual adjustments from total charges:
Total Collectible Charges = Total Charges - Contractual Adjustments
Divide total payments received by total collectible charges and multiply by 100 to express it as a percentage:
NCR = (Payments Received / Total Collectible Charges) x 100
Example calculation
First, compute the total collectible charges:
Total Collectible Charges = 500,000 - 150,000 = 350,000
Next, calculate the Net Collection Rate:
NCR = (320,000/350,000) x 100 = 91.4%
This means this hypothetical practice is collecting 91.4% of what it should, indicating room for improvement in medical RCM efficiency and oversight.
Use our proven NCR calculator to get your Net Collections Rate. This will help you understand if your practice has revenue roadblocks. As you’ve seen, there are a number of reasons your NCR can be low, so we recommend doing a full audit of your medical RCM processes if your NCR is below 90%.
If you use the NCR formula and your NCR is lower than expected, you aren’t alone. Take proactive steps today and contact Medusind today. Your practice’s profitability depends on it!
Form not loading? Click here to reload the form