By Lemuel Areglo, CPC | Director of Revenue Cycle Management Services
Key Takeaways
- Many oncology practices face a visibility gap rather than a billing crisis. When cash flow is inconsistent, the first step is identifying which oncology-specific metrics are underperforming.
- High denial rates can severely impact revenue. Top-performing oncology practices maintain denial rates below 5% by implementing proactive measures and efficient appeals processes.
- Claims should be submitted within 24 hours of patient encounters. Delays in claims submission extend the payment timeline and can accumulate across multiple claims.
- Monitoring relevant KPIs is essential for assessing the performance and efficiency of your oncology billing operations.
If your oncology practice is tracking revenue cycle performance but still experiencing slow cash inflow, the issue often lies in visibility rather than effort. Many practices are not facing a billing crisis; they are dealing with a measurement gap.
Here are several key performance indicators (KPIs) that oncology practices should focus on to enhance their revenue cycle management, along with benchmarks and necessary adjustments to achieve them.
Table of Contents
How These KPIs Were Selected
Not every billing metric warrants your attention. We concentrated on those that directly impact revenue, are manageable by billing services, and are relevant to oncology practices. Metrics that do not affect cash flow, staff workload, or compliance were excluded from our focus.
1. Days in Accounts Receivable
This metric indicates the time taken to convert a patient visit into cash. High-performing oncology practices aim to keep this under 30 days. If your days in accounts receivable exceed 50, it often points to issues such as delayed claim submissions or inadequate follow-up on aging accounts.
The solution is straightforward: ensure same-day claim submissions, verify insurance eligibility prior to appointments, and actively monitor accounts that are 61–90 days old.
2. Clean Claim Rate
Each claim that is denied costs time and delays payment by days or even weeks. The industry standard for clean claims is 95% or higher, with top billing operations achieving rates of 98%.
The key to achieving this is thorough pre-submission scrubbing, which involves identifying missing modifiers, incorrect codes, and payer-specific requirements before the claim is submitted. This foundational work is essential for maintaining a healthy cash flow.
3. Denial Rate
Currently, denial rates in the industry have risen to between 12% and 15%. High-performing oncology practices, however, maintain rates below 5%. This discrepancy represents a significant amount of revenue that practices may either recover slowly or write off entirely.
To address this, oncology practices should focus on two strategies: prevention (including eligibility checks, tracking prior authorizations, and ensuring accurate coding) and recovery (through appeals, analyzing denial patterns, and addressing root causes to prevent future denials). Both strategies are crucial, yet many practices only implement one.
4. Net Collection Rate
This metric reveals the percentage of the revenue that is actually collected. A net collection rate below 90% indicates that your practice is missing out on revenue due to underpayments, unbilled charges, or unresolved denials.
Aim for a net collection rate of 95% or higher. Achieving this requires conducting charge capture audits, implementing automated underpayment detection, and diligently working on accounts until they are fully paid, rather than merely submitted.
5. First-Pass Resolution Rate
This metric assesses the efficiency of your billing process by measuring how often claims are paid correctly on the first submission—without rejections, underpayments, or appeals. A low first-pass resolution rate indicates that billing staff are spending excessive time resolving issues instead of processing new claims.
Target a first-pass resolution rate of 95% or higher. Improving this metric often uncovers specific failure points that, once addressed, can enhance overall billing efficiency.
6. Charge Capture Rate
This metric represents preventable revenue loss. It indicates that services were provided and documented, but not billed.
Missed charges often occur in ancillary services, supplies, and procedures that were documented but not coded. A proficient billing service can mitigate this by reconciling clinical notes with submitted charges and flagging any discrepancies before filing deadlines.
7. Patient Collection Rate
With patients now responsible for a larger share of their healthcare costs, the average collection rate for patient balances ranges from 34% to 48%. This issue is less about billing and more about effective communication.
Providing clear, understandable statements, offering practical payment plan options, and proactively reaching out to patients before balances age into bad debt are essential strategies. While these practices are not revolutionary, many oncology practices lack the systems to implement them consistently.
8. Claims Submission Speed
Medicare has a 14-day payment floor. Claims should be submitted within 24 hours of a patient encounter to avoid unnecessary delays in payment.
The bottleneck often occurs at the transition between clinical documentation and billing. When these systems are integrated, delays are minimized. Conversely, manual data transfers can lead to errors and inefficiencies.
9. Cost to Collect
This metric is often overlooked. If your practice spends 10 cents to collect every dollar, it significantly impacts your operating margin, which may not be evident in monthly reports. The target should be under 5%.
Outsourcing billing does not automatically reduce this cost; however, a competent billing service can help lower it by distributing technology and staffing costs across a broader client base than any single oncology practice could justify.
A Quick Reference Guide
KPI
Target
Primary Lever
Days in A/R
<30 days
Faster submission and follow-up
Clean Claim Rate
≥95%
Pre-submission scrubbing
Denial Rate
<5%
Prevention and appeals
Net Collection Rate
≥95%
Persistent A/R work
First-Pass Resolution
≥95%
End-to-end tracking
Charge Capture Rate
≥98%
Documentation audits
Patient Collection Rate
>50%
Clear statements and payment plans
Claims Submission Speed
<24 hours
Same-day processing
Cost to Collect
<5%
Process efficiency
Where to Start
Focus on one or two KPIs at a time, particularly those where your practice is furthest from benchmarks. If your denial rate exceeds 10%, prioritize that issue. If claims are delayed for several days before submission, address that next.
A reputable billing service will establish baseline metrics before promising results and provide regular updates thereafter. If they cannot provide your current denial rate, that should raise a red flag.
Oncology Billing Services integrates seamlessly with clinical documentation, which significantly improves metrics such as clean claim rates and submission speed. This eliminates the need for data re-entry and manual handoffs. When the provider finalizes the encounter, billing processes begin automatically. Such structural improvements lead to sustainable enhancements in performance, not just temporary gains.
Curious about your clinic’s performance? Establishing a baseline RCM assessment is the first step.
Lemuel Areglo, CPC
is the Director of Revenue Cycle Management Services at WRS Health, bringing nearly 15 years of experience leading medical billing, coding, credentialing, and revenue cycle operations across the healthcare industry. Lemuel’s expertise spans the full revenue cycle, including claims management, denial resolution, payment posting, accounts receivable, and practice operations. He has extensive experience supporting various specialties, including oncology, psychiatry, physical therapy, pain management, internal medicine, orthopedic surgery, speech therapy, and sleep medicine.
