The 4 RCM KPIs That Predict Financial Performance
It’s easy to get buried in healthcare billing metrics. But in revenue cycle management, not all KPIs are created equal.
Some show you where you’ve been. Others show you where you’re headed.
If you want to improve margin, reduce delays, and scale your operations, these are the four KPIs every hospital and medical group should be tracking.
1. Clean Claim Rate
Clean claim rate measures how many claims are accepted by payers the first time without edits or rework.
Why it matters: Every reworked claim costs time and staff resources—and increases the risk of denial.
Target: 95–98% or higher
Fix it by: Improving documentation, coding accuracy, and front-end checks
2. Denial Rate
This tells you what percentage of claims are denied by payers before payment.
Why it matters: Denials slow down revenue and often result in lost payments.
Target: Under 5%
Fix it by: Identifying top denial reasons by payer and building a prevention workflow
3. Days in Accounts Receivable (AR)
Days in AR measures how long it takes, on average, to collect payment.
Why it matters: High AR means slow cash flow and potential write-offs.
Target: Under 40 days (or specialty-adjusted)
Fix it by: Streamlining follow-up and routing high-risk accounts earlier
4. First-Pass Resolution Rate (FPRR)
This metric shows how often claims are paid in full after the first submission.
Why it matters: It reflects the efficiency of your entire RCM process, end-to-end.
Target: 85%+
Fix it by: Coordinating between billing, coding, and front-end intake to avoid errors
What These KPIs Actually Do
Together, these four KPIs give you a real-time snapshot of how well your RCM process is performing. They help:
Spot revenue leaks early
Justify staffing or outsourcing decisions
Hold vendors accountable
Identify operational gaps before they impact cash flow
If you’re not tracking these yet, you’re operating on assumptions—not insights.