Last updated: August 2026 · Reading time: 12 minutes

Your medical billing company is underperforming if three or more of these are true right now:

• Net collection rate under 95%
• Days in A/R over 40
• More than 15% of your A/R is sitting past 90 days
• Denial rate above 5%
• You can’t get an aging report the same day you ask
• Nobody has called you proactively in 30 days
• They can’t tell you why a specific payer denied a specific code

One of these is a bad month. Three is a pattern. Five is a structural failure, and every week you wait, more of your money crosses the 90-day line where it stops being collectible.

But knowing is not the same as proving. The rest of this article is the part nobody else gives you: how to build an evidence file that holds up — before you confront anyone, and without them stalling you.

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The 7 Numbers That Tell You Everything

Here’s the trap. Your billing company sends a monthly report. The report looks fine. Claims went out. Money came in. The chart has a nice upward line.

None of that tells you what you didn’t collect.

A billing company can submit every claim on time and still lose you $30,000 a month by not fighting denials, not catching underpayments, and letting old claims quietly age out. The monthly summary won’t show it. These seven numbers will.

Table 1: Your Diagnostic Benchmarks

Metric	Healthy	Warning	Failing	Source
Net Collection Rate	96–97%+	93–95%	Under 92%	MGMA guidance: 96–97% signals effective collection; 95% or below means room for improvement
Days in A/R	30–35	36–45	Over 50	MGMA Cost & Revenue Survey: ~36 days median for better performers; HFMA MAP Keys target under 40
A/R over 90 days	Under 15%	15–20%	Over 20%	MGMA benchmark range: 12–15%
Denial rate (first pass)	Under 5%	5–8%	Over 10%	AAFP reports industry average at 5–10%
Clean claim rate	95%+	90–94%	Under 90%	Industry standard
Charge lag (DOS → submission)	Under 3 days	3–7 days	Over 7 days	Operational standard
Payment posting turnaround	Under 48 hrs	2–5 days	Over 5 days	Operational standard

Print that table. You’ll use it in the next section.

Net Collection Rate — the one they hide

Net collection rate is the only metric that answers the real question: of the money you were actually owed, how much did you get?

The formula: payments ÷ (charges − contractual adjustments) × 100.

That subtraction matters. It strips out the discounts you agreed to when you signed payer contracts. What’s left is pure performance. If your NCR is 88%, twelve cents of every dollar you legitimately earned never arrived — and it wasn’t the contract’s fault.

Here’s the part vendors don’t volunteer. Ask for NCR by payer, not as one blended number. A single aggregate figure of 94% can easily hide one payer sitting at 78%. That payer is where your money is going, and a blended report is specifically designed so you can’t see it.

If your billing company only reports aggregate NCR, that’s not laziness. That’s the report working as intended.

Days in A/R, and why 40 is not a pass mark

Days in A/R = total A/R ÷ average daily charges. It’s how long your money sits before it reaches you.

MGMA’s data puts better-performing physician practices around 36 days, and HFMA’s MAP Keys set the target under 40. But treat 40 as a ceiling, not a goal.

Specialty changes the math. Primary care should run tighter — roughly 28–35 days. Surgical specialties run longer, often 40–55, because pre-authorization and case-rate adjudication genuinely take more time. Behavioral health lands around 30–40.

So don’t panic at 42 days in orthopedics. Do panic at 42 days in primary care. And if you’re consistently above 50 in any specialty, you don’t have a slow payer problem. You have unworked claims.

A/R over 90 days — the line where money dies

This is the metric that should scare you most, because it’s the one that becomes permanent.

MGMA’s benchmark range is 12–15% of total A/R in the 90+ bucket. Past 90 days, collection probability falls off a cliff. Past 120, most practices write it off.

Pull your aging report and look at the 90+ column as a percentage of the total. If it’s climbing quarter over quarter, your billing company has quietly triaged your old claims to the bottom of the pile. Working a fresh claim is fast and profitable for them. Working a 100-day denial is slow and unprofitable for them.

Under a percentage-of-collections contract, their incentive and yours diverge exactly at the point where your claim gets hard. That’s not a conspiracy. It’s math. But you should know it’s happening.

Clean claim rate vs first-pass resolution rate

Watch this one closely, because it’s where the language games happen.

• Clean claim rate = claims that pass the clearinghouse scrub without a format error.
• First-pass resolution rate = claims actually paid on first submission, no rework.

A claim can be perfectly clean and still get denied for medical necessity, missing authorization, or eligibility. So a vendor can honestly report “97% clean claim rate” while a fifth of your claims are being denied by payers.

⚠️ Ask this exact question: “Is that clean claim rate, or first-pass resolution rate?” If they hesitate, or use the terms interchangeably, they either don’t understand their own reporting or they’re counting on you not knowing the difference. Either answer is disqualifying.

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Red Flags That Have Nothing to Do With Metrics

Some failures never show up in a spreadsheet. These are the behavioral tells, drawn from what practices consistently report when they come to us mid-crisis.

• The 48-hour report delay. A functioning RCM operation pulls an aging report on demand, same day. If yours needs two days’ notice, they’re building it manually — or cleaning it up first.
• Aggregate-only reporting. No payer-level breakdown, no provider-level breakdown, no denial-reason categories. Just totals. Totals hide everything.
• The account manager who appears at renewal. If the only proactive contact you’ve had this year was a contract conversation, you’re buying claims submission, not revenue cycle management.
• Nobody warned you about a payer policy change. When a major payer shifts a coverage rule affecting your specialty, you should hear it from your biller before the denials arrive. If you find out from the denials, they’re reactive.
• They can’t name your top five denial reasons. This should be instant recall. It’s the core of their job.
• Write-offs you never approved. Adjustments posting without a documented policy is the single biggest silent leak in any practice.
• You have no login. You should have read access to your own billing system, always. Refusal here is a serious problem, and we’ll come back to why.
• Turnover you find out about accidentally. If your account has quietly passed through three billers this year, institutional knowledge of your payers is gone.

💬 The one sentence that should end the relationship:
“That’s just how that payer is.”

No. That is a surrender dressed as expertise. Payers have documented policies, appeal rights, and published timelines. “That’s just how they are” means nobody has read the policy. Every time you hear it, assume there’s money sitting behind it.

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How to Prove It: Building Your Evidence File

This is the part every other article skips.

You can suspect underperformance all day. But if you walk into a conversation with a feeling, you’ll get a story about payer behavior and rising industry denial rates, and you’ll walk out with nothing. If you walk in with documents, you get a different meeting.

Give yourself one afternoon. Here’s the protocol.

Step 1: Request the five reports — in writing

Email, not phone. You want a timestamp and a paper trail. Keep it routine and unemotional; there’s no reason to signal what you’re doing.

Table 2: The Five Requests

Report	Ask for it exactly like this	What it exposes	Reasonable turnaround
A/R aging	Segmented by payer, provider, and 30/60/90/120+ buckets	Whether old claims are being abandoned	Same day
Denial log	Last 12 months, with CARC/RARC codes and current status	Whether denials are worked or just logged	48 hours
NCR by payer	Monthly, trailing 12 months, per payer — not blended	The single payer dragging your average down	48 hours
Charge lag report	Date of service to submission date, by provider	Whether claims sit before going out	48 hours
Adjustment/write-off log	With reason codes and who authorized each	Money written off without your approval	48 hours

Copy-paste email:

Subject: Quarterly reporting request

Hi [Name],

We’re doing an internal financial review this quarter. Could you send the following by [date, 5 business days out]:

1. A/R aging segmented by payer, provider, and 30/60/90/120+ buckets
2. Denial log for the trailing 12 months with CARC/RARC codes and current status
3. Net collection rate by payer, monthly, trailing 12 months
4. Charge lag report (DOS to submission) by provider
5. Adjustment and write-off log with reason codes and authorization

If any of these aren’t available in your system, just let me know which ones and why — that’s useful for our review too.

Thanks,
[Name]

That last line does real work. It gives them an easy out, and the out is itself evidence. A vendor who replies “we don’t produce NCR by payer” has answered your question completely.

What their response time tells you:

• Same day to 48 hours, complete → Reporting infrastructure is real. Now audit the contents.
• Five-plus days, or partial → They’re assembling it manually. Manual means nobody is monitoring these numbers routinely, which means nobody is acting on them.
• Pushback, vagueness, or “our system doesn’t do that” → You have your answer. A modern RCM platform produces all five natively.

Step 2: Pull your own data — don’t rely on their summary

This is the step that separates a real audit from a polite inquiry.

Your ERA/835 files come from the payers, through the clearinghouse. They are the source of truth. Your billing company’s monthly report is an interpretation of that truth.

• Log into your practice management system directly and run the aging report yourself. Compare it to theirs, line by line.
• Pull raw 835 remittance files if you have clearinghouse access.
• If you don’t have login credentials, request them today. Your data belongs to your practice, and refusal to grant read access is the most serious flag in this entire article.

When their report and your system disagree, don’t assume malice. Ask. But document the discrepancy first, with screenshots and dates.

Step 3: The Tell-Tale Test

Three questions. Ask them in a scheduled call. The specificity of the answer is the finding — not whether they sound confident.

Question 1: “Why is [Payer X] denying [CPT Y] for [Provider Z], and what did you change so it doesn’t happen again next month?”

A competent answer names the denial code, cites the payer’s policy, describes a specific edit added to the pre-submission scrub, and gives you a date to measure the change. A failing answer is “we’re following up on those.”

Question 2: “How many claims are currently sitting past 120 days, and what’s your plan for each bucket?”

The number should be instant. The plan should be concrete — appeal, rebill, escalate, or write off, with counts attached. “We’re working them” means nobody has triaged them.

Question 3: “Show me three denials you overturned on appeal in the last 60 days.”

This is the killer. Appeals are labor-intensive and unprofitable for a vendor paid on a percentage. If they can’t produce three examples with documentation, they’re likely not appealing at all — just resubmitting or writing off.

Step 4: Spot-check 20 claims against your fee schedule

Underpayments are the leak nobody notices, because the claim shows as paid. Nobody investigates a paid claim.

Pick your 20 highest-volume CPT codes. For each, pull the contracted rate from your payer agreement, then pull what was actually paid on a recent claim. Compare.

textFOR EACH of your top 20 CPT codes:

   Contracted rate  ──►  Amount actually paid
                              │
              ┌───────────────┴───────────────┐
              ▼                               ▼
          MATCHES                        UNDERPAID
              │                               │
              ▼                               ▼
      Check the next code        Was it flagged and appealed?
                                              │
                              ┌───────────────┴───────────────┐
                              ▼                               ▼
                            YES                              NO
                              │                               │
                              ▼                               ▼
                    System is working          ◄── THE FINDING ──►
                                                Nobody is checking
                                                payer compliance

Even two or three unflagged underpayments in a sample of 20 is significant. Extrapolate across your annual claim volume and you have a dollar figure — which is exactly what you need for the conversation that comes next.

Step 5: Build the timeline

Open one document. Log every request, every response, every delay, every discrepancy, with dates.

You need this for three reasons: it converts a feeling into a documented pattern, it’s what your attorney will ask for if the contract turns adversarial, and it gives any replacement vendor a precise picture of what they’re inheriting.

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“What If They Retaliate?” — The Question Nobody Answers

Let’s say the thing everyone thinks and nobody writes down.

The real reason practices don’t audit their billing company isn’t that they don’t know how. It’s the fear that the moment the vendor senses they’re being evaluated, your claims quietly move to the bottom of the queue — and by the time you’ve switched, two months of revenue has aged out.

That fear is legitimate. Here’s how to manage it.

Frame everything as routine. “Quarterly financial review” is normal, expected, and unremarkable. There’s no reason to announce an audit. Most of what you need is data you’re entitled to receive anyway.

Sequence it correctly. Get your system login and your data export first, before any performance conversation. Once you hold your own data, their cooperation stops being a dependency.

Read your termination clause before you say anything. Check three things: notice period (typically 30–90 days), data ownership language, and whether they’re contractually obligated to help with transition. Know your position before you reveal it.

Never terminate before a replacement is running. The standard protection is a parallel period — the outgoing vendor continues working claims they submitted while the new vendor handles everything from the transition date forward. Thirty days is the minimum; sixty is safer for higher volume.

Watch the clearinghouse account. If your billing company owns the clearinghouse relationship rather than you, that’s a leverage point they hold. Find out now, not during the exit.

And the plain reality: a vendor who would retaliate against a client for asking for reports is a vendor you cannot afford. The audit is how you find that out at a time of your choosing, rather than during a crisis.

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Wait — It Might Not Be Your Biller’s Fault

This section costs us leads. It stays in anyway, because if you switch vendors and the numbers don’t move, you’ve spent six months and a lot of goodwill solving the wrong problem.

Four causes that live inside your practice:

1. Front-desk eligibility verification. A large share of denials trace directly to registration — wrong plan, inactive coverage, missing secondary, name mismatch. No billing company can fix a claim that was wrong before it existed.
2. Provider documentation. Medical necessity denials usually mean the note didn’t support the code. That’s a clinician conversation, not a biller conversation.
3. Charge entry lag on your end. If your providers close encounters five days late, your days in A/R start five days behind, and no vendor can recover that.
4. Your fee schedule. If you haven’t updated charges in several years and you’re billing below what payers allow, you’re being paid your ask. Nobody’s failing. You’re just asking for too little.

The honest diagnostic: if your denial rate is high but concentrated in eligibility and registration codes, look at your front desk. If it’s concentrated in coding, bundling, modifiers, and medical necessity, look at your biller. The denial log from Step 1 tells you which — and that’s precisely why it’s the report you want most.

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What This Is Costing You Every Month You Wait

Abstract percentages don’t create urgency. Dollars do.

Worked example. A practice billing $250,000 per month in net collectible revenue.

Table 3: The Cost of an 8-Point NCR Gap

	Underperforming (88% NCR)	Healthy (96% NCR)	Difference
Monthly net collectible	$250,000	$250,000	—
Actually collected	$220,000	$240,000	$20,000/mo
Annualized	$2,640,000	$2,880,000	$240,000/yr
Vendor fee at 5%	$11,000	$12,000	+$1,000/mo
Net to the practice	$209,000	$228,000	$19,000/mo

Read the last two rows carefully, because they contain the whole argument.

The better vendor costs more in fees. They collect more, so their percentage is larger. A practice comparing vendors on rate alone would pick the cheaper one and lose $19,000 a month doing it.

Run this with your own numbers. If your NCR is 92% instead of 88%, halve it. It’s still six figures a year.

And the compounding part: every month you wait, another tranche of claims crosses 90 days. That money doesn’t wait for your decision. It expires.

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You’ve Proved It. Now What?

Three paths. They are not equally good.

Path 1: Fix it in place. Worth trying if the metrics are borderline and the failure looks like neglect rather than incapacity. Present your evidence file, set written 90-day targets tied to specific numbers, and require monthly reporting in the format you’ve specified. Set a hard review date. If they can’t hit agreed targets in 90 days with full attention on your account, they won’t hit them in month twelve.

Path 2: Renegotiate. If performance is adequate but reporting and communication are the problem, that’s fixable contractually. Require payer-level reporting, a named account manager, defined response times, and same-day aging reports as contract terms.

Path 3: Replace. If three or more failing metrics persist, if they can’t produce basic reports, or if they refuse you access to your own data, further conversation is just expensive delay. Move — but move in the correct order: secure your data, confirm the notice period, sign the replacement, run parallel for 30–60 days, and only then close out.

A note on old A/R. Whatever you do, decide explicitly who works the aged bucket during transition. It’s the most commonly abandoned money in any vendor switch, and it’s the money most likely to be written off by both parties assuming the other one has it.

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FAQ

Don’t book a call. Just send one report.

Export your A/R aging report segmented by payer if you can and email it to info@revgenbilling.com.

We’ll send back a written read on your 90+ bucket, your likely denial concentration, and what looks recoverable. No call required, no obligation, and we’ll tell you plainly if we think your current vendor is doing fine.

If you’d rather run it yourself first, that’s genuinely the better option. The protocol above is the same one we use.