By Lemuel Areglo, CPC | Director of Revenue Cycle Management Services
Key Takeaways
- Many speech therapy clinics do not face a billing crisis; they experience a visibility gap. If cash flow is inconsistent, the first step is to identify which financial metrics are off and by how much.
- Denial rates exceeding 10% are unacceptable. High-performing clinics maintain rates below 5% by combining proactive prevention with efficient appeals when denials occur.
- Claims should be submitted within 24 hours of a patient encounter. Each day a claim is delayed adds to the payment timeline, compounding across all claims submitted.
- Monitoring relevant KPIs provides crucial insights into the performance and efficiency of your billing processes.
If you’re tracking your revenue cycle performance but still seeing slow cash inflow, the issue often lies not in effort but in visibility. Most clinics do not have a billing crisis; they have a measurement gap.
Here are several key performance indicators (KPIs) that effective billing practices can enhance, along with realistic benchmarks and necessary changes to achieve them.
Table of Contents
How We Selected These KPIs
Not every billing metric warrants your attention. We focused on those directly linked to revenue, controllable by a billing service, and applicable to any speech therapy practice. If it doesn’t impact cash flow, staff workload, or compliance, it didn’t make the list.
1. Days in Accounts Receivable
This metric indicates how long it takes to convert a patient visit into cash. High-performing clinics keep this number under 30 days. If yours exceeds 50 days, there may be issues upstream, typically related to slow claim submissions or inadequate follow-up on aging accounts.
The solution is straightforward: submit claims on the same day, verify insurance before appointments, and ensure someone is actively monitoring accounts that are 61–90 days overdue.
2. Clean Claim Rate
Every claim that is denied costs you 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 difference often comes down to pre-submission scrubbing, which involves identifying missing modifiers, invalid codes, and payer-specific requirements before the claim leaves your system. This essential step is where reliable cash flow begins.
3. Denial Rate
Industry-wide, denial rates have risen to 12–15%. High-performing clinics maintain rates below 5%. This gap represents significant revenue that clinics either recover slowly or write off entirely.
Billing services address this issue in two ways: prevention (eligibility checks, authorization tracking, accurate coding) and recovery (appeals, pattern analysis, and addressing root causes to prevent recurring denials). Both strategies are essential, yet many practices only focus on one.
4. Net Collection Rate
This figure reveals the percentage of the revenue you are actually collecting. If it falls below 90%, you are likely missing out on revenue due to underpayments, unbilled services, 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 accounts until they are fully paid, not just submitted.
5. First-Pass Resolution Rate
This metric reflects efficiency, measuring how often a claim is paid correctly on the first submission—without rejections, underpayments, or appeals. A low rate indicates that your billing staff is spending more time resolving issues than processing new claims.
Strive for a first-pass resolution rate of 95% or higher. Improving this metric often uncovers specific failure points that, once addressed, can enhance overall performance.
6. Charge Capture Rate
This metric signifies preventable revenue loss. You provided the service, documented it, but failed to bill for it.
Missed charges often occur in ancillary services, supplies, and procedures that were documented but not coded. A billing service can help close this gap by reconciling clinical notes with submitted charges and flagging any discrepancies before filing deadlines.
7. Patient Collection Rate
Patients are increasingly responsible for a larger share of their healthcare costs, with average collection rates on these balances ranging from 34% to 48%. This is not merely a billing issue; it is fundamentally a communication issue.
Clear, understandable statements, accessible payment plan options, and proactive outreach before balances age into bad debt are essential. While these strategies are not revolutionary, many practices lack the systems to implement them consistently.
8. Claims Submission Speed
Medicare has a 14-day payment floor. Each day a claim is delayed before submission extends your payment timeline. Claims should be submitted within 24 hours of a patient encounter—this is non-negotiable.
The bottleneck often occurs at the transition between clinical documentation and billing. When these systems are integrated, delays are minimized. Without integration, data must be manually transferred, leading to potential oversights.
9. Cost to Collect
This metric often goes unnoticed. If you are spending 10 cents to collect every dollar, it significantly impacts your operating margin, a detail that can be easily overlooked in monthly reports. The target should be under 5%.
Outsourcing billing does not automatically reduce this cost; however, a competent billing service can lower it by distributing technology and staffing costs across a broader client base than any single clinic can afford.
A Quick Reference Guide
KPI
Target
Primary Lever
Days in A/R
<30 days
Faster submission + follow-up
Clean Claim Rate
≥95%
Pre-submission scrubbing
Denial Rate
<5%
Prevention + 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 + payment plans
Claims Submission Speed
<24 hours
Same-day processing
Cost to Collect
<5%
Process efficiency
Where to Start
Do not attempt to address all nine KPIs simultaneously. Focus on the areas where you are furthest from benchmarks—this will provide the quickest route to recovering revenue. If your denial rate exceeds 10%, that is your immediate concern. If claims are sitting for three days before submission, prioritize that issue.
A reputable billing service will establish baseline metrics before promising outcomes and will report on them regularly thereafter. If they cannot provide your denial rate, that is a significant concern.
SpeechTherapy Billing Services integrates directly with clinical documentation, which significantly impacts metrics such as clean claim rates and submission speed. With no data re-entry and no manual handoffs, billing begins as soon as the provider closes the encounter. This structural improvement leads to sustainable enhancements in performance—not just temporary fixes.
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 billing, coding, credentialing, and revenue cycle operations across the healthcare sector. Lemuel’s expertise encompasses the entire revenue cycle, including claims management, denial resolution, payment posting, accounts receivable, and practice operations. He has extensive experience supporting various specialties, including speech therapy, psychiatry, physical therapy, pain management, internal medicine, orthopedic surgery, and sleep medicine.
