What is a Gross Collection Rate?

Your Gross Collection Rate is simply the percentage of money you collected on your charges (capitated charges excluded).

Many practices use it to gauge the "cents on a dollar" that they collect. A Gross Collection rate of 53%, for example, implies that the practice collects $.53 for every dollar it charges.

A collection rate that is too low may indicate a problem with your collection process while a collection rate that is too high may indicate that your prices are too low. It is very important to note that a lower collection rate does not definitely indicate that a practice makes less money. As we have often said in our seminars, most pediatricians would rather have 75% of a dollar than 50% of two dollars. Don't be one of those pediatricians who settles for 75 cents!

What is the Pediatric Benchmark for Gross Collection Rate?

How Do I Calculate the Gross Collection Rate for My Practice?

For any given period of time, add up all of your non-capitated charges and divide the total by the dollars collected on those charges. Many practices make the mistake of adding up their charges and dividing the total by the money collected during the same time frame. While that may be a decent rule of thumb for some practices, this process is not truly accurate. As you know, you receive payments every day for visits you performed weeks, or even months, ago.

A practice with a high collection rate collects more money for each of its procedures performed, ceteris parabis. However, in the real world, a higher collection rate can reflect other issues: prices that are too low, for example. Ultimately, you want to strike a balance that is appropriate for your office.