What is Net Collection Rate?
Also called: NCR · adjusted collection rate
Gross collection rate — payments over billed charges — is close to meaningless, because it moves whenever you change your fee schedule rather than when your performance changes.
The gap between net collection rate and 100% is denials, underpayments, uncollected patient balances and write-offs. That gap, multiplied by annual charges, is the number worth putting in front of a practice owner.
Where Vizora handles this
Primary sources
Where "Net Collection Rate" is defined by the bodies that set the rules, rather than by us.
- MGMA DataDive and MGMA Stat (opens in a new tab)
Medical Group Management Association — The practice-level operations benchmarks — days in AR, denial rate, cost to collect — that physician groups are actually measured against.
- MAP Keys revenue cycle metrics (opens in a new tab)
Healthcare Financial Management Association — Standard definitions for revenue cycle KPIs. Worth reading precisely because HFMA defines the metrics without publishing public target values — a distinction most vendor marketing ignores.
Last reviewed August 20, 2026
Related terms
Days in AR
Days in accounts receivable measures the average time between billing a service and collecting payment. It is calculated as total accounts receivable divided by average daily charges. It is the single best summary indicator of revenue cycle health, because every upstream failure eventually shows up in it.
Contractual Adjustment
A contractual adjustment is the difference between a provider's billed charge and the contracted allowed amount with that payer. It is not a loss and not collectible from the patient — it is the discount agreed to in the contract, and it must be recorded separately from write-offs.
Underpayment
An underpayment is a claim paid below the contracted allowed amount. Unlike a denial it produces no alert, posts cleanly, and closes the claim — which is why systematic underpayment can run for years without anyone noticing. Detection requires comparing every payment against a loaded fee schedule.
Denial Rate
Denial rate is the percentage of submitted claims a payer denies, usually measured on first submission. MGMA data puts single-specialty physician practices at roughly 8%; Kodiak Solutions reports 11.81% for hospitals and health systems in 2024. Above 10% is where practices generally start losing material revenue.
More in Financial metrics
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