Read this first: what a benchmark can tell you

A benchmark is only useful if it measures the same thing, the same way, for practices like yours. Most billing 'benchmarks' you'll see quoted come from vendors or surveys without a stated method. This page cites only government agencies, KFF, the AMA and peer-reviewed research, and says plainly where none of them publishes a figure. Where that's the case, measure your own and watch the trend.

Denial rate

Initial denial rate

claims denied on first submission ÷ claims adjudicated in the period

How often claims are denied the first time. This measures your front end and scrubbing. Use claim lines instead of claims if your system reports by line, and say which.

Final denial rate

claims still denied after all rework and appeals ÷ claims adjudicated in the period

What you actually lost. Measure it after enough time has passed for appeals to resolve, and track it by payer and reason code (CARCs).

What primary sources report. KFF's analysis of HealthCare.gov Marketplace insurers found they denied 19% of in-network claims and 37% of out-of-network claims in 2024. The most common reason was 'other' (36%), then administrative reasons (25%); lack of prior authorization or referral was 9% and lack of medical necessity 5%. Fewer than 1% of denied claims were appealed, and insurers upheld 66% of appeals (KFF). That's one market's insurers, measured across all claims, not a physician-practice benchmark.

For Medicare Advantage, HHS-OIG reviewed a sample of denials and found 13% of prior authorization denials and 18% of payment denials met Medicare coverage rules and should have been approved (OIG, 2022). Not a rate to compare against: a reason to appeal.

Days in A/R

Days in accounts receivable

total A/R today ÷ (gross charges for the last 90 days ÷ 90)

How many days of charges are sitting uncollected. Use the same basis every month: gross charges or net (after contractual adjustments) give very different numbers, so pick one, write it down and ask your billing company to use the same.

Share of A/R over 120 days

A/R older than 120 days ÷ total A/R

Old A/R is hard to collect, and the clock keeps running toward filing and appeal deadlines (for Medicare claims, one calendar year after the date of service: 42 CFR 424.44). Track this alongside days in A/R: a falling days-in-A/R number can hide old balances being written off.

What primary sources report. No government agency or peer-reviewed source publishes a days-in-A/R benchmark for physician practices that this guide could find. The useful reference point is Medicare's payment timing for clean claims: Medicare must pay at least 95% of clean claims within 30 days of receipt and owes interest after that, and can't pay electronic clean claims sooner than day 14 (SSA §1842(c); CMS manual §80.2). If your Medicare clean claims take much longer than 30 days, look for a problem in submission or posting.

Clean claim rate

For Medicare, a clean claim is one with no defect, impropriety or missing documentation that prevents timely payment (SSA §1842(c)(2)). Practices and billing companies use 'clean claim rate' more loosely, usually to mean claims that pass the scrubber and the payer without being touched again.

Clean claim rate (first-pass)

claims paid or adjudicated without any correction or resubmission ÷ claims submitted

Ask any company quoting a clean claim rate whether it counts claims that pass its own scrubber (an internal measure) or claims the payer accepted and paid the first time (the one that matters).

Net collection rate

Net collection rate

payments received ÷ (charges − contractual adjustments) for the same services

How much of what you're contractually owed you actually collect. Measure it on a lag (for example, services from three to six months ago) so recent claims still in process don't drag it down. Patient balances you never collect show up here.

How to measure your own practice

  1. Pull twelve months of data

    From your practice management system or current biller: claims submitted, claims denied (first pass and final), denial reason codes by payer, gross charges, contractual adjustments, payments, and A/R aging buckets.

  2. Write down your definitions

    Claims or lines? Gross or net charges? Which date (service, submission, adjudication)? Keep them fixed so month-to-month changes mean something.

  3. Compute monthly, by payer

    A practice-wide number hides a payer that changed a rule. Compute each metric for your top five payers separately.

  4. Look at the reasons, not just the rate

    Group denials by reason code. Eligibility and authorization denials point to the front end; coding-edit denials to coding; medical-necessity denials to documentation. Payer friction explains the patterns.

  5. Ask any billing company to report the same way

    Give them your definitions and ask for the same metrics, by payer, monthly. See questions to ask.

Worked exampleDays in A/R and old A/R, for one month
  1. Hypothetical numbers for the arithmetic: total A/R today is $300,000; gross charges over the last 90 days were $540,000.
  2. Average daily charges = $540,000 ÷ 90 = $6,000.
  3. Days in A/R = $300,000 ÷ $6,000 = 50 days.
  4. Of the $300,000, $60,000 is older than 120 days: 60,000 ÷ 300,000 = 20% of A/R.

Next month, compute both again on the same basis. If days in A/R falls but nothing older than 120 days was collected, ask what was written off.

What billing costs: the peer-reviewed evidence

A JAMA study of one large academic health system measured the time and cost of billing and insurance-related work per encounter: 13 minutes and $20.49 for a primary care visit, up to 100 minutes and $215.10 for an inpatient surgical procedure. As a share of professional revenue, that was 14.5% for primary care visits, 25.2% for emergency department visits, 13.4% for ambulatory surgical procedures, 8.0% for inpatient stays and 3.1% for inpatient surgical procedures (Tseng et al., JAMA 2018). These are academic health system figures, not a benchmark for independent practices.

Prior authorization is a measurable part of that load: physicians in the AMA's 2024 survey reported 39 prior authorizations and 13 hours of physician and staff time per week on average (AMA).

Questions people ask

What is a good denial rate for a medical practice?

No federal agency or the AMA publishes one. Track your initial and final denial rates by payer and reason, and watch the trend. For context, HealthCare.gov Marketplace insurers denied 19% of in-network claims in 2024 (KFF).

How do you calculate days in A/R?

Total A/R divided by average daily charges over the last 90 days (charges ÷ 90). Use the same basis, gross or net, every month.

What is a clean claim?

For Medicare, a claim with no defect or missing documentation that prevents timely payment (SSA §1842(c)(2)). Medicare must pay most clean claims within 30 days.

Should I trust a billing company's benchmark claims?

Ask for the definition, the period, and which practices it covers. A number without those can't be checked.

Sources

Every figure and rule on this page links to the organization that produced it. Check the source before you rely on it: payer and federal rules change.

  1. Claims Denials and Appeals in ACA Marketplace Plans in 2024 (March 24, 2026) · KFF
  2. Some Medicare Advantage Organization Denials of Prior Authorization Requests Raise Concerns About Beneficiary Access to Medically Necessary Care (OEI-09-18-00260, April 2022) · HHS Office of Inspector General
  3. Claim Adjustment Reason Codes · X12
  4. 42 CFR 424.44: Time limits for filing claims · Electronic Code of Federal Regulations
  5. Social Security Act §1842(c)(2)–(3), 42 U.S.C. 1395u: clean claim definition and payment timing · U.S. Code, via Cornell Legal Information Institute
  6. Medicare Claims Processing Manual, Chapter 1 (§30.2.4 Payment to Agent; §80.2 clean claims and interest) · Centers for Medicare & Medicaid Services
  7. Tseng P, Kaplan RS, Richman BD, Shah MA, Schulman KA. Administrative Costs Associated With Physician Billing and Insurance-Related Activities at an Academic Health Care System. JAMA. 2018;319(7):691–697 · JAMA (PubMed record 29466590)
  8. Physicians concerned AI increases prior authorization denials (2024 AMA prior authorization physician survey, February 24, 2025) · American Medical Association