What is Net collection rate?
The share of collectable revenue you actually collected, after contractual adjustments are removed from the denominator.
Definition
Net collection rate divides payments received by charges net of contractual adjustments. By excluding the contractual write-off — money you were never entitled to under the contract — it isolates the part of performance you actually control.
This is the metric that exposes preventable loss. Gross collection rate mostly reflects how your fee schedule compares to your contracted rates, and can be moved by raising charges without collecting another dollar. Net collection rate cannot: the gap between it and 100% is denials never appealed, balances never pursued, and claims never filed in time.
Why it matters
Every point of net collection rate is real, recoverable money. On a practice collecting $2M a year, three points is $60,000 that was earned and not collected.
Related terms
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