How Do You Know If Your Current Billing Workflow Is Underperforming?

A practice can look busy on paper, full schedules, steady patient volume, and still be quietly losing revenue. The gap between "things feel fine" and "things are actually fine" usually is not a mystery. It shows up in the numbers first, long before it shows up as a cash flow crisis.

The challenge is that most practices are not comparing their revenue cycle numbers against a data point that is meaningful. A denial rate or a days-in-A/R figure means little about your opportunity for improvement without a benchmark to measure it against.

This guide below covers the specific thresholds that signal an underperforming billing workflow, along with the operational and patient-facing warning signs that often show up before the numbers do.

Quick Answer: Signs Your Billing Workflow Is Underperforming

A billing workflow is likely underperforming if days in A/R run above 40, the clean claim rate falls below 90%, the denial rate climbs above 10%, or A/R older than 90 days exceeds 10% of total receivables. Beyond the numbers, growing claim backlogs, staff spending more time on rework than new claims, and rising patient billing complaints are all signs worth investigating. Common warning signs include:

Days in A/R consistently above 40
Clean claim rate below 90%
Denial rate above 10% of submitted claims
A/R older than 90 days above 10% of total receivables
Net collection rate below 95%
Staff spending more time correcting claims than submitting new ones
No clear answer for why claims are being denied

supervisor looking at insight dashboards on computer

The Benchmark Check: How Your Numbers Compare

According to HFMA, the following ranges separate healthy revenue cycle performance from a workflow that needs attention:

Days in A/R: Should generally run 30 to 40 days. Numbers climbing past that range point to slower reimbursement and tightening cash flow.
A/R over 90 days: Should stay below 10% of total receivables, with self-pay A/R over 90 days below 30%. A growing share here means claims are aging out of the window where collection is realistic.
Clean claims rate: A strong target is 98%. Rates well below that mean too many claims require rework before they get paid.
Net collection rate: Should be at least 95%, with 97% to 99% considered optimal. Anything lower suggests revenue is being left uncollected.
Initial denial rate: Industry averages run 5% to 10%, with under 5% considered optimal. Practices should also aim to resolve 85% of denials within 30 days.
Bad debt ratio: Should stay below 5% of total service revenue.

For a full breakdown of these metrics and how to calculate them, see what KPIs physician groups should track in revenue cycle management.

Signs Beyond the Numbers

Not every warning sign shows up in a spreadsheet right away. These operational and patient-facing patterns often surface first.

Operational Warning Signs

A growing backlog of unworked claims and denials
Staff routinely working overtime just to keep up with claim volume
No dedicated process for tracking why claims are denied, only for resubmitting them
Reports that show what happened last month but nothing that predicts what is coming
High staff turnover in billing roles, leading to inconsistent follow-up

Patient-Facing Warning Signs

A rise in billing-related patient complaints or phone calls
Patients frequently confused about what they owe and why
Statements going out inconsistently or with errors
Collections calls happening too late to be effective, or too aggressively when they finally start

Financial Warning Signs

Monthly collections that are hard to predict or explain
Cash flow surprises that were not visible in the numbers ahead of time
Increasing write-offs without a clear explanation of why
Rising cost to collect without a corresponding increase in what is actually collected

Common Root Causes of an Underperforming Workflow

Most underperforming billing workflows trace back to a handful of root causes:

Outdated or manual processes that rely on staff to catch errors a system should catch automatically
No dedicated denial management function, so denials get worked whenever someone has time
Weak front-end verification, allowing eligibility and authorization issues to reach the claim stage
Coding gaps, whether from inconsistent training or a lack of specialty-specific expertise
Limited reporting and analytics, making it hard to see patterns instead of individual claims
Staffing gaps or turnover that leave key revenue cycle functions understaffed for stretches at a time

Many of these same root causes are also common billing errors that affect reimbursement and collections, which is why the two problems tend to show up together.

A Quick Self-Assessment

A practice can get a rough read on its billing workflow by asking a few honest questions:

Do we know our current denial rate, broken down by payer and reason code, or just that "denials feel high"?
Can we explain why our top three sources of denials are happening, not just that they are happening?
Is our A/R aging report reviewed regularly, or only pulled when something feels wrong?
Do we know how much staff time goes into reworking claims versus submitting new ones?
Would our billing team be able to explain a sudden drop in collections within a day, or would it take weeks to investigate?

Struggling to answer more than one or two of these with confidence is itself a warning sign.

When It's Time to Consider a New Approach

Not every underperforming metric requires a complete overhaul. But a few situations tend to signal that internal fixes alone will not be enough:

KPIs have been below benchmark for multiple consecutive months despite process changes
Staff turnover keeps resetting institutional knowledge about payer rules and denial patterns
The practice cannot get consistent, trustworthy reporting on its own revenue cycle
Growth plans are outpacing what the current billing team can realistically support

In these cases, outsourced RCM support built to reduce denials and rebuild consistent processes is often faster than trying to solve the problem with the same team and tools that produced it.

Frequently Asked Questions

What is the single best indicator that a billing workflow needs attention?

There is no single metric that tells the whole story, but a rising denial rate combined with climbing days in A/R is one of the clearest combined signals.

How often should a practice check these benchmarks?

Monthly at minimum, with denial trends reviewed weekly since they tend to compound quickly if left unaddressed.

Can a practice be underperforming even if cash flow feels stable?

Yes. Cash flow can look stable in the short term while write-offs and uncollected balances quietly accumulate, especially if reporting is inconsistent.

Is an underperforming billing workflow always a staffing problem?

Not always. It is often a combination of process gaps, limited reporting visibility, and outdated technology, with staffing being only one contributing factor.

Should a practice benchmark against national averages or its own specialty?

Both, when possible. National benchmarks are a useful starting point, but specialty and payer mix can shift what a realistic target looks like.

Ready to Find Out Where Your Billing Workflow Stands?

The numbers already show whether a billing workflow is performing well. The question is whether anyone is looking at them consistently enough to catch a problem before it becomes expensive.

Watch one of our most popular webinars and learn how to use the Power of KPIs to set your practice on the right track! Power of KPIs WEBINAR

Learn how you can improve your billing performance and cashflow by contacting UnisLink today and Request a Quote.