Gross Collection Rate (GCR) is a key performance indicator used in healthcare revenue cycle management to measure the effectiveness of the billing and collections process. It is calculated by dividing the total amount of payments received by the total amount of charges billed during a specific period of time, typically a month or a year. The GCR provides insight into the overall financial health of a healthcare organization by indicating how much of the billed charges are actually collected. A high GCR indicates that the organization is effectively collecting payments from patients and insurance companies, while a low GCR may indicate issues with the billing and collections process, such as denials, underpayments, or uncollected balances. It is important to note that the GCR does not take into account any adjustments or write-offs that may have been made to the billed charges. Therefore, it is recommended to use the GCR in conjunction with other metrics, such as net collection rate and days in accounts receivable, to gain a more comprehensive understanding of the revenue cycle performance.
Gross Collection Rate (GCR) is calculated by dividing the total payments received by the total charges billed during a specific period of time.
The formula for calculating GCR is as follows: GCR = Total Payments Received / Total Charges Billed
For example, if a healthcare organization billed $1,000,000 in charges and received $800,000 in payments during a given month, the GCR for that month would be: GCR = $800,000 / $1,000,000 = 0.8 or 80%This means that the organization collected 80% of the charges it billed during that month. GCR is an important metric for measuring the effectiveness of a healthcare organization's revenue cycle management efforts, as it provides insight into how well the organization is collecting payments for the services it provides. A higher GCR indicates that the organization is collecting a larger percentage of the charges it bills, which is generally a positive sign.
Best practices to improve Gross Collection Rate (GCR) are:
1. Accurate Patient Registration: Ensure that patient registration is accurate and complete. This includes verifying patient demographics, insurance information, and eligibility.
2. Timely Charge Capture: Ensure that charges are captured in a timely manner. This includes ensuring that all services provided are accurately documented and billed.
3. Effective Claims Management: Ensure that claims are submitted accurately and in a timely manner. This includes verifying that all required documentation is included with the claim and that the claim is submitted to the correct payer.
4. Denial Management: Develop a robust denial management process to identify and address denials quickly. This includes tracking and analyzing denials to identify trends and implementing corrective actions to prevent future denials.
5. Patient Collections: Develop a patient collections process that is effective and efficient. This includes providing patients with clear and concise statements, offering payment plans, and following up on outstanding balances.
6. Staff Training: Ensure that staff members are trained on the importance of GCR and understand their role in improving it. This includes providing ongoing training and education on best practices and new processes.
7. Performance Monitoring: Monitor GCR regularly and track progress over time. This includes analyzing trends and identifying areas for improvement.By implementing these best practices, healthcare organizations can improve their GCR and ultimately increase revenue.
The industry standard benchmark for GCR is typically around 95%. This means that healthcare providers aim to collect at least 95% of the total charges they bill. However, the actual benchmark can vary depending on the type of healthcare provider, the patient population, and the payer mix. For example, hospitals may have a lower GCR benchmark due to the higher percentage of uninsured or underinsured patients they treat. On the other hand, physician practices may have a higher GCR benchmark due to the lower percentage of uninsured patients and the ability to collect payments at the time of service. It is important for healthcare providers to regularly monitor their GCR and compare it to industry benchmarks to identify areas for improvement in their revenue cycle management processes. By improving their GCR, healthcare providers can increase their revenue and improve their financial stability.
Revenue cycle software can significantly improve the Gross Collection Rate (GCR) metric by streamlining the entire revenue cycle process. With the help of revenue cycle software, healthcare providers can automate and optimize their billing and collections processes, which can lead to a higher GCR. Revenue cycle software can help healthcare providers identify and address revenue cycle inefficiencies, such as claim denials, underpayments, and delayed payments. By automating the billing process, revenue cycle software can ensure that claims are submitted accurately and in a timely manner, reducing the likelihood of denials and delays. Additionally, revenue cycle software can help healthcare providers track and manage their accounts receivable, ensuring that they are collecting payments from patients and insurance companies in a timely manner. By automating the collections process, revenue cycle software can help healthcare providers reduce the number of outstanding accounts receivable, which can lead to a higher GCR.Overall, revenue cycle software can help healthcare providers improve their GCR by streamlining their revenue cycle processes, reducing inefficiencies, and ensuring that they are collecting payments in a timely manner. If you're interested in seeing firsthand how revenue cycle software can improve your GCR, we encourage you to book a demo with MD Clarity. Our revenue cycle software is designed to help healthcare providers optimize their revenue cycle processes and improve their financial performance. Contact us today to schedule your demo!