Running a profitable outpatient rehab therapy clinic is the dream for most practice owners. But it is a process that’s much easier said than done.

When it comes to increasing revenue and projecting growth, few activities are as effective as diving into your clinic’s metrics. When used effectively, medical practice reporting tools can provide valuable business insights into what is working well at your clinic, what needs improvement, and what could pave the way for future growth opportunities.

But running those calculations can get tricky. Luckily, there are practice reporting tools and software that can quickly and easily help you understand your data. To get started, here are eight critical metrics to track at your clinic, how they’re calculated, and how practice reporting tools can help.

Four clinic metrics for increasing practice revenue

1. New Patient Conversion Rate

Your new patient conversion rate calculates the percentage of referrals that convert into new patients. This practice management metric helps determine if you’re achieving the number of new referral visits needed to meet your revenue goals. While 100% would be ideal, it is not easy to achieve. This is why tracking your rate over time can help you measure improvements for success.

When calculating, consider the time frame you want to analyze—our example will use 30 days, but 7 days is also common. Take the total number of referral visits that were “arrived” during your time frame and divide it by the total number of referral visits that were scheduled during that time. Then multiply your result by 100 to find the percentage.

Example: [Total referrals that “arrived” during 30-day period] / [total referrals scheduled during 30-day period] X 100 = percentage of arrived visits

[120] / [150] = 0.80 x 100 = 80% of visits arrived over 30-day period

2. Days in AR

Measuring the average time claims stay in accounts receivable (aka days in AR) helps you determine the rate at which your clinic is collecting money and if balances are aging beyond their value. The more a claim ages, the less return on investment the clinic receives once the claim has been settled. Industry benchmarks are typically in the range of 30-40 days in AR.

Calculating days in AR requires also knowing your practice’s average daily charges. To determine that, add all the charges posted during your given time frame and divide by the number of business days within the month.

Example: [Total charges in a month] ÷ [number of business days in a month] = average daily charges

                [$300,000] ÷ [22] = $13,636 in average daily charges per day

Next, to calculate days in AR, divide the total accounts receivables for your clinic by your average daily charges.

Example: [Total in AR] / [average daily charges] = days in AR

[$525,000] / [$13,636] = 38.5 or about 39 days in AR

3. Denial Rate

Your claims denial rate provides insight into the efficiency of your billing department. Clinics should expect a denial rate between 5% to 10%. If you have a denial rate above 10%, you may want to consider reviewing your claim submission process to identify missed steps, inefficiencies, or errors. Additionally, it’s important to remember that unexpected billing errors can occur, like sudden CCI edits, which can temporarily impact your results.

When calculating your claims denial rate, your reporting system will take the total dollar amount of denied claims in a given time frame—let’s say 30 days. Then divide that number by the total dollar amount of all submitted claims within that same time frame and multiply the resulting number by 100 to get your percentage.

Example: [Total claims denied in 30 days] / [total of claims submitted in 30 days] X 100 = percentage of claims being denied

[$15,000] / [$150,000] = 0.10 x 100 = 10% for a 30-day period

4. Net Collections Rate

Your organization’s net collection rate is the most critical indicator of your billing team’s ability to collect payer reimbursements. A net collections rate of 96% is considered standard in the industry. If your clinic is falling short of that benchmark, sometimes hiring an outsourced, expert RCM team can significantly improve your collections rate.

When calculating your net collections rate, your reporting system* will divide the net of all payments over a given time frame (30 days for us) by all net charges (aka contractual adjustments) over that same time frame. Then, multiply the result by 100 to determine your percentage rate.

Example*: [Net payments over 30 days] / [net charges over 30 days] X 100 = percentage of net collections

                [$50,000] / [$52,000] = .962 X 100 = 96.2% net collections rate

* The above equation is based on industry standards. Clinicient’s Insight reporting system includes write-offs from our Net Collections Rate calculation. Our calculation is: [Net payments over 30 days] / [gross charges – contractual adjustments – write-offs over 30 days] X 100 = % of net collections.

Three clinic metrics for analyzing profitability and growth

1. Net Revenue per Visit and Net Profit per Visit

Net revenue per visit (aka “payment per visit”) measures your clinic’s average reimbursement collected per patient visit. When divided by payer, you can use that information to renegotiate fee schedules and understand which payers provide the highest profit margin. This information can be critical in planning for and determining your clinic’s overall profitability.

When calculating your net revenue per visit, your reporting system first needs to figure out the average reimbursement amount for each payer during a specific time frame. It will do this by adding together all payer reimbursements, then dividing that result by the total number of visits. (Best practice is to use a rolling average over a longer period to account for a range of payer processing times and reimbursement rates.)

Example: [The added dollar amount of all reimbursements] / [the number of visits] = average of net revenue per visit

  [$3,000 + $4,000 + $500 + $550] / [80] = $100.63 average revenue per visit

But wait! Your clinic’s revenue is only part of the picture. Your net profitability can be determined with a few extra steps. First, your system will take your average net revenue per visit and subtract it from your net cost per visit. Costs can include therapist and employee pay, equipment costs, and overhead clinic costs. What is left over is your visit profit margin.

Clinics with a positive profit margin are primed for growth, whereas a negative profit margin means the clinic is operating at a loss.

Example: [Average net revenue per visit] – [average cost per visit] = average net profit per visit

$100.63 – $75.50 = $25.13 net profit per visit

2. Customer Acquisition Cost

Your clinic’s customer acquisition cost is the amount of money spent on each new patient coming into your clinic. This number helps you determine the effectiveness of your marketing or referral network and how much you should spend on future efforts. The lower the number, the better for your clinic’s profitability.

To calculate, add together the total amount of money spent on sales and marketing over a given time frame–we’ll stick to 30 days, again. Then divide that total by the number of new patients that came in during that time frame. The result is your customer acquisition cost.

Example: [Marketing costs + sales costs over 30-day period] / [number of new patients over 30-day period] = cost to acquire new customers

                [$400 + $225] / [15 new patients] = $41.66 cost to acquire new patients that month

3. Therapist Capacity Rate

Your therapist capacity rate helps determine how much free-time therapists have on their schedule. Knowing this number can help you determine if you need to hire more therapists due to over-booked schedules (90% or above), or if you need to increase the number of patients a therapist sees (below 80%). A capacity rate of 90% is considered optimal for the industry.

When calculating therapist capacity rates divide the total number of hours scheduled for the therapist by the total hours available. We’ll use an 8-hour day for our example. It then multiplies your result by 100 to determine the percentage.

Example: [total hours scheduled] / [total hours available] X 100 = percentage of time that is vacant on a therapist’s schedule

                [6.5 hours] / [8 hours] = 0.812 X 100 = ~81% capacity rate

A faster way to calculate and track metrics

With the right analytics tools at your organization, you can automate reports, take a deep dive into your clinic’s financial health, and see your data results in real-time. All of this helps you improve your business planning and reduce manual time spent calculating reports.

Our Insight EMR software offers detailed, automated reporting for outpatient rehab therapy clinics. To learn more about our reporting features, or hear about our advanced reporting partner Practice Dashboard, request a free demo today or call 1.877.252.4774.


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