MGMA Billing Benchmarks

Assessing Your Billing Performance with MGMA’s Key Benchmarks

Benchmarking is the continuous process of analyzing an organization’s performance in key areas and comparing it against industry competitors’ performance for the purpose of measuring success. At times it may be difficult for a medical practice to determine its success. By using data collected by the Medical Group Management Association (MGMA), a medical practice can see where it stands in relation to other similar practices. MGMA has been the leading association for medical practice administrators for over 90 years. One of its primary functions is the collection of data related to medical practices and their operations. So what are some of the important benchmarks a medical practice should measure?

MGMA Billing Benchmarks

Accounts Receivable

One of the key indicators of a practice’s financial health is the state of its accounts receivables. One very basic benchmark, for instance, calls for the majority of accounts receivables (A/R) to fall in the 0-30 day category. Each older category should account for a smaller percentage of total A/R. If this is not the case, then an effort must be made to collect old debt earlier, especially since A/R that ages 120 days or more is statistically rarely collected.

Net Collection Rate

Another way to measure the success of the revenue cycle is by calculating the net collection rate and comparing that to MGMA’s benchmark. Physicians often enter contracts with payers to accept a rate lower than the gross rate for specific procedures and services. For instance, a medical practice may accept $150 from an insurance company for a procedure which normally costs $200. The net collection rate measures how much of the contractually adjusted rates are being collected. That collection should be at 97% according to MGMA’s data. If the rate is lower, further research should be performed to determine if the low percentage is widespread or due to one particular payer.


The final benchmark we will look at is the cost of doing business, or a practice’s overhead. By comparing your practices cost’s to MGMA’s benchmark, you can determine if your practice is spending more to operate than the industry standard for similar medical practices. MGMA’s data contains typical overhead rates for different specialties. If you find that your overhead rate compares unfavorably to the median, it is time to review the details of costs in different categories to pinpoint where cuts need to be made.

These are just three of the primary benchmarks that can be studied. To get a clear picture of a practice’s financial health, many more will need to be compared. At ProMD Medical Billing, our billing consultants can perform a complete revenue cycle analysis and benchmark comparison of your medical practice, giving you a complete view of your financial performance and provide an action plan to get your numbers comparing favorably to industry standards. Call us today to schedule your first consultation.

ProMD Medical Billing is happy to help with your billing assessment needs so you can maximize profits and increase patient satisfaction. To learn more about how ProMD can make your practice run like a well-oiled machine, call 866-960-9558 or fill out our online form to request a billing assessment.

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