Running a DME business is not just about delivering equipment; it’s about making sure every item you provide or bill for gets paid. Revenue leakage is one of the biggest threats today from the DME billing point of view, and it doesn’t always happen because of mistakes — sometimes it happens because no one noticed the problem until it was too late. That’s why tracking the right metrics matters. You can always gain control, reduce denials, spot issues early, prevent waste and safeguard your bottom line when you know how to closely monitor key performance numbers. DME suppliers can actually stop guessing and start managing their billing process with confidence with the right metrics in place.
Let’s explore the vital metrics that every DME supplier should monitor, why they matter and individual goal.
Learn about the vital metrics, how they matter and individual goal in DME billing:
1. Clean claims:
Your clean claim rate shows the percentage of claims submitted without errors. The higher this number, the smoother your revenue cycle runs. A low clean claim rate means your billing team is reworking claims, losing time, and delaying payments.
Why it matters:
Every claim error delays revenue and increases administrative workload.
Goal:
95% or higher.
Coding errors, documentation gaps, and eligibility errors are the vital reasons why your clean claim rate is below the industry benchmark. You can dramatically improve the overall cash flow by fixing this single mistake.
2. First pass resolution rate:
This metric tracks how many claims get paid the first time they’re submitted—without appeals, calls, or adjustments.
Why it matters:
A low FPRR means you're spending time chasing money that should’ve been collected already.
Goal:
Above 90%.
Are you seeing that payers are repeatedly requesting additional documents or deny claims for the same reason? You should consider this as a signal like that your process requires utmost attention.
3. Days in Accounts Receivable (AR):
This metric shows how long it takes for payments to arrive after a claim is submitted. The longer the A/R cycle, the slower the business cash flow.
Why it matters:
A high A/R is a silent alarm — the longer revenue sits in limbo, the harder it becomes to collect.
Goal:
Your ideal goal should be keeping your AR days below 35 days. You are likely dealing with incorrect claims, lack of follow-up or slow claims processing if your AR is going beyond 45, 60 and 90 days.
4. Percentage of AR days:
This is one of the most important red-flag indicators. Claims older than 90 days are much harder to collect — and many eventually turn into write-offs.
Why it matters:
This number shows whether your process is proactive or reactive.
Goal:
Below 15%.
You should always aim to keep the percentage of AR days below 15%. It is important to be careful about the aging AR sitting in the over-90-day bucket. You can actually avoid such a problem by doing fast follow-up, denial management, and improved claims accuracy.
5. Rate of prior authorization approvals:
Prior authorization is a major pain point for DME suppliers. If approvals aren’t managed correctly, you lose money even before the claim is submitted.
Why it matters:
Equipment delivered without authorization approval creates avoidable denials.
Goal:
Above 97%.
Tracking this helps you understand whether your team is gathering the right documentation and meeting payer expectations.
6. Overall rate of denial:
Your denial rate shows how often payers reject claims. If this number is rising, so is lost revenue.
Why it matters:
Denials add cost and delay revenue. If not tracked, they pile up and become write-offs.
Goal:
You should always prioritize on keeping it less than 10%.
You can always identify common problem areas — coding, eligibility, documentation, modifiers, or payer-specific rules by closely monitoring major denial trends.
7. Patient collection rate:
As patient responsibility continues to rise through high-deductible plans, collecting patient payments has become just as important as payer billing.
Why it matters:
Uncollected patient payments can erode revenue faster than payer errors.
Goal:
Above 85%.
Clear communication, digital payment options, and proactive reminders can dramatically improve this number.
The truth is that most DME suppliers often lack professionals who closely monitor all the major metrics and improve your billing process. Fortunately, you can simply hire a professional DME billing company that knows what it takes to ensure the best revenue cycle management process by monitoring all the vital metrics so that you can always enjoy excellent cash flow and revenue outcomes.
Do not waste your time and hire a perfect billing partner today!
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