Production was up in September. The bank balance was not. The collection rate is where those two facts meet, and it comes in two versions that get mixed up on most reports.
The formulas in words
Gross collection rate equals collections for the period, divided by gross production for the same period, times 100.
Net collection rate equals collections, divided by gross production minus contractual adjustments, times 100. Contractual adjustments are PPO write-offs and similar amounts you agreed in advance not to collect. Courtesy discounts, bad debt write-offs and refunds are not contractual; leave them in the denominator so they show up as uncollected.
Worked example: gross production $118,000, contractual adjustments $26,000, collections $87,000. Gross rate: 87,000 divided by 118,000 is 73.7 percent. Net rate: 87,000 divided by 92,000 is 94.6 percent. The 5.4 points missing from net is about $5,000 that should have been collected and was not.
The calculator
Where each number comes from
Open Dental: Reports, then Production and Income, gives production, adjustments and income for the date range, and the adjustment types are listed separately so you can pick out the contractual ones. Open Dental records every adjustment in adjustment with a type, and every payment in payment and claimpayment. Dentrix: the Practice Analysis report and the Day Sheet totals carry production, adjustments and payments. Eaglesoft: the end of day and production reports; every transaction sits in transactions_header with a type, which is how adjustments are separated from payments.
One caution on timing. Collections in September pay for some of August’s production, so a single month swings. Use a rolling three months, or compare the same month a year earlier.
What a drop usually means
A net rate that slides a few points is rarely one big unpaid bill. It is usually claims that were never sent, claims sitting over 90 days, patient balances nobody asked for at check-in, or a change in who posts adjustments. Check the aging report first, then the adjustment report by user. The net collection rate guide walks through each.
Calibic’s AR card (LIVE) shows collections against collectable production, claims over 90 days with the dollar total, and adjustments by type and by user, read from your practice software without writing to it. Protect (LIVE) flags a deleted or edited payment the day it happens. See insurance benefits, claims and AR, or the overhead calculator for the cost side.