Definition.
NCR is the more honest cousin of GCR. By using allowed amounts (what payers contractually agreed to pay) as the denominator rather than full charges, NCR strips out the noise of artificial chargemaster levels and shows what percentage of your real revenue opportunity you captured. A healthy NCR is 95 to 99 percent at well-run physician practices.
Key points.
How NCR is calculated
Net Patient Service Revenue (payments + adjustments + write-offs that should have been billed) divided by Net Patient Service Revenue. Some definitions use payments / (allowed amount - patient responsibility).
When NCR is useful
Any provider that wants to measure execution quality of the revenue cycle independent of pricing strategy. NCR isolates the question: 'of the dollars we earned, what did we collect?'
Healthy NCR benchmarks
Physician practices: 95-99%. Hospital outpatient: 92-97%. Hospital inpatient: 88-95%. ABA: 90-96% depending on payer mix. Below 90% on any segment signals execution problems.
Why both NCR and GCR matter
GCR variance signals pricing or payer mix issues. NCR variance signals execution issues. Both are useful, for different reasons. The mistake is reporting only one.