# Cost to Collect (CTC): Definition and Benchmarks Canonical: https://www.flobotics.io/blog/cost-to-collect-ctc-explanation Author: Karl Mielnicki Published: 2026-05-18 Updated: 2026-09-01 --- [Home](https://www.flobotics.io/)/[Articles](https://www.flobotics.io/blog)/Cost to Collect (CTC): Definition and Benchmarks CTO Notes [Healthcare](https://www.flobotics.io/blog?category=healthcare)[RCM](https://www.flobotics.io/blog?category=rcm) # Cost to Collect (CTC): Definition and Benchmarks [Karl MielnickiCTO & Co-Founder of Flobotics](https://www.flobotics.io/our-editorial-team#mielnicki) Published May 18, 2026Updated September 1, 2026 On this page - [What Is Cost to Collect (CTC)?](#what-is-cost-to-collect-ctc) - [Why CTC Is the Definitive RCM Efficiency Metric](#why-ctc-is-the-definitive-rcm-efficiency-metric) - [Industry Benchmarks](#industry-benchmarks) - [What Drives CTC Higher](#what-drives-ctc-higher) - [How Automation Reduces CTC](#how-automation-reduces-ctc) Book a callWant to talk about it? 30 minutes with someone who builds automations, not a sales script. [Talk to us →](https://www.flobotics.io/contact) Share [](#)[](#) ## What Is Cost to Collect (CTC)? Cost to Collect (CTC) is the total operational cost a healthcare practice or health system incurs to successfully collect payment for services rendered, expressed as a percentage of net revenue collected. It captures everything that goes into running the revenue cycle: billing staff salaries, technology subscriptions, clearinghouse fees, denial management work, collections costs, and all administrative overhead attributable to the revenue cycle function. CTC puts a dollar value on how well — or poorly — a healthcare organization's revenue cycle is performing. A high CTC means you are spending too much to collect what you are owed. A low CTC means your processes are clean, your staff are productive, and your technology is doing meaningful work. ## Why CTC Is the Definitive RCM Efficiency Metric Unlike metrics that measure a single process, CTC captures the aggregate cost of the entire revenue cycle operation — making it uniquely valuable for executive decision-making. It translates RCM performance directly into financial language that CFOs and boards understand. CTC is also the primary metric for evaluating automation ROI. When a healthcare organization automates eligibility verification, claims submission, or payment posting, the labor and rework costs displaced are directly measurable in CTC reduction. A practice reducing CTC from 8% to 4% of net collections while maintaining revenue frees 4 cents of every dollar for clinical investment or margin improvement. ## Industry Benchmarks - Best-in-class: 3–4% of net patient revenue - Acceptable (independent practice): 4–6% - Industry average: 6–8% - Underperforming: 8–12%+ — indicates structural problems in staffing, process, or technology A physician group collecting $10M annually at 8% CTC spends $800,000 on revenue cycle operations. The same practice at 4% spends $400,000 — a $400,000 annual difference achievable through process and technology improvement without touching clinical volume. Let’s talk! It’s a 30-minute call. Within the first 15, we’ll know if automation works for you. [Book a call →](https://tidycal.com/team/flobotics/flobotics-intro-call-w) ## What Drives CTC Higher - High denial and rework rates: Each denied claim requiring manual investigation and resubmission adds direct labor cost - Manual payment posting: ERA/EOB processing requiring staff to manually match payments to claims - Paper-based workflows: Any process step involving printing or manual data entry is inherently more expensive - High AR days: Claims that age require progressively more expensive collection intervention - Technology fragmentation: Staff working across disconnected systems spend significant time on reconciliation that integration would eliminate ## How Automation Reduces CTC [RCM automation programs](https://www.flobotics.io/rcm-automation) reduce cost to collect by eliminating manual labor from high-volume, rules-based processes across the entire revenue cycle: - Automated [eligibility verification](https://www.flobotics.io/agents/eligibility-check-automation) eliminates manual coverage lookups — one of the highest-volume front-end staff tasks - [Automated claims scrubbing and submission](https://www.flobotics.io/agents/claims-management-automation) reduces rework rates directly - Automated [payment posting](https://www.flobotics.io/blog/payment-posting-cash-posting-explanation) from ERA feeds processes hundreds of payments per hour without staff involvement - [Denials management automation](https://www.flobotics.io/agents/denials-management-automation) identifies and routes denied claims for resolution without manual triage Practices automating core RCM workflows typically achieve 30–50% CTC reductions within 12 months. [Our case studies document specific results.](https://www.flobotics.io/case-studies) Written byKarl Mielnicki CTO & Co-Founder of Flobotics. Talk to us ## Show us the process your team is tired of doing manually. Let Karl, our CTO, take a look. It’s 30 minutes with the person who designs the automations, not a sales script. [Book a call with Karl →](https://tidycal.com/team/flobotics/flobotics-intro-call-w)[Send us a message](https://www.flobotics.io/contact) 30-minute callKarl MielnickiCo-founder, CTO Walk me through the process your team does by hand. I’ll tell you whether it’s worth automating and how I’d approach it. Karl Keep reading ## More insight The latest industry news, interviews, technologies, and resources. [ HealthcareRCM ### Net Collection Rate (NCR): Formula and Benchmarks Net Collection Rate (NCR) explained: the RCM metric measuring collectible revenue actually captured. Best practice is 95-99% - below that, revenue leaks. Bart TeodorczukJune 04, 2026 ](https://www.flobotics.io/blog/net-collection-rate-ncr)[ HealthcareRCM ### Days in Accounts Receivable (DAR): Formula and Benchmarks Days in Accounts Receivable (DAR) guide: why 30-35 days is best practice and anything above 50 signals collection trouble. Krzysztof SzwedMay 21, 2026 ](https://www.flobotics.io/blog/days-in-accounts-receivable-dar-explanation)[ HealthcareRCM ### Claim Turnaround Time (CTT): Benchmarks and Root Causes Claim Turnaround Time (CTT), explained: why 14-21 days is best-in-class and 45+ days signals a billing cycle problem. Krzysztof SzwedMay 04, 2026 ](https://www.flobotics.io/blog/claim-turnaround-time-ctt-explanation) [All articles →](https://www.flobotics.io/blog)