Accounts receivable (AR) is the money owed to your practice for services already provided. An AR aging report groups that money by how long it has been outstanding. Read regularly, it is one of the simplest ways to see whether your billing is keeping up or falling behind.
The aging buckets
Most practice management systems group AR into buckets based on the date of service or the date the claim was first billed:
- 0–30 days. Recently billed claims. Most should still be in normal processing.
- 31–60 days. Many clean claims have been paid by this point. Anything still open deserves a status check.
- 61–90 days. Claims here often have a problem: a rejection that was never worked, a request for information, or a denial that has not been addressed.
- 91–120 days and 120+ days. The oldest balances. They are generally harder to collect, and some may be approaching or past a payer's filing or appeal limits.
Check whether your report ages by date of service or by billing date. The two can tell different stories, especially if charges are entered late.
Split insurance AR from patient AR
Insurance balances and patient balances behave differently and need different actions. A good aging report lets you view them separately, and view insurance AR by payer. One payer with an unusual amount of old AR often points to a specific, fixable issue.
Five questions to ask every month
- Is total AR rising or falling compared with your charges? AR that grows faster than charges suggests collections are slowing.
- What share of AR is over 90 days? Watch the trend over time rather than a single month.
- Which payers hold the most old AR? Look for patterns by payer, location, or provider.
- Are there large individual balances? A handful of high-dollar claims can deserve priority attention.
- What is the status of the oldest claims? Every old claim should have a documented next step, or a clear reason it is no longer collectible.
A simple measure: days in AR
Days in AR estimates how long, on average, it takes to collect. A common way to calculate it is to divide total AR by your average daily charges (for example, charges for the last three months divided by the number of days in that period). Compare your own trend over time; benchmarks vary by specialty and payer mix, and calculation methods differ, so comparisons with other practices should be made carefully.
Turning the report into action
- Build work queues from the aging report, prioritized by balance, age, and filing deadlines.
- Document every follow-up action and next step on the account.
- Feed what you learn back into the front end. If old AR keeps coming from the same denial reasons, fix the cause.
- Review the report on a fixed schedule so problems are caught while they are still easy to fix.
If your aging report shows balances piling up in the older buckets, our AR follow-up service and revenue cycle reporting can help. You can also request a free billing and AR review.