How to Reduce Days in A/R

Days in accounts receivable (A/R) measures the average time between delivering a service and collecting payment for it. Reducing it means getting paid faster on the same work — and because collectability declines as claims age, lowering A/R days generally also increases the total amount a practice collects.

Key takeaways

A/R days measure speed; the aging buckets show where the problem actually is.
Claims become progressively harder to collect the longer they sit unpaid.
Submission lag is a common, easily fixed contributor that practices overlook.
Prioritising by age and value recovers more than working the queue chronologically.
Patient balances need their own process — they behave differently from payer claims.

What are A/R aging buckets and why do they matter?

A/R is typically grouped into buckets — 0–30 days, 31–60, 61–90, 90–120, and 120+. The distribution across those buckets tells you far more than the headline average does.

A practice with a reasonable average but a heavy 90+ bucket has a different problem than one with a slightly higher average spread evenly across current buckets. The first has a backlog of stalled claims; the second may simply have slower payers. The remedies are not the same.

Why do claims become harder to collect as they age?

Several forces compound. Payer filing and appeal deadlines approach and eventually pass. The staff who remember the details of that encounter move on to other work. Patients change insurance, addresses, or phone numbers. Documentation becomes harder to locate.

The practical implication is that aged A/R rewards urgency: the same follow-up effort applied at day 45 recovers substantially more than at day 120.

What actually reduces days in A/R?

Submit claims daily rather than in batches. Submission lag is pure, avoidable delay — every day a completed encounter waits to be billed is a day added to A/R.
Fix front-end accuracy. Eligibility and registration errors are the main reason claims fail on first submission and re-enter the cycle.
Scrub before sending. Catching an error internally costs a day; catching it via payer denial costs weeks.
Work denials on a fixed schedule, not when time allows. Denials that wait become denials that expire.
Prioritise by age and dollar value together, rather than working the queue chronologically.
Check payments against contracted rates, so underpayments are identified rather than silently posted.
Run a separate patient-balance process, with clear statements and consistent follow-up.

How should aged A/R be prioritised?

Working the oldest claims first feels systematic but often isn't optimal — some of the oldest claims are the least recoverable. Working the largest first ignores the deadlines quietly approaching on smaller ones.

A more effective approach segments the work: claims nearing a filing or appeal deadline get worked first regardless of size, then high-value claims still comfortably within their window, then the remainder grouped by denial reason so similar issues can be resolved together. Grouping by reason matters more than most practices expect — resolving twenty claims with the same root cause is much faster than resolving them individually.

How do patient balances fit in?

As patient financial responsibility has grown, the patient portion of A/R has become a larger share of total outstanding revenue — and it behaves differently from payer claims. There is no adjudication process, no remittance advice, and no appeal path. Collection depends almost entirely on clarity and timing.

Clear statements that a patient can actually understand, sent promptly and followed up consistently, materially outperform sporadic billing. The goal is steady collection handled in a way that doesn't damage the patient relationship your practice depends on.

Frequently asked questions

What are days in A/R?

Days in accounts receivable measures the average time between providing a service and collecting payment for it. It's a core indicator of how quickly a practice converts delivered care into cash.

What is a good days-in-A/R number?

Targets vary meaningfully by specialty and payer mix, so the most useful benchmark is usually your own practice's trend over time rather than a general industry figure. A rising trend and a heavy 90+ aging bucket are clearer warning signs than any single number.

Why do old claims become uncollectible?

Payer filing and appeal deadlines pass, staff familiar with the encounter move on, patients change insurance or contact details, and supporting documentation becomes harder to retrieve. Collectability declines steadily with age.

Should we work the oldest claims first?

Not purely. A better approach works claims nearing a filing or appeal deadline first, then high-value claims still within their window, then the rest grouped by denial reason so similar issues are resolved together.

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