There are many elements to your practice’s revenue cycle management, but one of the central players is the accounts receivable or A/R, as we call it. From the moment a patient’s invoice goes out the door, the clock starts ticking! Understanding how time is a crucial factor in your accounts receivable management can help optimize your revenue and avoid financial losses.
Accounts receivable (A/R) are the invoices or reimbursements owed to your medical practice, hospital or healthcare organization, and strong medical billing services help ensure those balances are followed up and collected efficiently. Once your medical billing team submits a claim to a health insurance company or charges a patient on your behalf, the A/R process begins. After the bill is reimbursed to your practice, the account is no longer in A/R.
The longer an account stays in A/R, the less money your practice collects, which is why many providers explore medical billing outsourcing to improve follow-up speed and reduce aging balances. If this metric piles up and after writing off “bad debt”, your business’s lost revenue will increase, resulting in less cash flow to maintain operations and continue providing care to your patients.
Aging in A/R is a metric used in healthcare revenue cycle management to track the time of outstanding accounts receivable, and understanding how medical billing companies work can help practices improve claim follow-up and shorten payment timelines. It is a vital report that categorizes outstanding invoices by the length of time they have been unpaid. This allows to identify overdue accounts, how long they have been outstanding and the data obtained is critical for managing cash flow, identifying trends in payment patterns, prioritizing collections efforts and keeping track of your revenue cycle’s health.
In healthcare RCM, we categorize A/R based on timeframes, usually in 30-day buckets:
Our RCM industry experts recommend keeping your average days in A/R to 35 or less, and the unpaid claims older than 90 days to 10% or less.
If your aging buckets keep growing, AR and collections support can help you tighten follow-up and improve timely reimbursement.
Reducing A/R aging in healthcare starts with consistency across the entire revenue cycle. Practices should verify insurance eligibility before appointments, collect accurate patient information at check-in, and submit clean claims as quickly as possible after services are rendered. Even small front-end errors can lead to denials, delayed reimbursements, and aging balances that become harder to recover over time.
It is also important to monitor claims status regularly instead of waiting for unpaid balances to build up. Teams should review aging reports by payer and by claim age, prioritize high-value accounts, and follow up quickly on claims approaching the 60-day and 90-day marks. This type of disciplined workflow helps prevent receivables from slipping into older buckets where collection rates typically decline.
Patient balances should be managed with the same urgency. Clear statements, timely reminders, and accessible payment options can improve patient collections and reduce outstanding self-pay accounts. In addition, practices should track key performance indicators such as days in A/R, denial rate, and percentage of A/R over 90 days.
When internal teams do not have the time or bandwidth to maintain this level of follow-up, outside billing support can help close gaps, improve collections, and create a more predictable cash flow.
