Why Does My Medical Practice A/R Keep Climbing? A 13-Question Diagnostic for Rising Accounts Receivable

You open the monthly aging report. Two months ago: $397,000. Last month: $425,000. This month: $468,000. Collections are still coming in. Claims are being submitted. The billing team says accounts are being worked. Yet the number keeps getting bigger. The report is not the diagnosis; it is the symptom. This guide walks through how to find the process that is creating the balance.

First: A/R growth is not automatically bad

Suppose your practice adds two providers. Monthly charges rise 40%, patient volume rises, collections rise — and total A/R will probably rise too. A larger practice carries more receivables than a smaller one. That does not mean billing performance deteriorated. Total A/R dollars alone are not enough to diagnose performance.

Practice A’s A/R is larger, but production is larger too and the aging profile is stable; it is carrying a proportionately bigger receivable. Practice B’s A/R is larger while days in A/R and aged A/R deteriorated despite flat production — the money is getting older.

Start with three numbers

Total A/R — how many dollars remain unresolved. Days in A/R — how long, relative to revenue, receivables stay open. A/R over 90 days — how much of the receivable inventory has moved into older buckets.

HFMA’s MAP Keys treat aged A/R as a percentage of billed A/R and net days in A/R as standard revenue-cycle trending indicators, and for ambulatory and physician organizations age billed A/R from the date of service in 0–30, 31–60, 61–90, 91–120 and over-120-day buckets (HFMA MAP Keys). MGMA-published physician-practice KPI guidance cites approximately 30–40 days in A/R (a range it credits to the AAFP) and less than 10% of A/R over 90 days as practical benchmarks (MGMA, Top KPIs Physician Practices Should Be Monitoring). Benchmarks should be read in the context of specialty, payer mix, growth and service mix.

Think of A/R as an inventory of unresolved money. Every open balance is money that has not completed the revenue cycle — the payer or patient has not paid, the claim is denied or rejected, an appeal is pending, a payment is unposted, a balance needs an adjustment, or nobody followed up. The basic equation is simple: beginning A/R + new receivables − payments − resolutions = ending A/R. If ending A/R keeps growing, either more is entering or less is leaving. That narrows the investigation immediately.

The 13 diagnostic questions

1. Are we simply producing more?

Before blaming billing, compare visits, charges, providers, locations, procedures, monthly collections and A/R over the same period. Charges up 35% with A/R up 20% is a very different picture from flat charges with A/R up 35%. Never review the A/R balance in isolation.

2. Are charges getting out the door?

The revenue cycle can slow before the payer ever sees a claim: unsigned encounters, coding backlogs, missing charges, edit queues, claims held for information. Run the charge-lag test on a sample of claims — date of service, date the charge was entered, date the claim was created, date the clearinghouse accepted it, date the payer received it. A claim cannot be paid while it is sitting inside your own organization.

3. Are claims being rejected?

A rejection means the claim failed before normal payer adjudication — invalid subscriber information, incorrect payer IDs, missing provider information, invalid NPI data, formatting problems, enrollment issues or other missing data. Ask today: how many rejected claims exist, what is the dollar value, how old are they, and what are the top rejection reasons? Then ask: who owns the queue, how quickly are rejections corrected, and is the same rejection being created repeatedly?

4. Are denials increasing?

If claims reach the payer but increasingly come back unpaid, A/R accumulates quickly. Break denial trends down by payer, provider, location, procedure, reason and dollar amount. One denial is a claim problem; fifty similar denials are a process problem. If forty claims suddenly deny for authorization, working forty individual claims may recover some money — but if nobody identifies why the authorization problem keeps happening, another forty arrive next month. The team looks busy while the source keeps creating new balances.

5. Are we fixing denials or just touching them?

A denial can have many notes and still make very little progress. “Reviewed claim, appeal needed. Appeal pending. Checked payer portal, still pending.” Four touches do not mean the account has advanced. Each follow-up should have a clear action, reference number, deadline, next step or escalation path.

6. Is one payer causing the problem?

HFMA tracks aged A/R by payer group precisely because an organization-wide number can hide payer-specific deterioration.

You may not have an organization-wide A/R problem. You may have a Blue Cross problem.

7. Is credentialing creating A/R?

Credentialing problems introduce themselves as billing problems: claims go out, claims deny, billing starts working them, but the cause is upstream — provider not linked to the group, provider not loaded at a location, an effective-date problem, a terminated enrollment, a missed revalidation, a new provider still pending, a payer system not updated, or incorrect group information. You cannot follow up your way out of an unresolved enrollment problem; it has to be fixed at the credentialing and enrollment level.

8. Are payments coming in but not being posted?

The payer may already have sent the money. Unposted ERAs, unapplied cash, missing EFTs or paper checks, posting backlogs, incorrect posting, unallocated patient payments and credit balances all leave receivables open and make the aging report overstate collection problems. HFMA identifies credit-balance performance as one indicator of payment-system and posting problems. If cash is in the bank while A/R remains open, that is a posting problem rather than a collection problem — still a problem, different problem.

9. Is patient A/R growing?

Insurance A/R and patient A/R behave differently. As deductibles, coinsurance and other patient responsibility accumulate, balances migrate from insurance to the patient and get harder to collect as they age. Are copays collected at check-in? Are deductibles estimated? Are statements sent promptly, and are text or portal payments available? Are payment plans offered appropriately? Are small balances accumulating indefinitely? What percentage of old A/R is patient responsibility? MGMA’s benchmarking notes that stronger-performing groups carry more A/R in younger aging categories and less in the 120+ bucket, which reinforces the value of collecting patient responsibility earlier.

10. Are we being underpaid?

A claim can be technically paid and still leave money behind. If the expected allowed amount is $800 and the payer reimburses $610, the residual sits unless someone validates reimbursement against the contract. Look for unexpected residual insurance balances, frequent partial payments, inconsistent contractual adjustments, payers paying below the expected allowance, incorrect fee schedules, incorrect multiple-procedure reductions and missing modifiers. Payment does not automatically mean correct payment.

11. Is old A/R actually being worked?

Ask for the ten largest balances over 90 days, then ask what happened on each one. You should hear specifics: “$18,400 with Aetna. Records requested September 12, submitted September 14, receipt confirmed September 18, medical review pending October 2, next escalation October 16.” That account is being managed. “Aetna — pending” tells you almost nothing.

12. Does every balance have an owner?

Who owns this balance? What happens next? When does it happen? If those three questions cannot be answered for a large aged balance, the balance is not being worked — it is being carried.

13. Has staffing changed?

A/R often reveals staffing problems months after they begin. A biller quits, a position stays vacant, one person covers two roles, an outsourced team turns over, or claim volume grows without enough capacity. At first claims still go out and payments still arrive. Then 31–60 grows. Then 61–90. Then 90+. A/R is a lagging indicator: the operational failure may have started months before the aging report made it obvious. (On what turnover does to an account, see Who is actually doing your medical billing?)

Read the shape of the aging report

A single total compresses a complicated workflow into one figure; aging buckets restore the timeline. When newer A/R grows but old A/R stays stable, the issue is volume or recent slowing. When older buckets grow, unresolved work is surviving multiple billing cycles. Do not ask only “how much A/R do we have?” Ask: where in the aging curve is growth occurring, and what process should have resolved those balances before they got there? Your goal should not be to become excellent at recovering ancient A/R. It should be to stop creating so much of it.

Recovery versus prevention: run both tracks

When A/R is climbing, practices naturally focus on recovery — the money is sitting out there, go collect it. But suppose your team recovers $200,000 of aged A/R while the same broken processes create $250,000 of new aged A/R. The team worked extremely hard and the problem still got worse.

Recovery cleans up yesterday; prevention protects tomorrow. Every serious A/R project needs both — recover only, and the broken process keeps creating new inventory; prevent only, and money stays stranded in the existing aging. Where legacy balances are large, a dedicated old A/R recovery engagement can run the recovery track while the operating team fixes the source.

The A/R diagnostic tree

Start broad, then keep narrowing until a dollar balance has a cause and an owner.

The 15-minute A/R diagnostic

Pull your current aging report and record total A/R, days in A/R, A/R over 90 days (dollars and percent), A/R over 120 days, patient A/R and insurance A/R. Then put today’s total A/R, days in A/R, over-90 percentage and over-120 percentage next to the same figures from six months ago and mark each one up, down or flat. The first answer you need is whether the trend is improving or deteriorating. One month is a photograph; six months is a movie.

Next, follow the aged dollars. List the five payers responsible for the most A/R over 90 days with the primary cause for each, then the three biggest root causes with the estimated A/R each one affects. Do not guess — pull the dollars. “UnitedHealthcare has been terrible” is not yet a diagnosis; how many dollars? “It is credentialing” is not yet a diagnosis; which providers, which payers, which balances? The loudest issue is not always the largest. And if your team cannot identify the three biggest causes of aged A/R, that itself is useful information.

Build a 30-day A/R action plan

Do not try to fix everything at once; attack the few problems producing most of the financial damage. For each: the problem, dollars at risk, root cause, owner, immediate recovery action, prevention action, deadline and success measure. For example — Problem: Blue Cross authorization denials. Dollars at risk: $78,000. Root cause: authorizations are not consistently updated when procedures change. Recovery: review denied claims, pursue retrospective authorization where permitted, appeal eligible claims, escalate high-dollar cases. Prevention: add authorization verification before procedure scheduling and again before claim submission. Success measure: reduce Blue Cross authorization-denial dollars by 75% within 60 days.

Red flags: what you hear and what to ask next

Vague explanations should become specific dollars, causes, owners and next actions.

What leadership should review every month

Total A/R; days in A/R; A/R over 90 and over 120 days; A/R by payer; patient versus insurance A/R; top aged balances; denial and rejection trends; major credentialing issues; unapplied or unposted payments; and the trend against prior months. A healthy revenue cycle should not spend its energy excavating problems created six months ago. Great A/R management is not just excellent recovery — it is making sure fewer balances need rescuing in the first place.

Five questions your billing team should be able to answer

1. Why? Not generally — specifically.
2. Which payers are driving it? Follow the dollars.
3. What are the three largest root causes? Patterns, not isolated claims.
4. What are we doing about the existing A/R? That is recovery.
5. What are we changing so it stops happening? That is prevention.

If nobody can answer those five questions, that may be the bigger problem.

Your A/R report is trying to tell you something

If your A/R keeps climbing, do not just work harder. Working more accounts, adding staff or running an A/R blitz can all help — but first understand the problem, or you simply become more efficient at cleaning up the same failure over and over. Trend → payer → aging → cause → owner → recovery → prevention.

Not sure why your A/R keeps growing?

This is exactly the kind of problem AMS Solutions evaluates when reviewing a practice’s revenue cycle: A/R aging, payer concentration, denial patterns, rejections, credentialing-related balances, patient A/R, payment-posting issues, follow-up workflows and trends. The goal is not simply to tell you your A/R is high; it is to tell you why, and what needs to change to bring it back under control. Bring us your aging report, payer mix, denial data and current workflow for a no-obligation A/R and revenue-cycle review, or call (866) 488-6308. AMS Solutions is physician-founded (1992), Dallas-headquartered, with an in-house global team, US-led, and revenue cycle management, credentialing and old A/R recovery under one roof.

FAQs

What is a good days in A/R for a medical practice?

MGMA-published KPI guidance cites roughly 30–40 days in A/R as a practical physician-practice target, with less than 10% of A/R over 90 days. Specialty, payer mix and growth change what is realistic, so trend your own numbers over six months rather than judging a single month against a benchmark.

Why is my A/R increasing even though collections are up?

Either production grew (more receivables entering, which is normal if days in A/R and the over-90 share are stable) or resolution slowed. Check days in A/R and the aging buckets: if older buckets are growing while production is flat, the cause is usually rejections, denials, weak follow-up, a problem payer, credentialing gaps, unposted payments, patient balances or underpayments.

How do I find out which payer is driving my aged A/R?

Pull A/R over 90 days by payer, not in total. A single payer often accounts for half the aged balance, which points to a contract, enrollment, authorization or workflow problem specific to that payer rather than an organization-wide failure.

Can credentialing problems cause A/R to grow?

Yes. A provider not linked to the group or a location, an effective-date gap, a missed revalidation or a terminated enrollment produces denials that billing follow-up cannot fix. The enrollment has to be corrected upstream; until it is, every claim for that provider and payer adds to A/R.

Should I hire more A/R staff if A/R keeps rising?

Possibly, but first determine why the A/R is being created. If the cause is rejections, authorization failures, charge lag or an enrollment gap, more follow-up staff recovers some money while the source keeps producing new aged balances. Run recovery and prevention at the same time.

About the author. Brad Becker, CRCR, is Regional Billing Manager at AMS Solutions, a physician-founded medical billing and credentialing company headquartered in Dallas since 1992. Sources: HFMA MAP Keys; MGMA, Top KPIs Physician Practices Should Be Monitoring; MGMA patient balance collection guidance. Benchmarks should be interpreted in the context of specialty, payer mix, growth, service mix and local market conditions; this guide is an operational diagnostic resource, not a universal performance standard.