Key Takeaways
- 01The older a claim gets, the harder it is to collect, and appeal windows start to close. AR doesn't just sit - it expires.
- 02Track days in AR and the share of AR over 90 days every month. The trend matters more than any benchmark.
- 03Of about 85 million denied in-network claims on HealthCare.gov plans in 2024, fewer than 1% were appealed (KFF analysis of CMS data). Denials nobody works turn into aging AR.
- 04Some old claims can still be recovered. It depends on the claim's age, the payer, and whether the denial reason can still be corrected.
- 05The signal to outsource AR isn't a crisis - it's a growing over-90 bucket, a rising write-off rate, and staff spending more time on billing administration than on patient care.
Right now, your practice has money sitting in accounts receivable - claims submitted, services rendered, payment not yet received. Some of that money will come in within the next 30 days. Some of it is already at risk. And some of it is statistically unlikely to ever be collected. Financially healthy practices know exactly which bucket each dollar falls into - and act before it moves into the unrecoverable category.
If you're not actively managing your medical accounts receivable, you're not just waiting for payment. You're watching revenue expire.
What AR Actually Means for Your Practice
Accounts receivable in medical billing is the total money owed to your practice for care you've already provided - from insurers, patients, Medicare, and Medicaid. It's money that hasn't been paid yet. Every claim you submit creates an AR balance. When it gets paid, it clears. When it doesn't, it ages. Aged AR is one of the most expensive silent problems a practice can have.
What makes medical AR different from any other industry is the number of parties involved and the complexity of each payment decision. A commercial insurer can deny a claim for dozens of reasons - a missing modifier, an authorization not obtained, a diagnosis code that doesn't support the procedure. A patient's balance depends on their deductible, plan year, and out-of-pocket maximum. Every payer and every claim requires follow-up - and if that follow-up doesn't happen within the right window, the money starts to disappear. This is why revenue cycle management is a full-time, specialized function.
The 90-Day Cliff Nobody Warns You About
Medical AR loses value over time, and it loses it fast. A claim at 30 days is nearly always recoverable, and one at 60 days has usually hit a denial or a follow-up gap but is still fixable. Past 90 days it gets materially harder to collect, and past 120 days harder still.
Appeal deadlines vary by payer. Medicare allows 120 days from when you receive the notice, and Aetna's provider dispute standard is 180 days. Let a denied claim sit past that window and the appeal right is gone, and patient balances also get harder to collect the longer a patient goes without hearing from you.
| AR Age | Recoverability | What's Usually Happening | Action Required |
|---|---|---|---|
| 0-30 days | Near certain | Claim submitted, awaiting standard processing | Monitor - no action needed yet |
| 31-60 days | Strong | Pending payment or soft denial - still easily recoverable | Verify status, resubmit if denied |
| 61-90 days | Slipping | Likely a denial, missing info, or follow-up gap | Immediate follow-up, appeal if needed |
| 91-120 days | At risk | Claim has been ignored or appeal window is closing | Urgent intervention - appeal deadlines near |
| 120+ days | Poor | Appeal windows mostly closed, patient debt harder to collect | Recovery attempt - accept some write-offs |
What Healthy AR Looks Like
The main measure is days in AR: the average number of days from service to payment. Practices without active AR management often miss it creeping up, because the money does eventually come in, just slowly.
The second measure is the share of your AR that is over 90 days old. If that share grows month over month, claims are aging faster than they are being worked. The real question is how to stop the same thing happening to the claims you submit this week.
- Days in AR
- Days in AR (also called Days in Accounts Receivable) is the average number of days between the date of service and the date payment is received. It is calculated by dividing total AR by average daily charges. A rising number means claims are aging faster than they are being worked.
- Days in AR - review it monthly and watch the direction.
- Share of AR over 90 days - the part of your balance most at risk.
- Denials by payer and reason - the pattern tells you what to fix upstream.
- Share of claims paid on first submission - a falling number means front-end problems.
- Net collection rate - what you collect against what you are owed under your contracts.
Why AR Ages - The Real Reasons
When a practice's AR starts aging, there are usually a handful of root causes - and most of them aren't obvious from looking at the AR report itself. You see the number. You don't always see what created it. Understanding the cause is the only way to stop the same claims from aging again next month.
- 01Denials that never got worked. The most common contributor to aging AR is denials that got filed, got denied, and never got appealed. In a busy practice, denied claims get triaged - high-dollar ones get attention, and low-dollar ones get written off because chasing them takes staff time. Across a month of claims, those write-offs add up. The pattern of what gets denied is worth more to fix than any single claim.
- 02Insurance verification gaps at the front end. A lot of AR problems start before the patient walks in the door. If eligibility wasn't verified before the appointment - or was verified but not thoroughly - claims go out to inactive policies, wrong plan years, or payers who don't have the right provider information on file. Run insurance verification before every scheduled appointment, not as a spot check.
- 03No systematic AR follow-up process. AR follow-up is the process of proactively checking on unpaid claims - calling payers, checking status, resubmitting after corrections, escalating appeals. In practices where billing staff also handle intake and patient calls, systematic follow-up is the first thing that falls behind. A dedicated follow-up workflow that prioritizes by payer, age, and dollar amount is what keeps AR from aging.
- 04Patient balance collection. With high-deductible health plans, patients owe more of each bill. A balance is harder to collect after the visit than at the time of service, and that gap lands in your AR.
Old AR: What's Still Recoverable
If you're looking at your AR aging report and seeing significant balances in the 90-day, 120-day, or older buckets, the question isn't why it happened. The question is how much is still worth pursuing. That depends on three things: how old the claims are, which payer is involved, and whether the denial reason is still correctable.
Start with the claims closest to their appeal or filing deadline, then work back. Claims past every deadline are usually not worth more staff time.
When to Outsource AR Management
Most practices reach a point where in-house AR management stops scaling. The billing staff is capable, but they're also handling phones, prior authorizations, patient check-ins, and scheduling. AR follow-up is the first thing that gets deprioritized when the day gets busy. And unlike a missed appointment, nobody calls you when a claim goes unworked for 45 days. It just ages quietly.
The signal to outsource isn't a billing crisis - it's the slower, quieter signs. Collections feel lower than they should relative to your volume. Write-offs are creeping up. Staff spend more time on billing administration than on patient care. The over-90 AR bucket keeps growing month over month. These are early indicators the in-house model is hitting its ceiling.
| With Dedicated AR Management | Without Dedicated AR Management |
|---|---|
| Every claim worked on a defined follow-up schedule | Follow-up happens when staff have time - which is rarely |
| Denials appealed within payer windows, every time | Low-dollar denials written off instead of appealed |
| Days in AR holds steady - cash flow is predictable | Days in AR creeps up without an alarm |
| AR aging report shows mostly 0-30 day balances | Over-90 bucket grows quietly every month |
| Old AR recovered before appeal windows close | Old AR gets written off - money earned but never collected |
| Root cause analysis stops the same denials recurring | Same denial reasons repeat month after month |
How Medtransic Manages AR for Medical Practices
Medtransic handles AR follow-up, denials and patient balances as part of our billing service, from claim submission through final payment. We charge 4-8% of collections, and every client has a dedicated account manager.
We work inside the system you already use, such as SimplePractice or TherapyNotes, so claim submission continues while the transition happens.
If you want to know what is sitting in your AR, request a free billing review.
Sources & References
- KFF, Claims Denials and Appeals in ACA Marketplace Plans in 2024 - denial and appeal rates on HealthCare.gov plans
- 42 CFR 405.942 - Medicare redetermination, 120 days from receipt of the initial determination
- Aetna, Provider Disputes and Appeals - the 180-day provider dispute standard
- Sources checked October 2026.