Accounts Receivable in Medical Billing: How Much of What You're Owed Is Already Gone

By Medtransic Editorial Team | February 17, 2026 | 13 min read

Quick Summary: Most practices don't have an AR problem — they have an aging AR problem. Claims older than 90 days collect at half the rate. Older than 120 days, the odds drop to 1 in 4. Here's how to know where your practice stands, and what's still recoverable.

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, depending on how long it's been sitting, is statistically unlikely to ever be collected. The average medical practice has between 60 and 90 days worth of revenue tied up in AR at any given time. The practices that stay financially healthy are the ones that know exactly which bucket each dollar falls into — and take action 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 simply the total amount of money owed to your practice for care you've already provided — from insurers, from patients, from Medicare and Medicaid — 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. And in healthcare, aged AR is one of the most expensive silent problems a practice can have.

What makes medical AR different from AR in 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 that wasn't obtained, a diagnosis code that doesn't support the procedure in their system. A patient's balance depends on their deductible, their plan year, whether they've hit their out-of-pocket maximum. Medicare has its own rules. Medicaid has different rules by state. Every payer, every patient, 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 for medical practices is a full-time, specialized function, not an afterthought.

The 90-Day Cliff Nobody Warns You About

Here is the most important thing to understand about medical AR: it loses value over time, and it loses value fast. A claim that's 30 days old is nearly always recoverable. A claim that's 60 days old has probably hit a denial or a follow-up gap — but it's still very fixable. A claim that crosses 90 days unpaid? The collection rate drops to roughly 50% of face value. Cross 120 days, and you're looking at a 25% collection rate on average. That's not a billing problem. That's revenue evaporating from claims you already worked for.

The reason this happens isn't mysterious. Most denials have a filing deadline for appeals — typically 60 to 180 days depending on the payer. Let a denied claim sit past that window and the appeal right is gone. Patient balances have a collection curve too — the longer a patient goes without hearing from your practice about an outstanding balance, the less likely they are to pay it voluntarily. And older AR is deprioritized by billing staff who are focused on new claims. The 90-day pile doesn't scream — it just quietly becomes a write-off.

The practices that lose the most aren't the ones with high denial rates. They're the ones with adequate denial rates but poor follow-up — claims that got denied and nobody chased them, patient balances that got a statement and nothing else. The money was there. The window to recover it just quietly closed.

What Healthy AR Looks Like

The benchmark for a healthy practice is what's called "days in AR" — the average number of days it takes from when you provide a service to when you get paid. The American Academy of Family Physicians recommends keeping days in AR below 40. Best-in-class practices run at 28–35 days. The national average for independent practices is 55–65 days. Many practices running without active AR management are sitting at 70–90 days without realizing it — because the money does eventually come in, just slowly, and the shortfall gets absorbed into overhead rather than flagged as an AR problem.

• <28 days Medtransic Average Days in AR - vs. 55–65 day industry average
• <3% Denial Rate - vs. 8–12% industry average
• 8–14% Revenue Recovery - Typical new client AR audit finding

Another number worth knowing: the percentage of your AR that's over 90 days old. In a healthy practice, less than 15–20% of total AR should sit beyond 90 days. If your over-90 bucket is 30%, 40%, or higher, a meaningful portion of your outstanding balance is already statistically impaired — and the real question isn't how to collect it, it's how to stop the same thing from happening to the claims you're submitting this week.

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.

Denials 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 — the high-dollar ones get attention, the mid-range ones sometimes get overlooked, and the low-dollar ones often get written off because chasing a $45 denial costs more in staff time than it pays. Multiply that pattern across hundreds of claims a month and the write-offs add up. Medtransic's denial management process works every denial regardless of dollar amount, because the pattern of what gets denied — the systematic errors — is more valuable to fix than any single claim.

Insurance 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. These claims don't get paid. They come back with eligibility errors that are time-consuming to untangle, especially when the date of service was 60 days ago. Medtransic's insurance verification process runs before every scheduled appointment, not as a spot check.

No Systematic AR Follow-Up Process

AR follow-up in medical billing is the process of proactively checking on unpaid claims — calling payers, checking claim status, resubmitting after corrections, escalating appeals. In practices where billing staff are also handling intake, patient calls, and other administrative work, systematic AR follow-up is the first thing that falls behind. Claims sit. Days pass. The 60-day window becomes 90, then 120. A dedicated AR follow-up workflow — one that prioritizes by payer, age, and dollar amount — is the difference between a 35-day AR and a 75-day AR.

Patient Balance Collection

With the rise of high-deductible health plans, the patient portion of every bill has grown significantly. A patient who was responsible for a $150 copay five years ago may now owe $800 toward their deductible on the same visit. Research shows patient balance collection rates drop to around 57% when patients are billed after the fact rather than informed and collected at the time of service. That gap — the 43% that doesn't come back — lands directly in your AR and ages fast, because patients don't respond to statements the way insurers do.

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 did this happen." The question is "how much of this is still worth pursuing." The answer depends on three things: how old the claims are, which payer is involved, and whether the denial reason — if there was one — is still correctable.

• 90–120 day claims with a correctable denial reason: These are the highest-value recovery targets. A coding error, a missing authorization number, a wrong subscriber ID — these can be corrected and resubmitted if the payer's appeal window is still open. Most commercial payers allow appeals up to 180 days from the date of service. Medicare allows up to 120 days for redetermination.
• 90–120 day claims with no response from payer: These need immediate status checks. A claim showing as pending at 90 days is unusual — it may have been lost in transmission, filed to the wrong clearinghouse, or stuck in a payer queue. These are fully recoverable with the right follow-up.
• 120+ day claims with correctable errors: Still worth pursuing if the appeal window is open. The key is acting immediately — every day past 120 is a day closer to the window closing permanently.
• Patient balances over 90 days: Collection rates drop sharply here, but a structured outreach — phone call, payment plan offer, clear statement — recovers more than a passive statement cycle. Balances over 180 days typically need a collections decision.
• Claims over 180 days with closed appeal windows: These are generally write-offs. The lesson is stopping the same aging pattern on current claims — not dwelling on what's already gone.

When Medtransic takes over a practice's billing, we run a full retroactive audit on the existing AR before we do anything else. In most cases, we find 8–14% of total revenue sitting in recoverable claims that the previous billing process either wrote off prematurely or never followed up on. That recovery pays for months of billing service — and it comes from work that was already done, patients that were already seen, money that was already earned.

Days 0–30

Claim submitted. Awaiting standard payer processing. Monitor status — most clean claims pay in this window.

Days 31–60

If unpaid, check status and identify reason. Correct and resubmit if denied. Patient statements go out for balances due.

Days 61–90

Escalate follow-up. Appeal any denied claims with documentation. Payer calls for claims showing no status update. Second patient outreach.

Days 91–120

Urgent intervention. Appeal windows approaching for many payers. Every day matters. Patient payment plan conversations begin.

Days 120+

Final appeals where windows allow. Collections decision on patient balances. Write-off analysis — and root cause review to prevent recurrence.

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 everything else — phones, prior authorizations, patient check-ins, staff scheduling. AR follow-up is the first thing that gets deprioritized when the day gets busy. And unlike a missed appointment or an unfilled prescription, nobody calls you when a claim goes unworked for 45 days. It just ages quietly.

The signal that it's time to outsource isn't a billing crisis — it's the slower, quieter signs. Collections that feel lower than they should be relative to your volume. A growing write-off percentage. Staff spending more time on billing administration than on patient care. An AR report where the 90-day bucket keeps growing. These are the early indicators that the in-house model is hitting its ceiling, and that the cost of the status quo — in unrecovered revenue — is higher than the cost of a dedicated billing partner. Similar patterns show up across high-volume specialties — orthopedic practices and cardiology groups in particular tend to have complex multi-payer AR that outgrows in-house capacity quickly.

How Medtransic Manages AR for Medical Practices

Medtransic handles the full AR cycle — from claim submission through final payment — for medical practices that want their billing running cleanly without managing it themselves. That means every claim goes out clean, every denial gets worked within the appeal window, every patient balance gets a structured follow-up, and every aging report gets reviewed by a team whose only job is making sure nothing falls through the cracks.

For new clients, we start with a retroactive AR audit before touching anything else. We go through 90 days of existing claims, identify every stalled or underpaid balance, and produce a recovery plan with specific dollar amounts. Most practices find 8–14% of recent revenue sitting in recoverable claims that slipped through their current process. That audit gives you a baseline — and it shows exactly what's been costing you before we change anything. We integrate directly with the systems you already use — Epic, AdvancedMD, eClinicalWorks — so transition is seamless and claim submission continues without interruption.

The result is a practice that knows exactly what's in its AR, why it's there, and what it's worth — instead of discovering six months later that a significant portion of last quarter's revenue quietly wrote itself off. If you're also managing complex specialty billing alongside your AR — whether that's anesthesia, pain management, or other procedural specialties — Medtransic handles those alongside your AR management as part of a unified billing operation.