What Is A/R (Accounts Receivable)?
Accounts receivable in medical billing is the total dollar amount of outstanding charges that have been billed to insurance payers and patients but not yet paid; A/R is tracked, aged, and worked by buckets (0-30, 31-60, 61-90, 91-120, 120+ days).
- Best-in-class A/R targets: less than 25% in 60+ days, less than 15% in 90+ days, and less than 10% in 120+ days.
- Work A/R by priority: largest dollar amounts in 60-90 days first (recoverable), then aged 90+ for triage between appeal, write-off, and patient transfer.
A/R (Accounts Receivable)
Also known as: Accounts Receivable; AR; Outstanding A/R
Accounts receivable in medical billing is the total dollar amount of outstanding charges that have been billed to insurance payers and patients but not yet paid; A/R is tracked, aged, and worked by buckets (0-30, 31-60, 61-90, 91-120, 120+ days).
Definition
A/R represents the practice's unpaid claims and patient balances at any point in time. It is segmented by aging bucket (days outstanding from date of service or date of billing) and by responsible party (insurance vs patient). Insurance A/R aging shows whether claims are being adjudicated and paid timely; patient A/R aging shows collection effectiveness on patient responsibility. The total A/R divided by average daily charges produces 'Days in A/R' — a topline benchmark of revenue cycle speed.
Example
A practice generating $1M/month in charges with $1.1M in total A/R has 33 Days in A/R. Drilling into aging: $700K is 0-30 days (healthy), $200K is 31-60 days (mostly normal payer cycles), $120K is 61-90 days (some payer issues), $50K is 91-120 days (denial follow-up needed), $30K is 120+ days (high write-off risk).
Common Misconceptions
Total A/R growing is not necessarily a problem — it should grow proportionally to charge volume. The signal of distress is A/R aging shifting older (more dollars in 90+ buckets relative to total) or Days in A/R increasing while charge volume is flat.
Practical Application
Best-in-class A/R targets: less than 25% in 60+ days, less than 15% in 90+ days, and less than 10% in 120+ days. Work A/R by priority: largest dollar amounts in 60-90 days first (recoverable), then aged 90+ for triage between appeal, write-off, and patient transfer.
Related Terms
Days in A/R
Days in A/R is a KPI calculated as Total Accounts Receivable divided by Average Daily Charges (typically 90-day rolling average), representing the average number of days it takes a practice to collect on a billed charge.
Read definition arrow_forwardDenial Rate
Denial Rate is the percentage of claims (or claim dollars) denied by payers on initial adjudication, calculated as Denied Claims ÷ Total Claims Adjudicated × 100, typically tracked monthly and segmented by payer and denial reason category.
Read definition arrow_forwardNet Collection Rate
Net Collection Rate is the percentage of allowed (contracted) revenue actually collected, calculated as Payments ÷ (Charges − Contractual Adjustments) over a rolling period; it measures how effectively a practice collects what it is contractually entitled to receive.
Read definition arrow_forwardAdjudication
Adjudication is the payer-side process of reviewing and determining how a claim will be paid: applying eligibility, benefits, coverage rules, contracted rates, and edits to determine the allowed amount, paid amount, patient responsibility, and any denials or adjustments.
Read definition arrow_forwardWhere This Applies on MedPrecision
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