What Is 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.
- Target Days in A/R under 35 for primary care/family practice, under 40 for surgical specialties, under 45 for behavioral health/PT (which carry more Medicaid mix).
- Track monthly with 90-day rolling charges.
- Investigate any 5+ day month-over-month increase.
Days in A/R
Also known as: DAR; Days Sales Outstanding (DSO); AR Days
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.
Definition
Days in A/R = Total A/R ÷ (Total Charges over rolling period ÷ Days in period). The standard methodology uses a 90-day rolling charge average to smooth seasonality. MGMA benchmarks place the 25th percentile (best performers) at under 30 days, the median at 35-45 days, and the 75th percentile at 50+ days, varying by specialty. Procedural specialties with higher commercial-payer mix tend to have lower Days in A/R; specialties with heavy Medicaid or workers' comp populations tend higher due to slower payer cycles. Days in A/R does not distinguish recoverable vs uncollectible A/R — it must be paired with aging bucket analysis.
Example
A practice with $1.2M in total A/R and $35,000/day in average charges has 34.3 Days in A/R. If Days in A/R rises from 34 to 48 over three months while charge volume is stable, the cause is usually slower payer cycles, denial backlog, or charge-entry lag pushing claim submission later in the cycle.
Common Misconceptions
Days in A/R can be artificially lowered by aggressive write-offs of old A/R or by holding back charge entry — both create the appearance of improvement without actual cash flow gain. Always cross-check Days in A/R against Net Collection Rate to detect this.
Practical Application
Target Days in A/R under 35 for primary care/family practice, under 40 for surgical specialties, under 45 for behavioral health/PT (which carry more Medicaid mix). Track monthly with 90-day rolling charges. Investigate any 5+ day month-over-month increase.
Related Terms
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).
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_forwardFirst-Pass Resolution Rate
First-Pass Resolution Rate is the percentage of claims paid in full (or adjudicated to final status) on the first submission without rejection, denial, or rebill — a topline measure of revenue cycle efficiency and front-end accuracy.
Read definition arrow_forwardWhere This Applies on MedPrecision
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