What Is Days in A/R?
Days in A/R is total accounts receivable divided by average daily charges over a chosen period — this page uses a 90-day rolling window — and represents the average number of days it takes a practice to collect on a billed charge.
- Set your internal target from your own payer mix and your own trend rather than from a specialty table — no free source publishes specialty-level days-in-A/R distributions for physician practices.
- Track monthly on a stated window, keep that window fixed so the series stays comparable, and investigate any month-over-month move of five days or more alongside the aging buckets.
Days in A/R
Also known as: DAR; Days Sales Outstanding (DSO); AR Days
Days in A/R is total accounts receivable divided by average daily charges over a chosen period — this page uses a 90-day rolling window — and represents 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 a chosen period ÷ days in that period). The 90-day rolling charge average used here is a methodology choice, not a standard: a shorter window tracks recent change faster, a longer one smooths seasonality further, and two practices using different windows are not comparable. State the window, and state whether the numerator is gross A/R — billed charges still outstanding — or net A/R, those balances after contractual allowances and expected adjustments, because the two produce materially different numbers on the same book of business. No free primary source publishes observed percentile distributions of days in A/R for physician practices; MGMA’s medians sit inside licensed DataDive products and are not public. The one freely published target is the AAFP’s: days in A/R should stay below 50 days at minimum; however, 30 to 40 days is preferable. That is practice-management guidance with no published population, sample or data year behind it, and it should be quoted with that limitation attached. Days in A/R also does not distinguish recoverable from uncollectible A/R, so it has to be read next to an aging-bucket breakdown.
Example
Worked example, illustrative figures only. A practice with $1.2M in total A/R and $35,000 a day in average charges over its chosen window has 34.3 days in A/R ($1.2M ÷ $35,000). If that figure moves from 34 to 48 over three months while charge volume is flat, the arithmetic is telling you A/R grew while charges did not — the usual candidates are slower payer cycles, a denial or appeal backlog, or charge-entry lag pushing submission later in the cycle. The number identifies the direction; the aging buckets and the denial log identify the cause.
Common Misconceptions
Days in A/R can be lowered without collecting a dollar more — by writing off aged A/R aggressively, or by holding back charge entry so the denominator inflates. Both look like improvement in the series and neither improves cash. Cross-check any improvement against the collection rate and against the aging buckets before reporting it, and keep the calculation window fixed, because changing the window changes the number on its own.
Practical Application
Set your internal target from your own payer mix and your own trend rather than from a specialty table — no free source publishes specialty-level days-in-A/R distributions for physician practices. The AAFP publishes the one freely available guidance range, that days in A/R should stay below 50 days at minimum; however, 30 to 40 days is preferable, with no population or sample behind it; treat it as a floor to clear rather than a measured median. Track monthly on a stated window, keep that window fixed so the series stays comparable, and investigate any month-over-month move of five days or more alongside the aging buckets.
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 definitionDenial 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. Claims rejected before adjudication sit in neither the numerator nor the denominator — a rejection is not a denial.
Read definitionNet 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 definitionFirst-Pass Resolution Rate
First-Pass Resolution Rate is the percentage of claims paid on first submission — no rejection, no denial, no corrected claim and no appeal — measured against every claim submitted in the period. Its complement is rejections plus denials, not denials alone.
Read definitionWhere This Applies on MedPrecision
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