How Do You Recover Aged Accounts Receivable?
Triage by aging bucket and dollar amount. 91-120 day bucket: prioritize by dollar amount and timely-filing risk; appeal correctable denials, escalate stuck claims to payer reps. Over 120 days: focus only on high-dollar claims with documented appealable denial reasons; write off small balances and undocumented claims. Average recovery on 91-120 day aged A/R is 35-50%; over 120 days drops below 30%. A working aged-A/R recovery operation systematically attacks the 91-120 bucket weekly to prevent slippage to the 120+ bucket where collection probability collapses.
- 0-30 days: 95-98% collection probability (MGMA)
- 61-90 days: 60-70% collection probability
- 91-120 days: 35-50% — the action zone
- Over 120 days: below 30% — write off small, work high-dollar
How to Recover Aged A/R: A Practical Recovery Workflow
By MedPrecision Operations Team · Published
MGMA and HFMA data consistently show the collection probability curve: claims aged 0-30 days collect at 95-98%; 31-60 days at 80-85%; 61-90 days at 60-70%; 91-120 days drops to 35-50%; over 120 days falls below 30%. Most practices with weak A/R follow-up have 25-40% of total A/R sitting in the 90+ day bucket — meaning a meaningful portion of that money is unlikely to be collected unless triaged aggressively. Aged A/R recovery is half technical (timely-filing limits, payer escalation, appeal documentation) and half operational (prioritization workflow, accountability, escalation paths). This guide is the practical recovery playbook: how to triage by collection probability and dollar amount, when to escalate payer-by-payer, how to handle timely-filing risk, and what KPIs prove the workflow is working.
Understanding the Impact of Aged A/R
Claims aged beyond 90 days have a collection probability that drops below 50%, and those over 120 days may only be collected 30% of the time. For many practices, aged A/R represents tens or hundreds of thousands of dollars in trapped revenue. High days-in-A/R also indicates systemic billing problems that need to be addressed to prevent future revenue loss.
Prioritizing A/R Recovery Efforts
Not all aged claims deserve equal attention. Prioritize recovery efforts by focusing on high-dollar claims first, claims approaching timely filing deadlines, payers with known slow payment patterns, and claims where the denial reason is correctable. This targeted approach maximizes the return on your recovery investment.
Effective Follow-Up Strategies
Successful A/R recovery requires systematic follow-up including contacting payers by phone and portal for status updates, resubmitting claims with corrected information, filing appeals with supporting documentation, escalating to payer representatives when standard channels fail, and documenting every contact for future reference. Consistent, documented follow-up is the key to recovering aged balances.
Preventing Future A/R Aging
The best approach to aged A/R is preventing it in the first place. This means submitting clean claims within 24-48 hours of service, working denials within 48 hours of receipt, following up on unpaid claims at 30-day intervals, and monitoring days-in-A/R as a key performance metric. Practices that maintain these disciplines typically keep days-in-A/R below 35.
The Collection Probability Curve
MGMA and HFMA data consistently produce the same aging-vs-collection-probability curve: - **0-30 days:** 95-98% probability of collection. Most claims pay or post within this window. - **31-60 days:** 80-85% probability. Claims that did not pay in the first 30 days have entered payer review or denial cycles. - **61-90 days:** 60-70% probability. The mid-aging zone. Most denials and underpayments are surfacing. - **91-120 days:** 35-50% probability. The action zone — what gets aggressively worked here determines a lot of the practice's net collection rate. - **Over 120 days:** 25-30% probability and falling. Many claims have hit timely-filing limits or entered states where appeal options are closed. - **Over 180 days:** 15-20% probability. Recovery is mostly hopeful exception work. - **Over 365 days:** Below 10%. Most are write-offs. **The implication:** the dollars at risk are concentrated in the 91-120 day bucket. A practice that systematically prevents claims from sliding from 60-90 days into 91-120 days will collect significantly more than a practice that tries to recover claims after they hit 120+ days. Prevention beats recovery. **KPI target:** Total A/R aging over 90 days should be <18-22% of total A/R for a healthy practice. Above 30% indicates systemic A/R management gaps. Above 40% means revenue is being lost continuously.
Triage and Prioritization for Aged A/R
Effective aged-A/R recovery is a triage problem. Not all aged claims deserve equal effort. **Triage matrix (work top-down):** **Tier 1 — High dollar, correctable denial.** Single claim over $300-$500 with a clear correctable denial reason (missing modifier, wrong DOB, NCCI bundling that can be appealed with documentation). Highest ROI per minute of staff time. Work first. **Tier 2 — High dollar, payer-stuck.** Claim over $300 sitting in payer review without a denial code — needs payer phone follow-up or escalation to a payer representative. Time-consuming but often recoverable. **Tier 3 — Approaching timely filing.** Any claim within 30 days of payer's timely-filing limit (varies by payer; Medicare = 12 months, many commercial = 90-180 days). Triage by deadline ascending; correct or appeal before clock runs out. **Tier 4 — Patient responsibility aged claims.** Patient balance over 60 days requires statement cycle escalation: 1st statement, 2nd statement, phone call, payment plan offer, write-off or third-party collections referral. **Tier 5 — Low dollar, no denial code.** Claims under $50-$100 with unclear status. Calculate cost-to-collect — at $30-$50 per call attempt and 30-40% recovery probability, sub-$50 claims often cost more to collect than they yield. Bundle write-offs with documentation. **The mistake practices make:** working aged A/R chronologically (oldest first) instead of by ROI. Oldest is usually lowest probability of recovery; high-dollar correctable denials in the 91-120 bucket are where the dollars actually are.
Common Questions
Common questions about how to recover aged a/r.
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Get a Free Billing Audit arrow_forwardWhat is a healthy days-in-A/R for a medical practice?
Best-performing practices maintain days-in-A/R between 25-35 days. If your practice exceeds 45 days, there are likely systemic issues in your billing workflow that need to be addressed.
Is it worth pursuing very old claims?
It depends on the dollar amount and payer timely filing limits. MedPrecision evaluates each aged claim's recovery potential and focuses efforts where the return justifies the investment, while also addressing root causes to prevent future aging.
How does MedPrecision help recover aged A/R?
We conduct a thorough A/R analysis, prioritize claims by recovery potential, and deploy experienced follow-up specialists who work systematically through your aged balances. We also implement process changes to prevent future A/R accumulation.
Can MedPrecision help with patient A/R as well?
Yes, we manage both insurance and patient A/R including statement generation, payment plan setup, and patient communication to improve collection of patient responsibility balances.
What is a healthy days-in-A/R for a medical practice?
MGMA benchmarks place best-performing practices at 25-35 days in A/R, with the median around 40-45 days for outpatient practices. Above 50 days indicates systemic billing workflow issues. Days-in-A/R is calculated as total A/R divided by average daily charges (typically using a 90-day rolling average). The metric is a summary indicator — high days-in-A/R can be caused by slow front-end work (charge lag), high denial rates (claims sitting in denial), weak payer follow-up (claims aging past 60-90 days), or large patient balances (aged self-pay A/R). Each cause has a different fix. Practices working to reduce days-in-A/R should track the metric monthly with year-over-year comparison and break it down by payer to see where the time is accumulating. Each 10-day reduction in days-in-A/R is worth roughly 2.7% of annual collections in working capital improvement.
Is it worth pursuing claims over 120 days old?
Selectively yes, but the math shifts. Collection probability on claims over 120 days is below 30%, and over 180 days drops below 20%. The work is primarily on (1) high-dollar claims with documented appealable denial reasons, (2) claims that have not yet hit timely-filing limits and where payer escalation can re-open the queue, and (3) Medicare/Medicaid claims with longer filing windows where appeals remain viable. Below $100-$150 per claim, the staff time to work an aged claim often exceeds the expected recovery — bundle these for write-off rather than burning labor on low-probability collection. Best practices for the over-120 bucket: run a quarterly review with a write-off list of small-dollar untouchable claims, and a focused work list of high-dollar claims with documented appeal paths. The biggest mistake is leaving aged claims untouched indefinitely — they waste reporting accuracy and consume system overhead even when no work is being done.
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