Accounts Receivable Management for Medical Practices: A Practical Guide

Accounts receivable is the money you have earned but not yet collected. In a medical practice it is mostly unpaid insurance claims and patient balances. It is also the part of the revenue cycle where money quietly disappears: not through dramatic losses, but through claims that age, miss their filing limits and eventually get written off.

Good A/R management is not complicated. It comes down to knowing what is outstanding, owning every claim and following up on a schedule. This guide lays out how.

What counts as A/R

A/R includes claims you have submitted that have not been paid or finalized, claims that were partly paid, denied claims you are still working, and balances you have billed to patients. Some practices also include unbilled charges, which is useful because it shows revenue stuck before the claim even leaves.

How to read an aging report

An aging report groups outstanding balances by how long they have been open, usually in buckets: 0 to 30 days, 31 to 60, 61 to 90, 91 to 120 and over 120. The aging date is normally counted from the date of service or the date of billing, so check which your system uses before comparing numbers with anyone else’s.

Look at it in two ways. By age, it shows how much is old. By payer, it shows who is slow. A practice with ten percent of its A/R over 90 days is in a very different position depending on whether that balance sits with one payer or is spread evenly. The first is a payer problem you can call about. The second is a process problem you need to fix internally.

Bucket	What it usually means	What to do
0 to 30 days	Claims in normal processing	Check that claims were accepted by the payer. Do not chase yet
31 to 60 days	Slower than expected	Check claim status. Follow up on anything not yet adjudicated
61 to 90 days	Likely a problem	Call the payer, resubmit or correct. Escalate if needed
91 to 120 days	At risk	Work the highest balances first and check filing and appeal limits
Over 120 days	Danger zone	Appeal where deadlines allow. Write off only deliberately, with a documented reason

Days in A/R, and what it can and cannot tell you

Days in A/R is total accounts receivable divided by average daily charges. It estimates how many days of revenue are tied up unpaid. A lower number means cash is arriving faster, but the number alone does not say whether that is good for your practice. It depends on your specialty, payer mix and how quickly you bill.

What matters is the direction and the split. If it rises over several months, find out which payer or which bucket is driving it. HFMA’s MAP Keys provide standard definitions for this and related measures, which helps if you want to compare internally over time or with outside benchmarks.

A follow-up routine that works

1. Daily: confirm that claims submitted yesterday were accepted. Fix rejections the same day.
2. Weekly: pull claims older than 30 days with no payment or denial, and check status through the payer portal or by phone.
3. Every two weeks: work the 61 to 90-day bucket. Each claim needs a next step and a date.
4. Monthly: review the full aging by payer, trend days in A/R and decide which payer or reason to tackle.

Document every contact: date, who you spoke to, reference number and the promised next step. It is what lets someone else pick up the claim, and it is your evidence if a payer disputes timely filing.

Know the deadlines

• Timely filing. Medicare Part B requires claims to be filed within one calendar year of the date of service. Commercial contracts and Medicaid programs have their own limits, some much shorter.
• Corrected claims and appeals. These carry their own deadlines. Original Medicare, for example, generally allows 120 days from receipt of the initial determination to request a redetermination.
• Proof of timely filing. Keep the clearinghouse acceptance report. It is the best evidence that you filed on time.

Common reasons claims stall

• Claims accepted by the clearinghouse but never received by the payer.
• A claim waiting on a missing document that nobody asked for.
• Wrong or outdated insurance on file, so the claim is with the wrong payer.
• Denials that nobody worked because the remittance was posted but not reviewed.
• Secondary claims that never went out because the primary payment was posted without triggering them.
• Patient balances that were never billed because of a posting error.

Most of these are visible in a weekly status check. The remedy is ownership: one person for each payer, or each bucket, with a list and a date.

Patient balances

Patient responsibility is harder to collect the longer it waits. Send statements promptly, make paying easy, and follow up on a consistent schedule: statement, reminder, phone call, then a payment plan offer before any referral to collections. Keep the tone polite and the language plain. Patients usually pay when they understand the bill and have an easy way to do it.

Also reconcile credit balances. Overpayments from payers or patients have to be refunded, and Medicare’s rules generally require identified overpayments to be reported and returned within 60 days.

Cleaning up an old backlog

1. Export every open claim with date of service, payer, billed amount and status.
2. Remove anything already paid, adjusted or duplicated.
3. Sort by filing and appeal deadline, then by value.
4. Work the claims with live deadlines first. Appeal or correct where there is a case.
5. Write off what is truly uncollectible, on purpose and with a reason code, so your reports reflect reality.

It is often worth doing as a defined project. Our A/R follow-up service handles backlogs and ongoing follow-up, and ties in with denial management so that denials do not become aged A/R. For the bigger picture, see our guide to revenue cycle management.

Secondary claims and crossovers

A surprising amount of A/R is not unpaid at all. It is a secondary claim that never went out. When a primary payer pays and a secondary plan exists, the claim has to be sent on, either automatically as a crossover from the primary payer or by you with the primary remittance attached. If posting does not trigger that step, the balance sits in the primary payer’s column looking resolved.

Run a monthly report of claims with a primary payment, a remaining balance and a secondary payer on file. Anything on that list without a secondary claim is money you can probably still collect, as long as the secondary payer’s filing limit has not passed.