Days in AR: what the number hides and how to move it

One average, several very different practices

Days in accounts receivable is the most quoted number in revenue cycle and the least diagnostic. Two practices can sit at the same figure with completely different problems: one with everything moving slowly and evenly, one with most claims paid promptly and a tail of old accounts dragging the mean.

The second is far more common and much more recoverable, and the average is exactly the statistic that hides it.

Cut one: the ageing buckets, as a percentage

The percentage of your accounts receivable over 90 days tells you more in one figure than the average does. A practice with a healthy average and a fat over-90 bucket has a follow-up problem, not a submission problem, and hiring for faster charge entry will not touch it.

Cut two: by payer

Split the same report by payer before deciding anybody is slow. One plan with a longer cycle, a portal nobody has logged into, or an enrolment that lapsed can move the whole average on its own. Medicaid in particular is worth pulling out — its submission path, filing window and appeal route differ from commercial, and mixing it into one worklist is how the deadlines get missed.

Cut three: by reason, not by age

Age tells you how long something has been stuck. It does not tell you why, and the why determines who can fix it. Sort the over-90 pile by denial reason and the work usually resolves into three or four repeating categories, most of which have a systemic fix rather than an account-by-account one.

Why the number moves slowly even when the work is right

Denied claims go through an average of three rounds of insurer review, each taking 45 to 60 days, according to Premier's national survey. A practice that starts working its denials properly today will not see the average move for a quarter, because the accounts being worked now have months of elapsed time already baked in.

That lag is worth stating out loud before starting, because it is where clean-up efforts usually get abandoned — three or four weeks in, with real work being done and no visible movement in the headline figure.

The leading indicator to watch instead

Track touches that reached a closing outcome, not touches. A call that ends with a reference number and a date to check back is progress; a call that ends with "it is in process" is not, and a queue full of the second kind will look busy for months without collecting anything.