How to Read Your Practice’s AR Aging Report
The AR aging report is one of the most useful documents in your practice’s financial life. Most billing systems generate one automatically, but a lot of practice owners don’t know how to interpret it. Here’s a plain walkthrough.
What is an AR aging report?
AR stands for accounts receivable, which is the money owed to your practice for services already delivered. The aging report shows you how long that money has been outstanding.
It groups unpaid balances into time buckets, typically: 0 to 30 days, 31 to 60 days, 61 to 90 days, and over 90 days. Some reports also break these out by payer and by patient.
Reading the columns
The report will show each outstanding claim or balance, how much is owed, and how many days it has been outstanding since the date of service or claim submission.
What you’re looking for is the distribution across age buckets.
A healthy practice has the majority of its AR in the 0 to 30 day column. That means most of its outstanding money is recent and actively being processed by payers.
As balances move into 60 and 90 day columns, that’s a warning sign. Payers generally pay clean claims within 14 to 30 days. Anything sitting beyond 45 days without resolution means something went wrong: a denial, a payer hold, a missing document, or nobody following up.
The 90-plus column is the most important
Balances over 90 days old are in trouble. Most commercial payers have timely filing rules that prevent you from resubmitting or appealing a claim after a certain period, often 90 to 180 days from the date of service. Once that window closes, the money is gone.
If your 90-plus column has a lot in it, you have a collections problem that needs immediate attention.
What’s a healthy AR days number?
The industry benchmark is 30 to 40 days in AR. This is a single number that represents the average number of days it takes your practice to collect on a billed service.
Over 50 days means your billing process has gaps. Over 60 days is a significant problem. Over 90 days is a crisis.
What causes high AR days?
The most common causes are:
- Claims submitted with errors that get rejected before they’re even processed
- Denied claims that nobody appeals
- Payer-specific requirements being missed
- Not enough staff to follow up on outstanding balances
- Billing staff turnover leaving AR unworked
What to do with this information
If you’re reviewing your AR aging report and seeing a lot in the 60 and 90-plus columns, that’s recoverable revenue. A billing audit can identify which claims are still within appeal or resubmission windows and estimate how much is collectible.
FluxCura’s free AR audit reviews your aging report and tells you how much is still recoverable. Request your free audit.
