How to read days in A/R without a finance degree

Days in accounts receivable answers a simple question: how many days of work are sitting unpaid? Take the open insurance and patient balances. Divide by what you charge on an average day. If you charge about $3,000 a day and you are owed $150,000, you are at 50 days.

A high number is not always lost money. Some of it is claims that were filed last week and are inside the payer’s processing time. Some of it is patient balances that were statemented and will pay this month. The part that matters is the tail: claims older than 90 days, and claims that have not moved since the denial.

MedFlow’s target is under 35 days. That is our target for the practices we bill. It is not a published percentile from a survey. Use it as a line, not as a grade. If you are at 60 days, the next question is which bucket: waiting on the payer, waiting on the clinic, or waiting on a statement that was never sent.

Contractual adjustments should not inflate the number. The difference between your fee and the allowed amount was never going to be paid. Leaving it in “open A/R” makes the practice look slower than it is.

On the billing health check you can type charges and days in A/R and see how much cash is sitting past 35 days. Type totals only. The form under the calculator is how you ask us to look with you.