Days in Accounts Receivable (AR) represents the average number of days it takes for a medical practice to collect payment from payers and patients after a service is rendered. Maintaining low Days in AR accelerates cash flow and minimizes bad debt write-offs.
The Exact Formula
Days in AR = Total Accounts Receivable ÷ Average Daily Gross Charges
Average Daily Gross Charges = Total Charges over past 90 days ÷ 90 days
AR Aging Bucket Targets
Your overall AR balance should be distributed cleanly across aging buckets:
- 0 – 30 Days: 65% to 75% of total AR
- 31 – 60 Days: 15% to 20% of total AR
- 61 – 90 Days: 5% to 10% of total AR
- 91 – 120+ Days: Under 5% of total AR
MediPlus Billing clients average 24 Days in AR, well below the national industry benchmark of 45 days.
Written by Sarah Kim, RHIA
Senior RCM Consultant & Certified Health Information Administrator
Dedicated healthcare revenue cycle specialist providing industry insights to help medical practices optimize compliance, reduce denials, and maximize collections.
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