Medicare Compliance & Reimbursement

Calculate your days in Accounts Receivable with this how-to guide.

When your practice revenue is impacted by a spike in unpaid claims, it’s time to reevaluate your Accounts Receivable (A/R). The first step is to understand how to calculate your “days in A/R.” Check out these FAQs to understand exactly what you need to know about A/R:

• What are days in A/R? This term refers to the number of days that a claim goes unpaid before the payment for the service is collected.
• Why the number of days in A/R matter. There are two reasons why the number of days in A/R matters. First, if you see a rise in the number of days a claim remains in A/R, then you know that co-pays, deductibles, and the like are not being secured upfront. Secondly, assessing your days in A/R allows you to benchmark your A/R trends with that of your peers — you can see where you stand and what you need to improve on.
• How do you calculate days in A/R? The easiest way to find your days in A/R is to divide your total A/R by your Average Daily Charges (ADC).
• What’s a good number of days in A/R? It depends on many factors, including your payer mix and your type of specialty, say experts. A surgical practice can expect to have more days in A/R than a primary care practice because the individual charges are bigger and surgeons often don’t bill until the patient is discharged.

Equal parts. Keeping your days in A/R on the low end requires multiple layers of staff coordination and a detailed revenue cycle management plan.