Accounts Receivable in Medical Billing: How to Collect What You're Owed

Your accounts receivable is divided into aging buckets that tell you exactly how healthy your revenue cycle is. The 0-to-30-day bucket contains fresh claims — monitor these for payer acknowledgment (a 277CA transaction) within 48 to 72 hours of submission. If no acknowledgment arrives, the claim may not have been received. The 31-to-60-day bucket signals the need for active follow-up: call the payer, verify the claim is in process, and identify any issues before they age further. The 61-to-90-day bucket requires escalation — file appeals on denied claims, contact payer dispute departments on underpaid claims, and refile corrected claims with urgency. The 90-plus-day bucket demands aggressive recovery: exhaust every appeal level, engage the payer's provider-relations department, and prepare for external review or state insurance commissioner complaints before writing anything off. MGMA benchmarks show that a healthy practice keeps 85% or more of total A/R under 60 days. Industry-average practices sit at 70 to 75% under 60 days. If more than 20% of your A/R is over 90 days, you have a systemic problem — not a few stuck claims, but a broken follow-up process. For a practice with $200,000 in total receivables, each percentage point over 90 days represents $2,000 in at-risk revenue with less than a 30% recovery probability.

The number-one reason claims age past 60 days is insufficient follow-up. Claims do not resolve themselves. Payers do not proactively call you to report issues. Without a structured follow-up cadence, claims sit in pending status until they silently pass the timely-filing deadline — at which point the revenue is permanently lost. Here is the cadence that top-performing billing operations use: Day 14: check claim status via payer portal or 276/277 transaction. If no acknowledgment was received, investigate whether the claim was transmitted successfully. Day 30: active follow-up call to the payer. Verify the claim is in adjudication, ask for the expected payment date, and document any issues identified. Day 45: if the claim was denied, submit the corrected claim or first-level appeal within 48 hours of the denial. If the claim is still pending with no explanation, escalate to a supervisor. Day 60: escalate unresolved claims to the payer's dispute department or provider-relations team. Submit formal written documentation of the issue. Day 75: file a formal written appeal with complete supporting documentation — clinical notes, coding guidelines, and payer-policy references. Day 90: exhaust the final internal appeal level and, if the payer upholds an incorrect denial, request external review through the state's independent review process or file a complaint with the state insurance commissioner. This cadence sounds aggressive, but it is what separates practices with 28-day average A/R from those with 45-day averages.

Every stuck claim has a specific root cause, and applying the wrong fix wastes time without resolving the issue. The most common reasons claims get stuck in A/R: the claim was received but the payer needs additional information (and nobody followed up on the request — payers send info requests via 277 transactions or paper correspondence that often gets overlooked). A denial was received but nobody appealed — the denial posted to the practice management system, but without a dedicated denial-management workflow, it sat in a report that nobody reviewed. Payment was made but posted to the wrong patient account or wrong date of service, making it appear unpaid when the money is actually in the system. The primary payer paid but the secondary insurance was never billed — coordination of benefits claims require that the primary payer's EOB accompany the secondary claim, and if nobody initiates that process, the secondary payment never arrives. Patient balance was assigned after insurance payment but no statement was sent — or statements were sent to an outdated address. Each of these has a different resolution path, and the key is categorizing stuck claims by root cause before applying a fix. A weekly A/R review meeting where the team sorts aged claims into these categories and assigns specific resolution actions to specific people with deadlines transforms A/R management from reactive to systematic.

Each major payer has tendencies that affect A/R management strategy. Medicare fee-for-service is the most predictable payer — claims typically pay within 14 to 21 days with minimal follow-up needed. When Medicare claims age, it is usually a coding issue (CCI edit violation or diagnosis mismatch) rather than a processing delay. Medicare Advantage plans (operated by UHC, Humana, Aetna) behave more like commercial payers with longer processing times and higher denial rates. UnitedHealthcare commercial claims average 21 to 30 days to payment but frequently require follow-up at day 30 due to their high volume of CO-16 (missing information) and CO-97 (bundling) denials. Aetna averages 21 to 28 days for clean claims but is notorious for requesting additional documentation 30 to 45 days into the process, effectively restarting the clock. BCBS varies dramatically by state plan — some BCBS plans pay within 14 days, while others routinely take 30 to 45 days. Cigna averages 28 to 35 days and frequently underpays against contracted rates, requiring payment-variance analysis on every remittance. Medicaid managed-care plans (Molina, Centene, Anthem Medicaid) often have the longest processing times at 30 to 60 days and the most complex coordination-of-benefits requirements. Tailor your follow-up cadence to each payer's typical payment timeline rather than applying a one-size-fits-all approach.

Not every old claim is worth pursuing, and knowing when to stop fighting is as important as knowing when to escalate. Write off when: the timely-filing deadline has expired and you have no proof of original submission within the deadline (no clearinghouse timestamp, no 277CA acknowledgment), the payer has gone through all internal appeal levels and upheld the denial on clinical merit (not administrative technicality), the patient balance is under $25 and the cost of continued collection efforts exceeds the amount, or the service was legitimately not covered under the patient's plan and there is no secondary payer. Fight when: the denial reason code is incorrect or disputable (the payer applied the wrong edit rule, bundled codes that CCI edits do not bundle, or denied for auth when auth was obtained), the payer underpaid against your contracted rates (payment-variance analysis reveals the allowed amount is below the contracted fee schedule), the timely-filing deadline has not passed and the claim can be corrected and resubmitted, there is a secondary payer that has not been billed and still has timely-filing eligibility, or the denial is based on medical necessity and you have clinical documentation and practice guidelines that support the service. A general rule: any claim over $100 with a disputable denial should be appealed. The $25 to $30 appeal cost is justified on any claim with a reasonable chance of overturn.

Track these five A/R-specific KPIs monthly to maintain visibility into your receivables health. Days in A/R: total A/R balance divided by average daily charges over the past 90 days. Benchmark: under 30 days. Industry average: 35 to 45 days. Every day above 30 represents delayed cash flow and increased write-off risk. A/R over 90 days percentage: the dollar amount in the 90-plus-day bucket divided by total A/R. Benchmark: under 10%. Above 15% signals a broken follow-up process. A/R over 120 days percentage: the dollar amount in the 120-plus-day bucket divided by total A/R. Benchmark: under 5%. Claims in this bucket have less than a 25% recovery probability. Collection rate on aged claims: total payments recovered from the 60-plus-day bucket divided by total A/R that entered the 60-plus-day bucket. This measures how effective your follow-up and appeal processes are. Benchmark: 65% or higher. Write-off rate: total write-offs divided by total charges. Benchmark: under 4%. Above 6% means you are writing off revenue that could have been recovered with better processes. Go Medical Billing reports all five A/R KPIs to every client monthly, with trend analysis showing improvement over time.

Our A/R management process is built on the structured follow-up cadence described above, applied to every claim for every client without exception. We do not batch follow-up into monthly reviews — our A/R team works claims daily, with automated alerts that flag claims approaching key aging thresholds. For new clients, we conduct a one-time A/R cleanup assessment that identifies all claims currently in the 60-plus-day bucket, categorizes them by root cause, and initiates recovery actions on every claim that still has appeal rights or resubmission eligibility. Most new clients recover $5,000 to $25,000 in previously stuck revenue during this initial cleanup. Ongoing, our A/R specialists work payer-prioritized worklists — highest-value claims first, organized by payer to batch similar issues and leverage payer-specific knowledge. We track every payer's contracted rates and run automated payment-variance detection on every remittance, catching underpayments that most practices never identify. Our average days in A/R across all clients is 26 days, compared to the industry average of 38 days. That 12-day difference represents significantly faster cash flow and substantially lower write-off rates for our clients.