What Is a Good Days in A/R for a Medical Practice?

What it measures

Days in accounts receivable estimates how long, on average, it takes you to get paid. The standard calculation is total A/R divided by average daily charges, where average daily charges are gross charges over a period divided by the number of days in it. Ninety days is the usual window, long enough to smooth out a slow week, short enough to still be current.

It is a speed measurement, not a quality one. It tells you how fast money arrives, not how much of it you are leaving behind.

The benchmarks worth quoting

Commonly cited targets put a well-run practice under roughly 35 days, with strong performers below 30. More useful is the share of A/R sitting over 90 days, where under about 15 to 20% is the figure usually given as healthy.

Treat all of these as orientation, not as a grade. A surgical practice with heavy prior-authorisation requirements and a practice billing routine office visits are not playing the same game. The comparison that actually means something is your own trend over time, and your own split by payer.

Why the headline number lies

Days in A/R is an average, and averages hide exactly the thing you need to see. Two practices can both report 38 days while being in completely different situations.

The first collects almost everything in under 30 days and has a small, old, genuinely stuck balance. The second collects most things slowly, at around 45 to 60 days, with nothing truly ancient. Same average. Entirely different problems: the first has a handful of hard claims to resolve, the second has a systemic follow-up delay affecting everything.

Large write-offs make this worse. Writing off aged balances removes them from A/R and improves days in A/R immediately, without a single extra dollar being collected. If the number improved sharply in one month, check what was written off before celebrating.

Read the buckets instead

Both of these report roughly 38 days in A/R. One has a handful of hard claims to resolve; the other has a systemic follow-up delay affecting everything. The average cannot tell them apart.

Split A/R into 0–30, 31–60, 61–90, 91–120 and over 120, then split it again by payer and by provider. The pattern tells you what is wrong:

Heavy in 0–30 and falling away quickly is healthy.
A fat 91+ bucket with everything else normal means follow-up stopped on hard claims. This is a work-allocation problem.
One payer much older than the rest points to a contract, enrollment or credentialing issue rather than a billing one.
One provider much older than the rest means you should check their credentialing effective dates first. Out-of-network denials often look like slow payment.
Everything shifting right together is a submission or staffing problem that started on a date you can usually identify.

Pair it with a second number

Days in A/R on its own can be gamed. Read it alongside net collection rate, which measures how much of what you were entitled to collect you actually collected, after contractual adjustments. Fast but incomplete collection is still a loss. Together, the two describe both the speed and the completeness of your revenue cycle.

Getting your own numbers

Our free A/R audit produces exactly this breakdown from ninety days of your claims data: aging by bucket, by payer and by provider, with the recoverable balances separated from the genuinely closed ones. No charge, and the findings are yours either way.

What is a good days in A/R?