Guides Fixing lost revenue
How to read an AR aging report, and what healthy looks like
The short answer
An AR aging report sorts what you are still owed by how long it has been outstanding, usually in 30-day buckets. Watch the share over 90 days and your days in AR, split by payer and by patient, and judge them against your own 12-month baseline.
An AR aging report lists every unpaid balance and sorts it by how long it has been open, usually in buckets of 0–30, 31–60, 61–90, 91–120 and over 120 days. Read it in three passes: how much sits in the older buckets, which payers and patients it belongs to, and whether those numbers are getting better or worse month to month. There is no free official benchmark for “healthy”. The most useful comparison is your own last 12 months.
What the report shows
Most practice management systems produce an aging report with the same core columns:
- Payer or financial class: the insurer, or “patient” for self-pay balances.
- Buckets: the open balance in each age range.
- Total: the sum across buckets.
- Claim or account detail: a drill-down to each claim, with date of service, billed date and balance.
Before you read the numbers, check one setting: what the report ages from. HFMA, whose MAP Keys are the standard revenue cycle definitions, ages physician AR from the date of service (HFMA MAP Keys, 2023 edition). Some systems age from the date the claim was billed, and some from the last time it was billed. A report that ages from the last bill date resets the clock every time a claim is resent, so a two-year-old claim can look 20 days old. If you can choose, age from date of service.
The buckets, one at a time
| Bucket | What it usually holds | What to do |
|---|---|---|
| 0–30 days | Claims in normal processing | Make sure each one was accepted by the payer, not just sent |
| 31–60 days | Claims past the payer’s normal payment time, or waiting for information | Check claim status; answer any information requests |
| 61–90 days | Claims with a problem nobody has fixed yet | Find the denial or rejection behind each one and work it |
| 91–120 days | Claims at risk of missing appeal or filing windows | Check each payer’s deadlines; escalate |
| Over 120 days | Old AR: some recoverable, some not | Triage by deadline and dollars (see old AR) |
New York’s prompt pay law gives a reason to look at the 31–60 bucket closely. Insurers and HMOs regulated by New York must pay clean claims within 30 days of receipt when they are sent electronically, and within 45 days when sent on paper or by fax. When a claim is disputed or incomplete, they must pay any undisputed part and send a written notice within 30 days that denies the claim, gives the reasons or asks for the information they need (NY Insurance Law §3224-a(a) and (b), as of November 2026). An electronic claim to a New York-regulated plan that is past 30 days with no payment and no request for information deserves a status check. Self-funded employer plans and Medicare follow other rules.
Days in AR: two formulas, both in use
Days in AR estimates how many days of revenue are sitting unpaid. There are two common versions, and they give different answers, so pick one and keep it.
Net version (HFMA). HFMA’s MAP Key for net days in AR divides net AR by average daily net patient service revenue, using the most recent three months (HFMA MAP Keys). Net AR is what you actually expect to collect, after contractual adjustments, credit balances and expected bad debt. Net revenue is charges minus contractual adjustments and those other deductions. HFMA counts the actual calendar days in the three months: for a quarter ending June 30, that is 91 days.
Gross version. Many practice systems divide total AR at full charges by average daily gross charges, sometimes over the last 3 months and sometimes over 12. It is easier to run, because it doesn’t need expected payments, but it moves whenever your fee schedule changes.
Worked example
Example only: invented numbers for a practice at the end of October.
| Input | Amount |
|---|---|
| Gross charges, August to October | $900,000 |
| Days in August to October | 92 |
| Total AR at full charges | $410,000 |
| Net revenue (charges minus contractual adjustments), August to October | $540,000 |
| Net AR (expected to collect) | $240,000 |
- Gross days in AR: $900,000 ÷ 92 = $9,783 a day. $410,000 ÷ $9,783 = 41.9 days.
- Net days in AR: $540,000 ÷ 92 = $5,870 a day. $240,000 ÷ $5,870 = 40.9 days.
Here they land close together, but they don’t have to. If this practice raised its charges 20% in October, gross days in AR would shift while net days in AR would barely move. That is why the net version is better for tracking over time, if your system can produce expected payments.
Aged AR as a share of the total
The second number to watch is the share of AR in the older buckets. HFMA defines it as the billed AR in each bucket divided by total billed AR, with credit balances and unbilled accounts left out (HFMA MAP Keys, AR-1).
Example only:
| Bucket | Insurance AR | Share |
|---|---|---|
| 0–30 | $150,000 | 45% |
| 31–60 | $70,000 | 21% |
| 61–90 | $40,000 | 12% |
| 91–120 | $25,000 | 8% |
| Over 120 | $45,000 | 14% |
| Total | $330,000 | 100% |
In this example, about 21% of insurance AR is over 90 days ($70,000 of $330,000). Whether that is good or bad depends on what it was last quarter, and which payers it belongs to.
Why there is no benchmark here
You will see ranges quoted online for “good” days in AR and “good” AR over 90 days. We could not find a free primary source for any of them. HFMA defines these metrics carefully but does not publish a public target. A number that circulates without a source is not a benchmark.
The ranges also vary for real reasons:
- Payer mix. Plans pay at different speeds, so two practices with the same process can show different days in AR.
- Patient share. Practices with many high-deductible patients carry more patient AR, which ages more slowly.
- Specialty. Services that need authorizations, records or attachments take longer to pay.
- Report settings. Aging from date of service versus bill date, and gross versus net, change the result.
How to set your own baseline
- Run your aging report as of the last day of each of the past 12 months. If your system can’t run it for past dates, start this month and build forward.
- For each month, record days in AR (one formula, always the same one) and the share of AR over 90 days.
- Split both by your top five payers and by patient versus insurance.
- Your baseline is the 12-month median. Your target is to beat it, payer by payer.
- Look at the trend: a rising share over 90 days at one payer is a signal even if the total looks fine.
Insurance AR and patient AR are different problems
Read them separately. Insurance AR ages because of claims problems: rejections, denials, missing information, missing authorizations. The fix is claim work. Patient AR ages because of statements, payment plans and collection policy. The fix is front-desk collection and clear statements. A single blended number hides which one is growing.
Watch for credit balances too. They show up as negative amounts and quietly reduce your total AR. HFMA tracks them as a separate key and links them to problems such as late cash posting (HFMA MAP Keys). Pull them into their own list. Some will be overpayments you may need to refund, so ask your billing team or advisor how your payer contracts and New York rules treat them.
Five things to do this week
- Check the aging basis. Confirm the report ages from date of service, not last bill date.
- Sort the over-90 buckets by payer. One or two payers usually hold most of it. Call those first.
- Check filing deadlines on everything in 61–120. A claim that was never accepted by the payer may be close to its limit.
- Separate credit balances. Make a list and decide who reviews it.
- Write down this month’s numbers. Days in AR, share over 90 days, insurance versus patient. That is the first row of your baseline.
What to do with the 90+ bucket
The over-90 bucket needs triage, not just calls: which claims are still inside filing and appeal limits, and which are worth the time. That is its own process, covered in old AR: which unpaid claims are still worth chasing.
Marlow’s free billing audit asks for exactly this report, alongside your 835s, and shows what is over 90 days and what is near a filing deadline.
Sources
General information, not advice on a specific claim, contract or legal question. Rules and rates change; check the linked sources for the current version.