What percentage of AR over 90 days is normal?

What does the percentage of AR over 90 days measure?

The percentage of AR over 90 days is the share of your outstanding receivables that has been unpaid for more than 90 days from the date of service. It is the clearest early warning in the revenue cycle, because a claim that is still open at 90 days is usually stuck: denied and not reworked, sitting on a payer’s desk, or waiting on a patient who has stopped reading statements.

Days in AR tells you how fast money comes in on average. The share past 90 days tells you how much is getting left behind. A practice can post a respectable days in AR figure while a pile of aged claims grows underneath it, which is why both belong on the same monthly report.

How do you calculate AR over 90 days?

Add every open balance with a date of service more than 90 days ago, divide by total open AR, and multiply by 100. If $40,500 of a $150,000 AR is past 90 days, the result is 27%.

1. Run the AR aging report by date of service, not by last activity or last bill date.
2. Add the 91 to 120 day and over 120 day buckets together.
3. Divide by total AR, then run it again by payer class: Medicare, Medicaid, commercial and patient.
4. Record the figure on the same day each month so the trend is comparable.

Should you use billed AR or total AR?

Use billed AR if you can. HFMA’s MAP Key AR-1 divides aged balances by total billed AR, which leaves out unbilled charges and gives a cleaner view of claims that have actually gone out. Total AR is fine for trending, as long as you use the same denominator every month. HFMA’s buckets run 0 to 30, 31 to 60, 61 to 90, 91 to 120 and over 120 days, so AR over 90 days is the sum of the last two.

What percentage of AR over 90 days is normal?

A healthy practice keeps under 15% of AR past 90 days, and a top performer stays under 10%. Above 20% means claims are going unworked, and above 25% usually means nobody owns follow-up. In our billing reviews, 27% of total AR sat past 90 days in the average practice reviewed, and only 18% of practices reviewed kept AR past 90 days under 15%.

• Under 10%: top performing.
• 10% to 15%: healthy.
• 15% to 20%: slipping. Check which payer class is aging.
• 20% to 25%: leaking. Denials and patient balances are not being worked.
• Over 25%: urgent. Old claims are about to become write-offs.

Why do published benchmarks range from 10% to 22%?

Because nobody publishes an official AR over 90 benchmark. HFMA defines the measure but sets no target. MGMA publishes figures for AR over 120 days instead: a median of 13.54% of total AR in multispecialty practices, and 8.1% for its better performing practices. The 10%, 15% and 18% to 22% figures you see online are rules of thumb. They differ because of specialty, payer mix, the share of patient balances, and whether the report ages claims by date of service or by last bill date. Use under 15% as your target and compare yourself with your own specialty.

Is AR over 90 days different for Medicare, commercial and patient balances?

Yes, and one blended number hides the difference. Medicare claims usually pay quickly once they are clean, so Medicare AR past 90 days should be small; if it is not, look for denied claims waiting on a correction. Commercial AR ages with payer behavior: requests for records, pended claims and slow appeals. Medicaid often runs older because of eligibility churn and retro enrollment. Patient AR ages the most, because statements go out only after the payer pays and many patients wait for a second or third notice. Set a target for each payer class, and investigate the class that moves first when the total rises.

What should healthy AR aging buckets look like?

Healthy AR aging buckets are front loaded: most of the money sits in 0 to 30 days, and each older bucket is smaller than the one before. The average practice reviewed held 44% of AR in the 0 to 30 day bucket and 18% past 120 days, against a healthy target of 62% and 8%.

The shape matters as much as the total. A bulge in 31 to 60 days points to slow payers or missing information requests. A bulge past 120 days points to denials nobody reworked or patient balances nobody chased. When a bucket gets bigger instead of smaller as claims age, that is where the process breaks.

What is aged AR costing a practice? A worked example

Take a practice with 3 providers collecting about $90,000 a month, or roughly $1,080,000 a year. It carries $150,000 in total AR, about 51 days of collections.

• AR past 90 days: $40,500, or 27% of total AR
• Split: $28,500 aged 91 to 180 days and $12,000 past 180 days
• Expected recovery if worked now: $28,500 times 61% = $17,385, plus $12,000 times 23% = $2,760, for $20,145
• Target: 12% of $150,000 = $18,000, so $22,500 has to be collected, corrected or resolved

Every month of delay moves dollars from the 61% column into the 23% column. The same practice also shows why the percentage can mislead. If the front end improves and current AR drops from $109,500 to $80,000 while the aged $40,500 stays untouched, total AR falls to $120,500 and the share past 90 days rises to 33.6%. The practice got faster and the report got worse, because nobody worked the old claims.

Can accounts receivable over 90 days still be collected?

Yes, most of it, if you work it before the payer’s deadlines close. We recovered 61% of the dollar value of claims aged 90 to 180 days that practices had stopped working. Claims aged past 180 days were recovered at 23% of dollar value, and timely filing denials were almost never recovered: only 4% of those were recovered.

Deadlines decide what is still collectible. Medicare requires claims to be filed no later than 1 calendar year after the date of service under 42 CFR 424.44. A Medicare redetermination must be requested within 120 days of receiving the initial determination, and the contractor generally decides within 60 days. Commercial filing limits are shorter and set by contract; Cigna lists 90 days for participating providers and 180 days for out-of-network claims. A commercial claim that never went out is dead long before it looks old on the report.

Appeals are worth filing. Appeals filed by Luxen were overturned 68% of the time, and median appeal turnaround was 34 days from filing to payer decision. Our guide to claim denial reasons and appeals covers the codes that drive most aged denials.

What mistakes make an aging accounts receivable report misleading?

The biggest mistake is aging claims from the last bill date instead of the date of service. Each resubmission resets the clock, and old claims drift back into younger buckets. Practices that re-aged claims on resubmission understated AR past 90 days by a median 7 points in our billing reviews. Other common mistakes:

• Netting credit balances against old AR. Credit balances were netted against aged AR in 1 in 5 reviewed practices. Refunds owed to patients or payers are liabilities, not payments on old claims.
• Mixing patient and insurance AR. Patient balances made up 41% of AR past 90 days in the average practice reviewed, and they need a different workflow from payer claims.
• Writing off to hit the target. Clearing old AR by adjustment makes the percentage look good and turns receivables into permanent losses.
• Ignoring credentialing holds. Claims for a provider who is not yet enrolled age in place. Credentialing lapses delayed payment for 1 in 12 providers added in the prior year, and a lapsed re-credentialing held payments for a median of 47 days. Clean provider credentialing and re-credentialing keeps those claims out of the aged buckets.
• Looking at total AR only. A healthy total can hide one payer with half its balance past 90 days.

How do you bring AR over 90 days under 15%?

Work the oldest collectible dollars first, fix the causes behind them, then keep the buckets clean with a monthly review. The sequence we use:

1. Rebuild the aging by date of service and split it by payer class.
2. Sort aged claims by deadline, then by dollar value. Claims close to a timely filing or appeal limit go first.
3. Work every claim to a status: paid, corrected and resubmitted, appealed, or written off with a reason code. A dedicated denial and aged AR recovery team works the 90, 120 and 180 day buckets on this schedule.
4. Fix the top three causes. Most aged claims trace back to eligibility errors, missing authorizations and coding or modifier errors.
5. Separate patient AR. Send a plain-language statement, follow up by text and offer a payment plan. Strong patient billing and statements keep balances from reaching 90 days.
6. Review the aging every month. Practices that reviewed AR ageing monthly carried 12 fewer days in AR.

Across client practices, the share of AR past 90 days fell from 29% to 12% within 180 days, and median days in AR dropped from 54 to 33 within 120 days. The revenue cycle KPI targets we hold every account to put AR past 90 days under 15%.

Should you work aged AR in-house or outsource it?

Work it in-house if a biller has dedicated hours each week for claims past 90 days. Outsource it if nobody does. 42% of practice managers said nobody owns denial follow-up full time, and old AR is the first thing that gets skipped when the front desk is busy. For practices collecting $1.5M to $3M a year, every 10 days removed from AR released a median $41,000 in cash.

Outsourced billing typically costs 3% to 6% of collections, and some firms offer aged AR cleanup as a separate project. Ask any vendor to show your aging by date of service and by payer class before and after, not just a total. King-American Ambulance cut days in AR from 71 to 38, as described in our King-American Ambulance case study. For help comparing vendors, see how to choose a medical billing company for a small clinic, or book a free billing review to see your own aging rebuilt.

AR over 90 days vs AR over 120 days vs days in AR: which benchmark should you use?

Use AR over 90 days as your early warning, AR over 120 days to compare against MGMA data, and days in AR to track speed. Each answers a different question.

Dental

Dental practices reviewed carried 19% of AR past 90 days, and much of it was patient balance, not insurance. Pre-treatment estimates were skipped on 38% of crowns and implants, so patients were surprised by the bill and paid slowly. Claims denied for missing narratives or X-rays also age out. Send attachments with every major restorative claim and give patients a written estimate before treatment. Our dental revenue cycle benchmarks cover the full KPI set.

Physical therapy

Therapy practices reviewed carried 22% of AR past 90 days. Coverage changes are the main cause: 33% of therapy episodes had a coverage change mid-episode that was not caught, so visits kept going to a plan that no longer applied. Rerun eligibility every 30 days during an episode and before each authorization renewal. Our physical therapy billing guide covers units, KX and plan of care rules.

Behavioral health

Behavioral health practices reviewed carried 24% of AR past 90 days. Solo therapists carried a median 41 days in AR, against 29 for group practices, and new clinicians waited a median 96 days to go in-network with commercial payers. Claims for clinicians who are not yet enrolled go straight into the aged buckets. Hold or route those claims correctly and verify the behavioral health carve-out at intake. See our billing guide for therapists.

Ambulance

Ambulance has the heaviest aging we see: ambulance agencies carried 37% of AR past 90 days. Self-pay transports, Medicaid and missing paperwork drive it. Physician Certification Statements were missing or unsigned on 18% of non-emergency transports, and those claims sit until someone chases a signature. Get the PCS before billing and work self-pay and facility accounts separately. Our ambulance revenue cycle page lists the targets.

Primary care

Primary care ages the least. Practices reviewed carried 18% of AR past 90 days, and primary care practices carried a median 36 days in AR. Most aged balances here are patient balances after preventive visits: 1 in 9 patient balance calls was about a preventive visit billed with a cost share. Check preventive coding before the claim goes out and move patient balances to text follow-up early.

Across these five specialties, the share of AR past 90 days ranged from 18% in primary care to 37% in ambulance.