How to read your A/R aging report

Your accounts receivable aging report is the one report every practice-management system can produce and most practice owners never open. It answers a simple question: who owes you money, and how long have they owed it? Here’s how to read it in ten minutes.

What it shows

A row for each payer (or each patient, depending on how you run it), with the outstanding balance split into columns by age. The usual columns are 0 to 30 days, 31 to 60, 61 to 90, 91 to 120, and over 120. Age is counted from the date the claim was sent, or sometimes from the date of service. Check which one your system uses. It matters for filing deadlines.

Run it two ways

Run it once by payer and once by patient. They tell you different things.

By payer shows you insurance money that hasn’t come in. That’s where the process problems live: claims that denied and were never worked, claims that were never sent, claims a payer is sitting on.

By patient shows you balances the patient owes after insurance has paid its part. That’s a collections question, not a billing question, and it needs a different fix.

What to look at first

The far-right columns. Everything over 90 days is a claim that has been waiting a long time. Some of it is still collectible. Some of it is already past the payer’s filing deadline and will never be paid. Every payer sets its own deadline, and once it passes, the claim is gone. The older the bucket, the more of it is already lost.

One payer holding most of the old balance. If one payer is much older than the others, that payer has a rule your practice isn’t following. Find the rule.

Negative balances. A negative number in a payer row usually means a credit: the payer paid more than was billed, or paid twice, or a refund is owed. Credits make the total look smaller than it is and can be a compliance problem if they sit unrefunded.

Unapplied cash. Money that came in and was never matched to a claim. It’s sitting in a holding account, and the claims it should have closed are still showing as unpaid. This makes the whole report wrong.

What a healthy report looks like

Most of the balance in the first column. A small amount in the second. Very little past 90 days, and what’s there is known and being worked. No credits sitting for months. No unapplied cash.

What an unhealthy one looks like

A big number in the over-120 column that nobody can explain. Balances from clinicians who left the practice a year ago. Payers that show the same old claims month after month. If your report looks like this, the money isn’t lost yet, but some of it is, and more of it goes every month.

How often to run it

Monthly at least. If you or your biller aren’t looking at it monthly, no one is watching the old buckets, and the old buckets are where money quietly disappears.

The one question to ask your biller

“What’s in the over-90 column, by payer, and what are you doing about each line?” If the answer is clear and specific, your billing is probably fine. If the answer is vague, that’s the problem.