Cash flow challenges threaten healthcare practice financial stability, and at the heart of many problems lies aged accounts receivable—outstanding balances aging beyond 90, 120, or even 180 days without resolution. Old AR cleanup offers healthcare providers a systematic approach to recovering trapped revenue while implementing processes that prevent future accumulation.
Medical Billers and Coders (MBC) brings 25+ years of specialized expertise helping physicians, hospitals, and large practices execute comprehensive old AR cleanup initiatives through our proven old A/R recovery services.
Understanding Old AR and Its Financial Impact
Accounts receivable aging refers to tracking unpaid invoices and categorizing them based on how long they’ve been outstanding. Aging AR refers to outstanding balances owed to healthcare providers that remain unpaid beyond expected timeframes, typically categorized as 30, 60, or 90 days overdue.
Healthcare practice financial health can be assessed through A/R aging benchmarks: 0-30 days indicates good financial health, 31-60 days indicates average financial health, and 61-90 days or more indicates poor financial health. When receivables age beyond 90 days, collection probability drops dramatically—accounts under 30 days collect at rates above 95%, while those exceeding 120 days may collect below 50%.
Why Old AR Accumulates in Healthcare Practices?
Multiple factors contribute to aging accounts receivable buildup. Claim denials without follow-up allow accounts to age while appeal windows expire. Insufficient staffing resources mean practices lack dedicated personnel to pursue aged accounts systematically. Complex payer requirements demand specialized knowledge that overwhelmed in-house billing departments often lack.
Over 74% of healthcare providers now report increased financial burden on patients due to high-deductible health plans, creating collection challenges. Without systematic processes for identifying aged accounts and implementing structured follow-up protocols, revenue remains uncollected indefinitely.
The True Cost of Aging Accounts Receivable
The financial impact of old AR extends beyond delayed revenue. Each month that passes increases the probability accounts will never be collected. Industry studies show accounts aging beyond 120 days have collection probabilities below 50%, effectively representing a 50% or greater loss on those balances.
Capital tied up in aged receivables cannot be invested in practice growth, equipment upgrades, or additional staff. As accounts receivables increase, cash flow challenges intensify, potentially forcing reliance on credit lines that carry interest costs. Staff time spent researching old accounts represents expensive administrative overhead that could be allocated to processing current claims efficiently.
The Old AR Cleanup Process: Step-by-Step
Effective old AR cleanup requires methodical processes that address aged accounts strategically while implementing prevention measures.
Step 1: Comprehensive AR Aging Analysis
Old AR cleanup begins with thorough analysis of current accounts receivable aging reports. Generating an aging AR report serves as a critical step in effective receivables management, allowing organizations to pinpoint credit risks and enhance billing strategies.
Segment receivables by aging category (30-60 days, 61-90 days, 91-120 days, 120+ days) to understand scope and distribution. Identify dollar value in each bucket and calculate what percentage of total AR each category represents. Analyze aged accounts by payer source to identify which insurance carriers contribute most to aging problems.
Categorize aged receivables by denial reason to understand root causes—authorization issues, coding errors, documentation deficiencies, or timely filing problems. Medical Billers and Coders‘ old A/R recovery services begin with detailed aging analysis providing complete visibility into aged receivables and establishing baseline metrics for measuring cleanup progress.
Step 2: Prioritize Accounts for Recovery Efforts
Strategic old AR cleanup prioritizes recovery efforts based on collectability likelihood and financial impact. High-dollar aged accounts offer greatest financial impact from successful recovery. Focus first on accounts in the 90-120 day range where collection probability remains reasonable but time is critical.
Medicare and major commercial carriers typically offer better collection prospects than smaller payers. However, claims with remaining appeal rights demand immediate priority since missing appeal deadlines permanently eliminates recovery opportunities. Our dedicated account managers develop prioritized strategies that maximize recovery within available resources.
Step 3: Execute Targeted Recovery Actions
For denied claims, research denial reasons thoroughly using remittance advice and payer correspondence. By implementing coding audits, providing additional staff training, and streamlining pre-authorization processes, practices can reduce denial rates by 15% and improve Days in AR by 10 days within six months.
Gather supporting documentation including medical records, authorization documents, and payer policy language. Craft compelling appeal letters addressing specific denial reasons with clear documentation. Professional billing services bring expertise in payer appeal processes, understanding what documentation different carriers require.
For slow-pay accounts, implement persistent follow-up protocols with insurance carriers. Escalate stalled claims through payer hierarchy when standard follow-up proves ineffective. MBC’s system-agnostic approach integrates with your existing EMR software, tracking all follow-up activities systematically.
For patient responsibility balances, before patients leave, ask them to submit copays and process these immediately to identify possible delinquent payments. Offer payment plans making balances manageable for patients facing financial hardship. Send clear, consistent billing statements explaining balances, due dates, and payment options.
Step 4: Implement Prevention Strategies
The most effective old AR cleanup initiatives prevent future accumulation through systematic process improvements. Verify insurance eligibility before services to catch coverage issues early. Secure prior authorizations before care delivery—authorization-related denials are entirely preventable yet remain a leading cause of aging accounts.
Implementing best practices including accurate billing, efficient denial management, and proactive AR follow-up can significantly reduce outstanding accounts and improve cash flow. Ensure coding accuracy through certified coders who stay current with updates and payer-specific requirements.
Submit clean claims promptly after service delivery. Implement claim scrubbing processes catching errors before submission. Establish structured follow-up workflows addressing unpaid claims systematically based on aging category and payer source.
Technology Solutions Supporting Old AR Cleanup
Modern technology enables more effective old AR cleanup through automation, analytics, and workflow management. PM software can reduce aging accounts receivables as automation technology enables creation of workflows for staff based on factors like date of service, cash collection opportunity, and denial code receivables.
Advanced practice management systems automatically generate aging reports, flag accounts exceeding aging thresholds, and create work queues prioritizing collection efforts. Technology enables automated patient payment reminders via email, text, or phone that maintain consistent communication without consuming staff time.
Real-time reporting offers visibility into payment patterns, overdue payments, and overall financial health of receivables, allowing informed decision-making regarding collection processes. Medical Billers and Coders leverages advanced technology platforms while maintaining our system-agnostic approach, integrating sophisticated AR management tools with your existing practice management software.
When to Consider Professional Old A/R Recovery Services?
Practices lacking dedicated billing staff with time and expertise for systematic old AR cleanup benefit significantly from professional services. When aged AR includes significant denied claims requiring appeals or complex payer issues, professional expertise becomes invaluable. MBC’s 25+ years of experience includes deep knowledge of payer appeal processes and negotiation strategies maximizing recovery.
Practices facing immediate cash flow pressure cannot afford months-long cleanup efforts. Professional old A/R recovery services bring focused resources and proven methodologies accelerating recovery timelines, often delivering meaningful cash infusions within 30-60 days.
Medical Billers and Coders‘ comprehensive RCM services combine old AR recovery with denial management services and systematic processes keeping future receivables from aging unnecessarily.
Measuring Old AR Cleanup Success
To calculate days in AR, compute the average daily charges for the past several months, then divide total accounts receivable by the average daily charges. This metric should decrease as old AR cleanup progresses and prevention strategies take effect.
Track the percentage of total AR aging beyond 90 days. Successful cleanup initiatives steadily reduce this percentage as aged accounts are resolved. Calculate the percentage of expected reimbursement actually collected—as old AR cleanup recovers previously written-off accounts, net collection rates improve. Monitor actual cash collected from aged accounts month-over-month to demonstrate direct financial benefit.
CMS Compliance Considerations in AR Management
Healthcare providers managing accounts receivable must comply with federal regulations governing billing practices and accounts receivable management. According to CMS Medicare Financial Management guidance, providers must properly manage credit balances and accounts receivable in compliance with federal regulations found in Title 42 Code of Federal Regulations.
Practices participating in Medicare and Medicaid programs must meet standards for billing accuracy, timely claims submission, and appropriate accounts receivable management as outlined by CMS quality and safety standards. Healthcare providers should consult official CMS guidance on financial management requirements and ensure their old AR cleanup processes comply with all applicable federal regulations.
The MBC Advantage in Old AR Cleanup
Medical Billers and Coders delivers distinctive capabilities optimizing old AR cleanup outcomes. Our old A/R recovery services leverage 25+ years of experience with systematic approaches that have helped practices achieve 30% or greater A/R reduction through documented methodologies refined through thousands of successful recovery initiatives.
Each practice receives a dedicated account manager who understands specific aged AR challenges, maintains consistent communication, and ensures cleanup initiatives align with financial goals. Beyond standalone old AR cleanup, MBC offers complete medical billing services, denial management services, and RCM solutions addressing every revenue cycle component.
We work seamlessly with your existing practice management and EMR software, preserving technology investments while adding specialized recovery expertise. Our comprehensive reporting provides clear visibility into cleanup progress, recovery amounts, and performance against established goals.
Take Action: Begin Your Old AR Cleanup Journey Today
Aged accounts receivable represent trapped revenue that belongs to your practice. Every day without systematic old AR cleanup allows accounts to age further, reducing collection probability and constraining cash flow. Medical Billers and Coders stands ready to partner with physicians, hospitals, and large practices on comprehensive old AR cleanup initiatives that recover existing aged accounts while implementing preventive processes.
Schedule an Audit Today to receive comprehensive analysis of your current accounts receivable aging, identify specific recovery opportunities, and develop a customized old AR cleanup strategy tailored to your practice’s unique situation. Our detailed assessment will quantify revenue currently trapped in aged accounts and project expected recovery based on our proven methodologies.
Don’t let aged accounts receivable continue constraining your practice’s financial potential. Partner with MBC and transform accounts receivable management from a persistent problem into a systematic process that supports sustainable financial health and growth.
Frequently Asked Questions
Accounts receivable aging beyond 90 days is generally considered “old” AR that requires immediate attention. The longer accounts remain outstanding beyond this threshold, the lower the collection probability becomes, with accounts over 120 days collecting at rates below 50%.
Recovery rates vary based on account age and payer mix, but practices typically achieve 30% or greater A/R reduction through systematic cleanup efforts. Accounts under 120 days old have the highest recovery potential, though professional services successfully collect on significantly aged claims as well.
Most practices see meaningful results within 30-60 days when working with professional old A/R recovery services. Complete cleanup of substantially aged accounts may take 3-6 months depending on the volume and complexity of aged receivables requiring appeals and extensive follow-up.
Yes, but it’s challenging without dedicated resources. Many practices benefit from outsourcing old AR cleanup to specialists while internal staff focuses on preventing new aged accounts through improved current billing processes, creating a comprehensive approach to AR management.
Professional old AR cleanup services like MBC’s are designed to integrate seamlessly without disrupting current operations. Our system-agnostic approach works with your existing software and processes, adding specialized recovery expertise while your team maintains focus on day-to-day billing activities.
