How Medical Practices Can Reduce Days in AR and Resolve Aging Claims Over 90 Days

To reduce days in AR in medical billing, first measure it with one consistent formula. Then split the aging report by payer and claim status, and work claims over 90 days in deadline order. Also correct rejections before the filing limit closes, appeal denials with evidence that answers the denial reason, and automate claim status checks. Finally, reconcile every ERA against the deposit and the contract.

1. What Days in AR Measures and How to Calculate It

Days in accounts receivable (AR) estimates how many days of billing activity remain unpaid. Because it is an average, it shows whether collections are speeding up or slowing down. However, it does not show which claims are stuck.

The metric is only useful if you calculate it the same way every month. Published definitions differ, though:

Source	Formula	Look-back period	Notes
HFMA MAP Key FM-1 (Net Days in A/R)	Net AR ÷ average daily net patient service revenue	Most recent three months, using the actual number of days (for example, 91 days for April to June)	Net AR is the balance-sheet patient receivable, net of credit balances, contractual allowances and allowances for bad debt and charity
MGMA (days of adjusted fee-for-service charges in AR)	Total AR ÷ (adjusted FFS charges × 1/365)	Annual, per the definition	MGMA also defines a gross-charges version
AAFP practice-management module	(Total receivables − credit balance) ÷ average daily gross charges	3, 6 or 12 months	Its worked example uses 365 days

Sources: the HFMA 2023 MAP Keys, the MGMA DataDive Definitions Glossary (2025) and the AAFP module on days in accounts receivable.

Keep the numerator and the denominator on the same basis. For example, if your AR balance shows full charges (before contractual adjustments), divide by gross charges. If the balance is net of expected adjustments, divide by net revenue or adjusted charges instead. Otherwise, dividing a gross AR balance by net revenue inflates the result.

Write your formula and look-back period into your monthly report. Then, when a billing company, consultant or benchmark quotes days in AR, ask which formula produced the number before you compare.

Worked Example (Hypothetical Practice, Net Basis)

Input	Value
Net AR at month end	$420,000
Net revenue for the last 90 days	$1,080,000
Average daily net revenue ($1,080,000 ÷ 90)	$12,000
Days in AR ($420,000 ÷ $12,000)	35.0 days

What Is a Good Days in AR Number?

The AAFP module suggests that days in AR should stay below 50 at minimum, with 30 to 40 preferable. However, it does not state the data behind that range, and it uses gross charges. MGMA sells specialty benchmark data through its DataDive product.

Meanwhile, many vendor pages quote other targets without naming a data source. So your most reliable benchmark is your own trend, calculated the same way each month.

How to Calculate AR Over 90 Days

AR over 90 days (%) = (balance aged 91–120 days + balance aged over 120 days) ÷ total billed AR × 100

For example, if $96,600 of the $420,000 in the worked example is older than 90 days, then 23.0% of AR is over 90 days.

HFMA’s MAP Key AR-1 reports each aging bucket as a share of total billed AR. It also ages physician and outpatient accounts from the date of service and leaves credit-balance accounts out of total billed AR.

In practice, age claims from the date of service, not from the last billed date. Otherwise, a resubmission that resets the clock can hide the claims closest to their filing deadline.

2. How to Analyze an AR Aging Report

A total balance tells you how much is outstanding. However, segmenting it tells you why. An AR aging bucket analysis starts with the standard buckets and then cuts the report by the factors that point to a fix.

Bucket	What it usually means	What to do
0–30 days	Normal processing, plus any front-end rejections	Confirm that the payer accepted every claim (277CA), and correct rejections the same week
31–60 days	Many clean claims should have paid by now	Run a status check on claims with no remittance, and work new denials
61–90 days	Something is blocking payment	Find the root cause: records request, denial, enrollment or coordination of benefits
91–120 days	Filing and appeal deadlines are getting close	Check the controlling deadline on every claim; then correct, appeal or escalate
Over 120 days	Highest risk of permanent loss	Decide on each claim: appeal, escalate, or adjust with a documented reason

Cut the Report Five Ways

• Payer and plan: one payer’s backlog or policy change shows up as a cluster, so sort by payer first.
• Financial class: insurance balances and patient balances need different work.
• Claim status: rejected, accepted with no decision, denied, underpaid, paid but unposted, or patient responsibility.
• Denial reason: group by Claim Adjustment Reason Code (CARC) and Remittance Advice Remark Code (RARC), because repeat codes point to process gaps.
• Provider and location: enrollment or documentation problems often follow one provider or site.

Identify AR Bottlenecks

Pattern in the report	Likely bottleneck	Check first
Claims with no record at the payer	Rejections that nobody corrected	999 and 277CA rejection reports
One payer spikes in the 61–90 bucket	Payer backlog, records request or enrollment issue	Payer portal messages and provider enrollment status
The same CARC keeps appearing	A gap in a front-end or coding process	Eligibility, authorization or coding workflow
Paid claims still carry balances	Posting errors or underpayments	ERA posting exceptions and contracted rates
Patient AR keeps growing	Statement timing or missing estimates	Statement cycle and point-of-service collection
AR rises while denials stay flat	Charge lag or delayed submission	Days from date of service to claim submission

A rejection and a denial need different fixes. For example, you correct and resubmit a rejection, but you appeal most denials. Our guide to the difference between claim rejection and denial explains how to tell them apart.

3. How to Resolve Insurance Claims Over 90 Days

Work the 90+ bucket in deadline order first. Then sort by expected recoverable value (balance multiplied by a realistic likelihood of payment), and finally by age. For example, a small claim that loses its filing rights next week matters more than a large claim with months left.

Step	Action	What to Do
Step 1	Find the controlling deadline	Identify the clock that applies now: initial filing, corrected claim, reopening or appeal level. Then record the date.
Step 2	Confirm the true status	Check the 277CA, a 276/277 status response or the payer portal, because a “billed” status in your system proves nothing.
Step 3	Classify the claim	Rejected, pending, denied for a correctable error, denied on the merits, underpaid, or paid but not posted.
Step 4	Apply the matching remedy	Use the table below, and keep proof of every submission.
Step 5	Set an owner and a next date	Every claim leaves the queue with a named owner and a follow-up date before its deadline.
Step 6	Close with a reason	Payment, appeal decision, or an adjustment with a specific reason code that you can report on.

Match the Remedy to the Claim Status

Status	Remedy	Watch for
Rejected, never accepted	Correct and resubmit	For Medicare, the one-year filing limit still applies to a corrected resubmission
Accepted, no decision	Status inquiry, then escalation	Record reference numbers and the payer’s stated processing date
Denied for a clerical error (Medicare)	Reopening	Within one year of the initial determination; it is not an appeal
Denied on the merits	Appeal with evidence	Medicare redetermination: 120 days from receipt of the initial determination
Paid below the contract	Reconsideration or appeal	Attach the contract rate and your calculation
Paid but unposted or misapplied	Posting correction	Match the ERA to the deposit first
Patient responsibility	Statement or payment plan	Confirm that the amount is a PR adjustment before you bill the patient

4. Timely Filing Limits and Appeal Guidelines

Missed deadlines turn recoverable claims into write-offs. Because rules differ by payer, build a deadline matrix and keep it current.

Original Medicare Timely Filing

Under 42 CFR 424.44, providers must file Part A and Part B fee-for-service claims within one calendar year (12 months) of the date of service. For professional claims with a date span, Noridian’s JE Part B timely filing guidance uses the “From” date. For institutional claims with span dates, however, the “Through” date controls.

Medicare extends the filing limit only in these situations:

• An error or misrepresentation by a CMS employee, a Medicare contractor, or an HHS agent performing Medicare functions.
• Retroactive Medicare entitlement, effective on or before the date of service.
• A state Medicaid agency recovers its payment six or more months after the service because of retroactive Medicare entitlement.
• Retroactive disenrollment from a Medicare Advantage plan or PACE organization, when the plan recovers its payment six or more months after the service.

In each case, the new deadline is the last day of the sixth calendar month after a trigger month. For an error, that is the month Medicare notifies you that it corrected the error. With retroactive entitlement, it is the month of the entitlement notice. After a Medicaid or plan recovery, it is the month of the recovery.

A Medicare denial for late filing is not an initial determination, so it has no appeal rights. If no exception applies, the practice loses the revenue. Also, Medicare Advantage plans set their own filing and appeal rules.

Reopening or Appeal?

Use a reopening to fix clerical errors, such as transposed codes or math mistakes. CGS, a Medicare contractor, says to request it within one year of the initial determination. In contrast, disagreements about coverage, medical necessity or edits go to redetermination, the first level of appeal. CMS also notes that MACs do not process minor errors and omissions through the appeals process.

What Are the Five Levels of the Medicare Appeals Process?

Level	Reviewer	Deadline to file	Notes
1. Redetermination	Medicare Administrative Contractor (MAC)	120 days from receipt of the initial determination	Decision generally within 60 days
2. Reconsideration	Qualified Independent Contractor (QIC)	180 days from receipt of the redetermination	Decision generally within 60 days; later levels may exclude evidence you did not submit here unless you show good cause
3. Administrative Law Judge hearing	Office of Medicare Hearings and Appeals	60 days from receipt of the reconsideration	Amount in controversy of at least $200 (2026 and 2027)
4. Appeals Council review	Medicare Appeals Council (Departmental Appeals Board)	60 days from receipt of the ALJ decision	—
5. Judicial review	Federal district court	60 days from receipt of the Appeals Council decision	Amount in controversy of at least $1,960 (2026); $2,000 for requests filed on or after January 1, 2027

Medicare presumes that you received a notice five calendar days after its date, unless evidence shows otherwise. The amount-in-controversy figures come from the CMS annual notices in the Federal Register for 2026 and 2027.

Before you file, review CMS guidance on the first level of appeal (redetermination) and the second level of appeal (reconsideration).

Medicaid and Commercial Plans

• Medicaid: federal rules require state Medicaid agencies to set a claim deadline of no more than 12 months from the date of service (42 CFR 447.45(d)). Narrow exceptions apply, such as claims that follow a timely Medicare claim. So check your state program’s and managed care plans’ manuals for their actual limits.
• Commercial plans: filing and appeal limits come from the provider contract, the payer’s provider manual and state law. Therefore, never apply one payer’s limit to another.
• ERISA group health plans: employer plans under ERISA must give claimants at least 180 days after an adverse benefit determination to appeal (29 CFR 2560.503-1(h)(3)(i)). This covers member appeals, including those a provider files as the patient’s authorized representative. However, disputes under your provider contract follow the contract terms instead.

Build a Payer Deadline Matrix

Keep one row per payer, with five columns: initial filing limit, corrected claim limit, first-level appeal limit, the source document, and the date you last verified it. Then reverify each row when a contract renews or the payer updates its manual.

5. Build a Claim Appeal Documentation Strategy

A strong appeal answers the payer’s stated denial reason with the specific evidence that resolves it. In contrast, sending the whole chart makes the key page harder to find.

What to Include in an Appeal Packet

• A cover letter with the claim number, member ID, date of service, billed amount and denial code, plus the result you want.
• The denial notice or remittance advice that shows the CARC and RARC.
• Evidence that answers that reason (see the table below), indexed and highlighted.
• The payer policy, LCD or NCD you rely on, with the relevant section cited.
• A corrected claim, if the payer requires one with the appeal.
• Proof of submission, such as confirmation numbers, fax or portal receipts, or mail tracking.

Match the Evidence to the Denial Reason

Denial reason	Evidence that answers it
Medical necessity	Notes that document indications, the policy criteria met, and prior treatments and results
Authorization	Authorization number, approved dates, CPT codes, units and provider that match the claim
Coding or bundling	Corrected codes, modifier rationale and documentation that supports a separate service
Timely filing (commercial)	Original clearinghouse acceptance reports and payer acknowledgments with dates
Eligibility or coordination of benefits	Eligibility response from the date of service and the primary payer’s remittance
Underpayment	Contract fee schedule excerpt and your expected-payment calculation

Medicare Redetermination Requests

For Original Medicare, submit the redetermination request in writing. You can use form CMS-20027 or a written request. Either way, include the beneficiary’s name and Medicare number, the items or services and dates of service, the name of the party or representative, and the reason you disagree.

Because later levels may exclude evidence you did not give the QIC, assemble the full packet early. For a deeper look at the most contested category, see why medical necessity denials happen and how to fix them.

6. Clearinghouse Claim Status Automation

Many “lost” claims are visible in electronic transactions that your clearinghouse already receives. Under HIPAA, the claim status inquiry and response (276/277) and the claim payment and remittance advice (835) are adopted X12 version 5010 standards with federally mandated operating rules. So payers that support them must answer in a standard format.

What Each Transaction Tells You

Transaction	What it tells you	What to automate
999 implementation acknowledgment	Whether the file passed X12 syntax checks; the system does not forward a rejected file for processing	A same-day alert on any rejected or partially accepted file
277CA claim acknowledgment	Whether the front end accepted or rejected each claim; accepted claims receive a claim number	A rejection worklist, plus a flag for claims with no 277CA
276/277 claim status	Where an accepted claim sits in adjudication	Scheduled batch inquiries at payer-specific day thresholds
835 electronic remittance advice	The adjudication result, adjustments and reason codes	Auto-posting, with exceptions routed to a worklist

A clearinghouse transmission report does not prove that the payer accepted the claim. For instance, CGS tells Medicare submitters to expect a 999 and/or 277CA within one hour to 48 hours. It also says that an accepted 277CA includes the claim’s ICN/DCN number.

Worklist Rules to Automate

Use these rules as starting points, and then adjust them to each payer’s contract and your own history:

• If no 277CA arrives two business days after submission, investigate the transmission.
• When a 277CA shows a rejection, correct and resubmit the claim within the week, while the filing clock is still open.
• If no 835 arrives after the payer’s normal processing window, send an automated 276 status inquiry. For Medicare, CGS notes that contractors have up to 30 days to process clean claims without paying interest. So 30 days after acceptance is a sensible trigger.
• When a 277 shows that the claim is pending for information or records, route it to that payer’s owner the same day.
• After two status checks with no movement, move the claim to a person for a call or portal escalation.

7. Payer Insurance Follow-Up Workflow

Automation finds stalled claims; however, people resolve them. A consistent follow-up workflow keeps claims moving between billing cycles.

So give each payer a named owner. That person answers records requests through the payer’s required channel and keeps the receipt. The owner also classifies each new denial within a few business days: correct, reopen, appeal or adjust. When status checks show no movement, the owner escalates to a payer supervisor or provider representative.

Write Follow-Up Notes the Next Person Can Use

Good follow-up notes are short but complete. Include the date, channel, representative name or reference number, what the payer said, the action taken, and the next follow-up date. In contrast, a note that only says “called payer” forces the next person to start over.

8. ERA and EOB Reconciliation Best Practices

Posting a payment is not the same as reconciling it. Reconciliation confirms that the money arrived, that it matches the remittance, and that every adjustment is correct.

Match the Deposit to the ERA

The CAQH CORE EFT and ERA Reassociation Rule (Phase III CORE 370) uses one number to match the ERA to its deposit. Specifically, that number is the EFT reassociation trace number in the 835’s TRN segment (TRN02).

The rule also requires health plans to release the ERA no more than three business days before or after the EFT effective entry date. In addition, plans must give providers written procedures for late or missing EFTs and ERAs. Under the rule, one counts as late when it has not arrived four business days after the other.

Check Every Adjustment

Claim adjustment group codes show who is responsible for an adjustment: CO (contractual obligation), PR (patient responsibility), OA (other adjustment) and PI (payer-initiated reduction). Importantly, CMS states that providers may bill Medicare beneficiaries only when the remittance uses group code PR with an adjustment.

Then reconcile each remittance against this checklist:

• The deposit amount equals the ERA total, and the trace numbers match.
• Each line’s allowed amount equals the contracted or fee-schedule rate.
• Your team routes zero-paid and partially denied lines inside “paid” claims to the denial worklist.
• Every recoupment and offset ties back to the original claim.
• Only PR amounts move to patient balances.
• Staff post paper EOBs to the same standard as ERAs and request missing ERAs under the payer’s late or missing procedure.

For a refresher on the two documents, see the difference between ERA and EOB.

9. Measure Progress as You Reduce Days in AR in Medical Billing

Track days in AR and AR over 90 days monthly with the formulas from Section 1. Then add these supporting measures, and calculate each one the same way every time.

Core AR Metrics

KPI	How to calculate	Why it matters
First-pass acceptance rate	Claims accepted on first submission ÷ claims submitted	Front-end data quality
Initial denial rate	Denied claims ÷ adjudicated claims (keep claims or lines consistent)	Volume of avoidable rework
Net (adjusted) collection rate	Net FFS revenue × 100 ÷ adjusted FFS charges (MGMA)	How much collectible revenue you actually collect
Charge lag	Average days from date of service to claim submission	Days added before the payer clock starts

Weekly AR Review Checklist

• Every claim over 90 days has an owner, a next action and a date.
• A daily list tracks claims within 30 days of a filing or appeal deadline.
• Your team has corrected last week’s 999 and 277CA rejections.
• Someone has classified each new denial and assigned the top repeating CARC to a fix.
• ERAs match deposits, and you have requested any missing ERAs.

Track Write-Offs and Vendor Reporting

Write-off categories matter for reporting, because a timely-filing adjustment reflects a process failure, not a contract term. So report timely-filing dollars as their own line each month, with a target of zero. Our guide to write-offs in medical billing explains the main types.

If an outside billing company manages your AR, our article on the hidden costs of 5% RCM models lists the questions to ask, including how it works the 90+ bucket.

Frequently Asked Questions