Days in A/R: What Good Actually Looks Like

Days in A/R is the number every vendor quotes and the one most often used badly. It is a real measure. It is just not comparable across practices in the way people assume.

What it measures

Total accounts receivable divided by average daily charges. It answers roughly: at your current rate of billing, how many days of production are sitting unpaid?

Directionally it is excellent. A number that climbs month over month is a genuine warning, and one that falls after a process change is genuine evidence.

Why the benchmark is not universal

Payers pay at different speeds, and your mix determines your floor. A practice weighted toward payers that adjudicate quickly can hit a number a comp-heavy or Medicaid-heavy practice mathematically cannot, without either being run better.

Workers compensation runs on longer cycles by design. Some Medicaid managed care plans are slower than commercial. A practice with a large self-pay share carries balances that behave nothing like insurance receivables.

So "under 40 days" as a universal target is at best a rough gesture and at worst an argument for chasing a number your payer mix will not produce.

How to use it properly

• Track your own trend rather than someone else's benchmark.
• Segment by payer. One slow payer can carry the whole average, and the aggregate hides which.
• Read it beside A/R over 90 days. Days in A/R can look stable while the tail rots, and the second number catches what the first misses.

The right question is never "is 42 good?" It is "why is ours 42, and which payer is making it that?"