How to Read an AR Aging Report and Find Revenue Leaks

The usual reaction, and why it fails

When AR grows, the typical response is to tell the billing team to work harder. Owners look at the 90+ day bucket, billers show a long list of calls made and claims resubmitted, and the bank balance does not change. The activity is real, but it is aimed at the wrong layer. Good medical billing and RCM starts with knowing which layer each claim is stuck in.

A standard aging report sorts claims by how many days they have been open. That tells you when a claim stalled. It does not tell you why, and the why decides what to do next.

Four categories to sort your AR into

1. Payer setup gaps. The provider, location or contract is not set up correctly with the payer. Claims for correctly documented services deny or sit in a queue. In fast-growing groups this category often holds the largest dollars, and it needs a credentialing fix and a formal escalation, not routine follow-up.
2. Front-end failures. Eligibility was not verified, coverage changed mid-treatment, or a required authorization was missing or expired. The fix is partly a workflow change at the front desk so it stops recurring.
3. Coding and documentation issues. Wrong modifiers, mismatched codes or documentation that does not support the service billed. These need a coder or clinician to correct and a feedback loop so the same error is not repeated.
4. Genuine slow pay and underpayments. The claim is clean and the payer is slow, or it is paid below the contracted rate. These need contract and fee schedule comparison, plus a disciplined appeal process.

How to do it in practice

Add a “root cause” column to your aging report and tag every balance above a threshold you choose, for example anything over $500 and over 60 days. Review it weekly, not monthly. Look at totals by category rather than by age, and send each category to the person who can actually fix it. A claim stuck because of a payer setup problem should reach a credentialing specialist, not stay in a biller’s call queue.

At MedWork Services, billing works the aging report. When a claim is stuck or rejected because of a credentialing or enrollment issue, it is handed to our credentialing department to resolve, while billing continues with the rest. You can see this approach applied in our podiatry case study, where sorting aged AR by cause led to $90K in cash collected within 60 days.

Frequently asked questions

What is a good AR aging benchmark?

Benchmarks vary by specialty and payer mix. A useful internal measure is the percentage of AR older than 90 days and how that figure changes month over month.

What does a growing 90+ day bucket usually mean?

Often a recurring root cause, such as a payer setup issue or an authorization problem, rather than simple slowness. Sorting by cause is the fastest way to find out.

Should billing and credentialing be connected?

Yes, through a clear handoff. Many stuck claims trace back to enrollment or payer setup, so claims with a credentialing cause should go to someone who can fix the enrollment, rather than staying in the billing queue.

Want a second look at your aging report?

We will sort your AR by root cause and show you where the cash is held up.

The initial audit is complimentary.

Related reading: Case Study: Recovering $90K in Aged AR for a Podiatry Practice · Behavioral Health Billing: Common Denial Causes and How to Fix Them