Accounts Receivable, Collections, and Revenue Cycle
The revenue cycle as a chain
Pre-registration, registration and eligibility, charge capture, coding, claim submission, remittance posting, denial management, AR follow-up, and collections. Every handoff leaks revenue; most denials are created before the claim is ever sent.
AR metrics
Aging buckets are typically 0-30, 31-60, 61-90, 91-120, and 120-plus days. Days in AR = total AR divided by average daily charges. Also track clean claim rate, denial rate, first-pass resolution rate, and net collection rate. Rising AR in the oldest buckets signals a follow-up or denial-management breakdown, not a billing clerk problem.
Denials and follow-up
Categorize denials by cause: registration and eligibility, authorization, coding, medical necessity, timely filing, duplicate, and bundling. Root-cause correction is worth more than rework. Work the highest-dollar, oldest claims first, document every touch, and appeal within the payer window.
Patient collections
Collect at the time of service when possible, offer written payment plans, and follow a documented financial assistance and charity care policy. Third-party collectors are governed by the FDCPA: no calls before 8 a.m. or after 9 p.m. local time, no contact at work once the patient says to stop, no disclosure of the debt to third parties, and no harassment. State law can be stricter.
Worked example
Total AR is $300,000 and monthly charges are $900,000, so average daily charges are $30,000. Days in AR equals 10. That is a healthy figure; 45 days would indicate a collection problem.
Traps
Writing off balances that are collectible. Discussing a balance with a spouse or adult child without authorization. Failing to document collection activity. Ignoring small balances until they age past 120 days.