Accounts Receivable and Collections
Domain 6: Accounts Receivable and Collections
This domain covers AR aging, follow-up, self-pay collections, charity care, and collection laws.
Core rules
- Days in AR = (total AR / total charges) × days in period; use billed charges consistently.
- Net collection rate = payments / (charges minus contractual adjustments).
- Age AR in 0–30, 31–60, 61–90, 91–120, and 120+ days; follow up by payer and dollar amount.
- Self-pay: statement cycles, payment plans, charity screening, discounts, and collection agency placement.
- FDCPA limits third-party collector conduct; TCPA restricts autodialed calls; state laws add protections.
- Bankruptcy: stop collection, file a proof of claim, and follow the automatic stay.
- Write off small balances per policy; do not write off appealable claims.
Worked example
AR is $2,000,000 and charges for 30 days are $1,000,000. Days in AR = 60. If the net collection rate is 92%, compare it with target; investigate denials and aging over 90 days. A falling net collection rate with stable days in AR may signal underpayment or contractual issues.
Traps
Using gross charges in net collection rate; writing off old AR without follow-up; skipping charity screening; violating FDCPA or TCPA; not reconciling collection agency reports.