What is an Aging Report in Medical Billing? A Complete Guide

Unpaid balances and delayed reimbursements are part of every medical billing operation, but knowing how to tackle them effectively is what sets successful practices apart. The aging report is the go-to tool for identifying where your revenue is getting stuck and how to fix it. 

From tracking overdue claims to prioritizing follow-ups, the aging report is more than just a report—it’s your financial playbook. In this guide, we’ll take you through everything you need to know to make the most of this essential resource.

What is An AR Aging Report In Medical Billing?

An AR Aging Report in medical billing, short for Accounts Receivable Aging Report, is a detailed financial document that provides a snapshot of all unpaid claims or balances categorized by the length of time they’ve been outstanding.

Key Components of an AR Aging Report

1. Time Buckets: Reflect the age of unpaid claims or balances.

2. Payers and Patients: Separate listings of outstanding amounts owed by insurance companies and individual patients.

3. Claim Details: Includes data such as the claim date, billed amount, and any payments or adjustments made.

4. Totals by Category: Summarizes the total outstanding amounts for each time bucket.

Benchmark of A/R Aging

The benchmark for A/R (Accounts Receivable) Aging in medical billing serves as a standard for evaluating the performance and efficiency of a healthcare provider's revenue cycle management. These benchmarks help practices identify whether their outstanding receivables are within acceptable limits or if there are issues causing delays in collections.

Industry-Standard Benchmarks for A/R Aging

Percentage of A/R Over 90 Days:

Goal: Less than 15%-20% of total A/R.

Claims that are over 90 days old typically represent inefficiencies in billing or follow-up processes and risk becoming uncollectible due to payer policies, patient non-payment, or filing deadlines.

Days in A/R:

Goal: 30-40 days.

This metric measures how quickly claims are being paid. A high number indicates slow collections, delayed payer reimbursements, or inefficiencies in claim submission and follow-up.

A/R by Time Buckets:

• 0-30 Days: 50%-65% of total A/R.

• 31-60 Days: 15%-25% of total A/R.

• 61-90 Days: 10%-15% of total A/R.

• Over 90 Days: Less than 15%-20%.

The majority of claims should fall into the 0-30 day category, reflecting prompt payment processing.

Collection Rate:

Goal: Collect 95%-99% of allowed amounts.

This ensures practices are effectively recovering what they are contractually owed by payers and patients.

Bad Debt Percentage:

Goal: Less than 3%-5%.

This represents the portion of accounts that go unpaid and are written off, which should be minimized through proactive follow-up and patient payment plans.

How to Stay Within Benchmark Ranges

1. Timely Submission: Submit clean claims as soon as possible to avoid payment delays.

2. Follow-Up on Denials: Address denials and appeals promptly to prevent receivables from aging into longer time buckets.

3. Monitor Payer Performance: Track specific payer trends to identify chronic delays or inefficiencies.

4. Patient Responsibility: Improve upfront collections through clear communication of patient balances and payment plans.

5. Regular Review of A/R Aging Reports: Schedule weekly or bi-weekly reviews to catch issues before they escalate.

Final Words

An A/R Aging Report is more than just a financial document—it’s a critical tool for managing the health of your revenue cycle in medical billing. By understanding how to read and leverage the insights from this report, you can identify bottlenecks, improve cash flow, and reduce the risk of lost revenue. Regularly reviewing and acting on your aging report keeps your billing process efficient and ensures that your practice remains financially strong. Mastering this tool is not just about keeping up—it’s about staying ahead.