How much is your old A/R actually worth?
Old A/R is worth the share of it that is still inside payer deadlines and has a valid recovery path, minus contractual adjustments already baked into the billed amount. On a typical specialty-practice queue, roughly half of the 90+ day insurance balance is actionable and a portion of that is recovered; the exact figure depends on payer mix, denial mix, and how long the queue sat untouched.
Why face value overstates it
- Billed charges include contractual adjustments. A $1,000 billed claim with a $600 allowed amount was never worth more than $600 (or the remaining balance after partial payment).
- Some claims are already dead. Past both the filing limit and the appeal window with no proof of timely filing. They belong in the write-off, not the estimate.
- Some balances are patient responsibility mislabeled as insurance, or secondary balances that were never billed.
- Some are duplicates or credits that net to zero once reconciled.
How to estimate recoverable value
- Start with the 90+ day insurance balance, excluding patient balances and credits.
- Remove claims past every deadline with no proof of timely filing. Medicare: one calendar year from the date of service to file (CMS); commercial per contract.
- Convert billed balances to expected allowed amounts using the fee schedule or historical allowed-to-billed ratios by payer.
- Assign each remaining claim a recovery path and a probability based on the denial reason. Not-on-file and coding corrections recover at high rates; medical-necessity appeals lower; timely-filing appeals without proof near zero.
- Sum the probability-weighted allowed amounts. That is the estimate; present it as a range.
A worked example
| Aging bucket | Claims | Balance | Actionable |
|---|---|---|---|
| 90–120 days | 518 | $121,400 | $78,900 |
| 120–180 days | 466 | $104,600 | $61,200 |
| 180+ days | 436 | $114,000 | $44,900 |
| 90+ day total | 1,420 | $340,000 | $185,000 |
In this sample, $340,000 of 90+ day insurance A/R contains $185,000 of actionable balance (claims inside deadlines with a valid path) and an estimated recovery of $80,000–$130,000. At a 15% blended contingency fee, the practice retains $68,000–$110,500 it would otherwise have written off. The 180+ bucket has the lowest actionable share because more of it has crossed a deadline, which is why waiting costs money every month.
The number that matters most
Not the estimate: the deadline list. The 41 claims in the sample within 30 days of a timely-filing limit are worth working this week regardless of anything else. Estimating value is a planning exercise; the deadline list is the work order. A free A/R recovery audit produces both from your own aging report.
Sources
- CMS, Medicare timely filing requirements: claims must be filed within one calendar year of the date of service
- CMS, Original Medicare (fee-for-service) appeals: five levels; redetermination within 120 days, reconsideration within 180 days
- HHS Office of Inspector General, OEI-09-18-00260 (April 2022): 13% of sampled Medicare Advantage prior-authorization denials and 18% of payment denials met Medicare coverage and billing rules
Figures attributed to a source are that source's; commonly used benchmarks are labeled as such. Verify deadlines against your own payer contracts.
Related articles
Related services
- Aged A/R recovery — Claims past 90, 120, and 180 days, worked by deadline and recoverability.
- Medical A/R recovery — 90+ day insurance claims for medical practices, on contingency.