Accounts Receivable (AR)

Accounts Receivable is the money that is already earned and billed, but not yet in your bank account. In behavioral health, AR lives in long episodes of care and multiple authorizations, so it is easy for real dollars to sit in limbo while everyone assumes someone else is watching it.

AR usually includes all open balances on claims and patient statements after they are billed. It does not include unbilled encounters or services still in documentation or coding. Clean AR hygiene is what keeps revenue predictable and protects you from sudden cash crunches.

How AR is aged

AR is aged based on the number of days since the balance was first created as a receivable. In practice, that usually means from the date the claim or statement was generated and posted as an open balance in your billing system, not from the date of service.

Most AR reports group dollars into aging buckets like:

• 0 to 30 days
• 31 to 60 days
• 61 to 90 days
• 91 to 120 days
• Over 120 days

You should be able to slice those buckets by:

• Payer and plan
• Financial class (commercial, Medicaid, Medicare, self pay, etc.)
• Service line or program (residential, PHP, IOP, OP)
• Claim status and denial reason

Older buckets, especially over 90 and over 120, carry higher write off risk. For behavioral health, per diem stays and recurring services mean a single episode can spread charges across many aging buckets, so you need reports that group by both patient and claim, not just by transaction date.

Payer AR vs patient AR

Payer AR is the portion of your receivable that you expect from insurance. It includes open claims, underpayments you plan to appeal, and small residual balances that have not been adjusted off. Payer AR performance is mostly driven by claim quality, authorization status, and payer behavior.

Patient AR is the portion you expect from patients or guarantors. This shows up as copays, coinsurance, deductibles, and non covered amounts after payer adjudication, along with any self pay arrangements. Patient AR performance is driven by benefit design, your financial policies, and the strength of your front desk and follow up processes.

Most good AR reports separate payer and patient balances. That separation matters. A large over 90 bucket in payer AR usually points to billing, authorization, or appeal problems. A large over 90 bucket in patient AR often points to weak collections practices or unrealistic payment plans.

In behavioral health, watch the split within payer AR for carve out mental health vendors and Medicaid managed care. Those AR segments often run older and need separate work queues.

Why it is measured in days

AR is talked about in dollars and in days. The dollars are the snapshot. The "days" come from the related metric Days in AR, which converts your open AR dollars into how many days of net revenue are currently tied up in receivables.

Thinking in days matters because:

• It normalizes across growth. A bigger practice will always have more AR dollars. Days in AR shows whether cash is slowing down or speeding up.
• It ties directly to cash flow risk. If Days in AR is creeping up, you are effectively funding more of your own operations while you wait for payers and patients to pay.
• It lets you compare payers and programs. You can see that, for example, residential AR with a certain Medicaid MCO is running 20 or 30 days slower than your commercial IOP AR.

You still manage AR at the claim and account level, but monitoring the age in days, and the distribution across aging buckets, tells you where to deploy your staff.

Behavioral health AR: why it skews older

Behavioral health AR often looks older than medical AR because of how benefits are set up and who actually holds the behavioral health risk. Common drivers:

• Carve outs move mental health benefits to a separate vendor. Claims are frequently sent to the medical plan first, then redirected later after a CO 22 denial. By the time the claim hits the correct behavioral health payer, the timely filing clock there has already been running.
• Coordination of benefits gaps cause claims to go to the wrong primary or secondary insurer. When eligibility is not clean at intake, you can burn 60 to 90 days just bouncing between payers.
• Long episodes of care create more touchpoints for authorization to lapse or benefits to change mid stay. That yields partial denials and slow payment, not instant zeroes.

The practical move is to watch your over 90 and over 120 AR buckets by payer and plan. If one behavioral health payer or carve out vendor suddenly spikes, you likely have an upstream issue: expired auths, missing concurrent reviews, or eligibility mistakes at registration. Fixing that at the front avoids months of back-end AR clean up and prevents dollars from aging out under timely filing.

• Treating all over 90 AR as a collections problem instead of a signal. For example, a surge in over 90 AR for a single Medicaid MCO might really be caused by missing concurrent authorizations, not by weak collector performance.
• Letting payer AR and patient AR blend together on reports. When self pay balances after residential stays are mixed with unpaid payer claims, leaders cannot see that the real issue is underpaid per diem rates or authorization caps, not patient nonpayment.
• Starting the aging clock from date of service instead of the date the claim or statement first became an open receivable. That makes AR look older than it is and hides true delays in coding, documentation, or charge entry.
• Leaving small underpayments in payer AR indefinitely. For example, allowing $10 to $30 short pays on PHP per diem claims to sit in AR for months, instead of either appealing them in batch or adjusting them off per contract, inflates AR and masks underpayment patterns.
• Ignoring credit balances and unapplied cash when reviewing AR. When overpayments or misposted payments are not cleared, the gross AR balance on reports looks healthier than your true collectible AR, which can lead to bad cash forecasts.

Behavioral health AR behaves differently because of carve outs, multiple authorizations, and long treatment episodes. Many mental health and substance use benefits are administered by separate vendors, so claims often go to the medical payer first, deny with CO 22, then get re-billed to the behavioral health payer on day 45, 60, or later.

The problem is that the timely filing limit at the correct behavioral health payer did not pause while the claim bounced around. When coordination of benefits is wrong at intake, you can wind up with older AR that looks like standard payer delay, but is actually uncollectible because the claim hit the right payer after the filing window.

You want AR reports that segment behavioral health carve out payers and Medicaid MCO behavioral contracts. Watch the over 90 and over 120 buckets closely by payer. When those spike, assume an upstream failure: eligibility not checked correctly, missing primary coverage, or authorizations that were never requested or never continued. Tightening those front-end steps protects revenue and keeps AR from aging out while staff chase avoidable denials.

AI can help with Accounts Receivable by handling the repetitive monitoring and sorting work that humans rarely have time for. An AR agent can read every 835, update claim status, classify CARC and RARC codes, and auto-route accounts into work queues based on age, payer, denial reason, and dollar amount. That keeps high-risk over 90 AR and carve out payers in front of staff before timely filing becomes an issue.

Supabill uses agents that hold payer rules and state-specific behavioral health quirks, so the system can flag, for example, a pattern of CO 22 or CO 109 denials for one plan and surface that as a root-cause eligibility or COB problem instead of 200 separate AR tasks. The limit is that AI cannot negotiate with payers, interpret contract gray areas, or decide when to escalate to a medical director or legal. Humans still own payer relationships, appeal strategy, and write off policy. AI does the heavy-lift tracking so your team spends its time where judgment and relationships matter.

What should be included in Accounts Receivable for a behavioral health practice, and what should be excluded?

Accounts Receivable should include all open, collectible balances for services that have been rendered and billed: unpaid insurance claims, underpayments you plan to appeal, and patient balances after insurance, such as copays, coinsurance, deductibles, and approved non covered charges. It should not include unbilled services, encounters stuck in documentation, or claims you have fully written off. Credit balances and unapplied cash should be tracked separately in your finance system so your reported AR reflects only what you reasonably expect to collect. Source

Do denied claims stay in AR, and if so, for how long?

Denied claims usually remain in AR until you either overturn the denial and receive payment, or decide the balance is not collectible and write it off. For example, a CO 109 denial for an expired authorization stays in payer AR while your team requests a retro auth or prepares an appeal. Once you decide not to pursue, the AR balance should be adjusted off to avoid overstating collectible revenue. Your policies should define time limits and dollar thresholds for when to stop working a denied balance. Source

How is Accounts Receivable different from Days in AR?

Accounts Receivable is the dollar amount currently owed to your organization. Days in AR is a related metric that expresses how many days of net revenue are currently sitting in that AR balance. You can have the same AR dollars with very different risk profiles depending on your volume. For example, $500,000 in AR at a clinic that bills $50,000 a day is only 10 days in AR, while the same $500,000 at a center that bills $10,000 a day is 50 days in AR and a much bigger cash flow concern. Source

How often should behavioral health leaders review AR, and at what level of detail?

At a minimum, leadership should review AR monthly by aging bucket, payer, and financial class. In behavioral health, a weekly operational review of new unpaid claims, over 60, and over 90 by payer is better, because authorizations expire and benefits change quickly during long stays. At the working level, billers and collectors should live in payer-specific AR queues every day, focusing on over 30 and over 60 accounts before they drift into over 90 status. Source

How can AR reports help catch eligibility and authorization problems earlier?

AR reports that show aging by payer, plus denial reason, will highlight patterns that point to upstream failures. For example, if over 90 AR for one behavioral health carve out payer is dominated by CO 22 (coordination of benefits) and CO 109 (authorization) denials, you likely have recurring eligibility gaps at intake or missed concurrent reviews. Turning those insights into checklists and pre-service audits can drop AR in those payers and prevent future claims from aging out under timely filing limits. Source

• HFMA — MAP Keys
• MGMA