Complete Guide to Reducing Days in Account Receivable Without Increasing Staff

Healthcare providers across the country are struggling with mounting days in account receivable (AR) that tie up revenue and strain operations. The traditional solutions like hiring more staff is not always feasible given budget constraints and staffing shortages.

Here’s the good news: you can dramatically reduce your AR days without adding a single person to your team.

This guide walks you through proven strategies that healthcare organizations are using right now to cut their account receivable days by 30-50% using smart processes, automation, and strategic optimization.

Why Account Receivable Days Matter More Than Ever

Account receivable represents the money owed to your healthcare organization for services already rendered. High-performing healthcare organizations typically maintain their account receivable days between 30 and 40 days. Anything above 50 days signals inefficiencies that need immediate attention.

Here’s why this metric is critical: Lower AR days mean more predictable cash flow, operational flexibility, and better financial health. According to the U.S. Department of Commerce, the likelihood of collecting on delinquent accounts depreciates by half a percent per day past 90 days.

Why Adding Staff Isn’t the Answer

The knee-jerk reaction to mounting AR is often hiring more people. But here’s the problem: It’s expensive, doesn’t address root causes, and healthcare is experiencing unprecedented staffing shortages. The solution isn’t working harder, it’s working smarter.

Strategy 1: Submit Clean Claims from the Start

Errors in patient access and registration are the number one cause of initial claim denials. Every denied claim adds weeks to your account receivable timeline.

Implementation steps:

• Verify insurance upfront with real-time eligibility tools
• Capture complete patient demographics and insurance details
• Use claim scrubbing software that catches errors before submission
• Train staff regularly on payer requirements and coding changes

Staying ahead of understanding current claim denial trends helps your team anticipate payer-specific issues and adjust submission practices proactively.

 

Strategy 2: Leverage Automation for Routine Tasks

Automation transforms your existing team from data entry clerks into strategic problem-solvers. Most claims are typically processed within 15 to 30 days of submission, but only if you submit them promptly.

Key areas to automate:

Claim submission: Set up rules-based workflows that automatically route completed claims. Automated systems work 24/7 without breaks, vacation, or sick days.

Payment posting: Automated matching of payments to outstanding invoices eliminates hours of reconciliation work.

Patient billing: Electronic billing systems send statements automatically based on aging triggers you define.

Follow-up reminders: Configure your system to automatically flag unpaid claims and route past due accounts to staff for progressive outreach efforts based on delinquency stages.

One well-configured system can handle the workload of multiple full-time employees.

Strategy 3: Implement Strategic Denial Management

Claim denials are inevitable, it’s imperative to act quickly to appeal denied claims and reduce account receivable days. In this blog article you will learn more about building an effective denial management workflow that tracks KPIs and identifies patterns systematically

Build a system that works:

• Categorize and track every denial with standardized logging
• Identify patterns by reviewing denial reports weekly
• Prioritize high-value claims and those approaching timely filing limits
• Develop payer relationships, some organizations have reduced aged AR by $100-200 million through strategic payer partnerships.

 

ProMantra’s revenue cycle management services include comprehensive denial management programs that help healthcare providers recover revenue that would otherwise be written off.

Strategy 4: Optimize Your Collections Workflow

Your collections process needs structure, prioritization, and accountability.

Create a systematic approach:

Segment accounts into 30, 60, and 90+ days past due categories. Establish follow-up schedules, check claim status 2 weeks after submission, and escalate internally if no response after 30 days.

Use technology for tracking to measure average days pending by payer. Implement patient-friendly payment options including online portals, payment plans, and multiple payment methods. A good rule of thumb is that 80 percent of your receivables should be within the 0-to-30-day range.

Strategy 5: Enhance Front-End Revenue Cycle Processes

Most account receivable problems don’t start in billing, they start at registration. Patients receiving high-cost treatments should never leave the office without understanding their financial responsibility. When you skip this conversation, AR days can easily spike beyond 30 days. Implementing accurate medical data entry practices from the point of registration prevents downstream billing errors that extend account receivable days.

Strengthen your processes:

• Discuss costs upfront before services are rendered
• Collect copays and deductibles at time of service
• Verify specific coverage details and authorization requirements
• Offer payment plans immediately with reasonable terms

Strategy 6: Harness Data and Analytics

Healthcare AR software solutions provide detailed insights into account receivable aging reports, making it easier to identify patterns and optimize follow-up strategies.

AI-powered solutions enhance AR tracking by identifying trends and inefficiencies that humans may miss, with machine learning algorithms predicting payment timelines based on historical data.

Key metrics to track:

• Days in AR by payer
• Clean claim rate (target 95%+)
• Denial rate (top performers achieve 2-3%)
• Net collection rate (should be 95-99%)
• Aged AR percentage (keep over 90 days below 10%)

Strategy 7: Address Root Causes Through Collaboration

Significant reduction in account receivable often requires collaboration with leadership from other areas of the revenue cycle.

Common root causes to investigate:

• Coding accuracy and physician documentation
• Authorization gaps and tracking systems
• Contract management and billing rates
• Technology limitations creating bottlenecks
• Communication breakdowns between clinical and billing teams

How Technology Makes All the Difference

Modern revenue cycle technology provides integration capabilities, real-time eligibility checks, automated workflows, predictive analytics, and patient engagement portals. The investment typically pays for itself within months through improved collections and reduced labor costs.

The ProMantra Approach to Account Receivable Management

At ProMantra, we understand that every healthcare organization faces unique challenges. Our revenue cycle management services are customized to your specific needs, combining deep expertise in billing, coding, collections, and denial management.

Our clients typically see:

• 30-50% reduction in AR days within six months
• 15-25% increase in clean claim rates
• 40-60% decrease in aged receivables over 90 days
• Significant reduction in administrative burden

We manage the complex processes so your staff can concentrate on patient care.

Your Implementation Roadmap

Month 1: Assess and prioritize Calculate your current AR days, identify top 3 problem areas, and audit your technology.

Month 2-3: Quick wins Implement clean claim checklists, automated reminders, standardized denial tracking, and weekly AR review meetings.

Month 4-6: Process optimization Roll out patient payment plans, enhance payer relationships, implement claim scrubbing, and develop training programs.

Month 7-12: Advanced strategies Evaluate revenue cycle software, deploy AI-powered analytics, and establish predictive modeling.

Common Pitfalls to Avoid

Don’t expect overnight results, reducing account receivable days is a marathon. Don’t implement technology without fixing processes first. Don’t neglect staff training or ignore front-end revenue cycle issues. What gets measured gets managed, so track metrics consistently.

Measuring Success

Track these KPIs to measure progress:

• Days in AR (aim for 30-40 days)
• Aged AR percentage (keep over 90 days below 10%)
• Clean claim rate (target 95%+)
• Net collection rate (95-99% of allowable charges)
• Denial rate (top performers achieve 2-3%)
• Cost to collect

Set baseline measurements before implementing changes, then track monthly progress.

Take Action Today

Reducing account receivable days without hiring more staff isn’t just possible, it’s happening right now at healthcare organizations across the country. Focus on prevention through clean claims, leverage automation, build systematic processes, and use data to drive decisions.

Ready to take control of your account receivable and improve your cash flow?

Avoid letting further days of unpaid claims diminish your capability to provide exceptional patient care. ProMantra’s revenue cycle management experts are ready to help you develop a customized strategy to reduce your AR days without adding staff.

Schedule a free consultation today to discover how we can help your organization collect faster, reduce denials, and strengthen your financial foundation.