AR Definitions

Accounts receivable definitions. We begin with definitions to ensure you become familiar with our terminology, understand how to generate accurate stats, and to grow your knowledge so that you can identify better lead measures to move the needle for positive change and achieve your wildly important goals.​​

The first column is dedicated to terminology, followed by definitions, industry benchmarks, and ​examples of how to apply the information based on best practices.​ Let’s jump right in and read through each term and definition:​

Accounts receivable – accounts receivable or AR are monies owed to the clinic. These monies were generated by the sale of products or services and were not collected on the date of service. We expect all patient balances to be collected on the date of service. However, it is common to be awaiting payment from insurance companies or vision discount plans, so long as the monies can be recouped within 30 days and certainly before the timely filing deadline

Account receivable benchmark – to maintain a lean AR process, the AR benchmark is the total of the previous three months receipts divided by three or you can also say, the average of the previous three months of receipts. Your dollar amount should not exceed this benchmark

Aging – total monies due from patients and insurance companies

Global – monies written off to clean up balances without a specific reason or due to many reasons. This should be a rare action and is sometimes a sign of neglect or cause for further investigation of the accounts receivable process

Insurance accounts receivable – monies due from insurance companies at the contractually agreed upon reimbursement date

Patient accounts receivable – monies due from patients. These balances should be collected from the patient on the date of service, including order for products. An exception is the remaining balance owed due to a medical insurance deductible, co-insurance, or non-covered service. Originally sent to the insurance company. These balances are transferred from insurance responsible to patient responsible

Sent to collections – this is the amount of patient accounts receivable monies sent to your collections company due to patient failure to pay for the defined period of time that flags their account as delinquent and meets the minimum balance, defined by your contract with the collections service. For example, many collections will not accept an account balance under $50

Timely filling – insurance AR that is written off because the claim was not filed correctly on time, according to that payer’s submission deadline

Total accounts receivable – this is the total of patient and insurance accounts receivable

Unapplied – monies collected, but not yet applied toward a specific invoiced material or professional service charge within a patient’s ledger. Unapplied balances should be monitored and applied daily. Document the reason for any unapplied balances that go beyond the date of receipt within the patients record

Okay, this was a great overview. Let’s head over to our stats page!​