Days in A/R in Medical Billing: Formula, What Is Good, and a Worked Example

Days in A/R (days in accounts receivable) is total accounts receivable divided by average daily charges: the number of days of billing that are sitting unpaid on a given date. A practice that charges 15,000.00 a day and carries 540,000.00 in A/R has 36 days in A/R.

It is often the first number people ask about a billing office. It can also drop without any new money collected, so the formula matters as much as the result.

Where you see it

Place	What it shows
Practice management system A/R summary	Total A/R on a date, usually split between insurance and patient balances, next to the aging buckets
Monthly financial pack	Days in A/R trended month over month, often by payer
MGMA DataDive Cost and Revenue	The practice benchmark, reported there as days adjusted fee-for-service charges in A/R
HFMA MAP Key FM-1	Net Days in A/R, the hospital and health system version

The formula

Days in A/R equals total A/R divided by average daily charges. Average daily charges equal the gross charges for a period divided by the number of days in that period.

MGMA states it exactly that way: total A/R divided by average daily charges, showing how many days pass between the date of service and payment. The AAFP adds one refinement to the denominator: add the period’s charges, subtract credits received, and divide by the number of days in the period. HFMA’s MAP Keys define a different metric with a similar name. The next table shows the differences.

	Practice version (MGMA, AAFP)	HFMA MAP Key FM-1, Net Days in A/R
Numerator	Total A/R at gross charges on the report date	Net A/R: the patient receivable on the balance sheet, net of credit balances, contractual allowances, allowances for uncollectible accounts and charity care discounts
Denominator	Average daily gross charges over a period you choose; the AAFP nets credits out of the charges	Average daily net patient service revenue over the most recent three months (April to June is 91 days)
Credits	Credit balances sit inside total A/R and make it look smaller unless you pull them out	Excluded from net A/R by definition
Charge period	Not fixed; 90 days and 12 months are both common, and a shorter window shows seasonal swings	Fixed at three months
Typical result	A larger number, because gross charges exceed what will be collected	A smaller number, because both sides are net

A hospital reporting 45 net days and a practice reporting 45 gross days are describing different things. Pick one version, write the charge period on the report, and do not change either without saying so.

What counts as good

The AAFP’s published guidance is that days in A/R should stay below 50 at minimum, and that 30 to 40 is preferable. MGMA publishes medians by specialty inside its DataDive data set, which is not public, and defines its Better Performers as practices below the median; in its July 2026 poll, 43 percent of medical group leaders said their days in A/R were about the same as a year earlier, 32 percent said higher and 22 percent said lower. We found no MGMA page that publishes a specialty median for days in A/R, so the body of this article does not state one.

One detail from the MGMA article is especially useful: a practice reported 28 days on its insurance A/R and 32 days overall once self-pay balances were included. Patient balances age differently from insurance balances. Report both numbers.

Why oncology practices run higher

Nothing in the formula is specific to oncology, but the inputs are.

• Drug charges. A chemotherapy administration (96413) comes with drug lines that are large, carry NDC and unit requirements, and are reviewed by payers before payment. A/R is measured in dollars, so a handful of pended drug claims moves the number more than a week of office visits would.
• Authorizations. A radiation course needs an authorization in place before the first fraction, and since January 2026 it also needs to name the right delivery code. When the authorization is late, remapped or disputed, every delivery line in the course waits with it; a 20 to 40 fraction course can hold several weeks of charges.
• Course-based codes. Weekly management (77427) is billed once per five fractions, and many centers release delivery lines when the week closes. Charges are posted in batches, days after the service dates, and days in A/R count from the date of service.
• Secondary and crossover claims. After Medicare pays its share the remaining patient responsibility sits in A/R while the supplemental claim crosses over or the statement cycle runs.

A rising number still needs attention. But a radiation oncology practice should compare itself to its own history and to other oncology practices before primary care.

Worked example

An illustrative freestanding radiation oncology center, report date September 30.

Input	Amount
Total A/R on September 30 (insurance 468,000.00, patient 72,000.00)	540,000.00
Gross charges July 1 to September 30 (92 days)	1,380,000.00
Credits posted in the period (refunds and credit balances)	20,000.00
Average daily charges: (1,380,000.00 minus 20,000.00) divided by 92	14,782.61
Days in A/R: 540,000.00 divided by 14,782.61	36.5

The same practice can report three other numbers on the same day.

• Insurance only: 468,000.00 divided by 14,782.61 is 31.7 days. The patient balances add almost five days.
• After a write-off: moving 60,000.00 of old patient balances to bad debt leaves 480,000.00 in A/R, which is 32.5 days. Nothing was collected.
• Over 12 months instead of 92 days: 5,100,000.00 in charges minus 70,000.00 in credits over 365 days is 13,780.82 a day, so 39.2 days. Same A/R, different denominator.

Compare days in A/R figures only when they use the same definition.

What to do

• Compute it monthly, the same way every month. Same formula, same charge period, same report date, and print the definition on the report.
• Split insurance from patient, then split insurance by payer. One payer at 60 days while the rest sit at 30 points to a contract or enrollment issue, not a billing problem.
• Read it next to the aging. A large month of new charges makes old A/R look smaller; the share of A/R over 90 and over 120 days shows whether old balances are growing.
• Check adjustments whenever the number falls. If write-offs rose the same month, the drop came from write-offs, not collections.
• In oncology, track drug A/R and authorization-pended courses as their own lines. They usually explain most of the gap to a primary care benchmark.
• Iridium Suite’s reporting can pull the A/R balance by payer and the charge totals by date range, so the formula is run from the same two reports every month.

Related terms

• Clean claim rate
• Claim denial rate
• Net collection rate
• First pass resolution rate
• Timely filing limits
• Having a plan for accounts receivable follow-up

Further reading: MGMA Stat, July 2026: Days in A/R holds steady for most practices, but payer pressure persists; AAFP: Managing practice finances (days in A/R, adjusted collection rate, denial rate); HFMA MAP Keys, 2023 edition (PDF), FM-1 Net Days in A/R; MGMA: Understanding cost and revenue data.