Medical Practice Accounts Receivable: How $23,000 in Insurance A/R Became $134,000

 Today, I want to share a real case study that perfectly illustrates why looking at an aging report is only the beginning.

A client and owner of a medical practice believed there was approximately $23,000 in outstanding insurance A/R.

That was the number they understood to be sitting in the revenue cycle. But after reviewing the accounts and digging into the underlying activity, I found something very different.

Approximately $134,000 in outstanding insurance balances.

That meant there was roughly $111,000 more sitting in the revenue cycle than ownership realized. At first glance, that sounds like great news. But this is where the story gets important.

Finding a balance does not automatically make it collectible revenue.

So the real question wasn't:

"How much A/R is there?"

It was:

"What does that $134,000 actually represent?"

And once we broke it down, the answer became much clearer.

What Was Actually Behind the $134,000?

Approximately $27,800 had already been paid by insurance but had not been posted correctly.

The money wasn't missing from the payer. The account activity simply wasn't accurately reflecting what had already been paid.

Another $15,775 involved stalled claims that required additional review and the appropriate follow-up process.

Approximately $5,000 had been billed using incorrect or inactive insurance information, meaning those claims needed insurance and account review not another routine follow-up call to the same payer.

And then we identified the number that mattered most:

$85,150 in legitimate, collectible outstanding insurance claims.

These were claims that required action. Not theoretical revenue.Not an inflated aging balance. Actual outstanding insurance A/R that could be identified, prioritized, and worked.

And here's the update that made my entire day: $56,000 has already been collected.

That's approximately 66% of the collectible insurance A/R we identified during the review.

Not projected. Not "potential." Collected.

This Is Why A/R Can't Be Treated as One Number

Imagine if we had simply looked at the additional A/R and said, "Great. Let's work the aging."

We would have been treating four very different problems as though they were the same problem. They weren't.

A claim that has already been paid but not posted doesn't need another phone call to the insurance company.

A claim billed to incorrect or inactive insurance doesn't need someone repeatedly following up with the same payer.

A stalled claim may require a completely different workflow than a standard unpaid claim.

And true collectible insurance A/R needs to be identified, prioritized, and worked appropriately. That's the point I want practice owners to take away from this case study:

A/R isn't one problem.

It's often a collection of different problems that happen to add up to one number on a report.

And if you don't understand what's sitting behind that number, it's very difficult to know what needs to happen next.

An Aging Report Is the Starting Point not the Answer

Running an aging report can tell you that balances exist. But it doesn't automatically tell you:

What is actually collectible?

What has already been paid?

What was billed incorrectly?

What has stalled?

What isn't appearing where ownership expects it to appear?

And most importantly:

What needs action today?

Those are very different questions.

And answering them requires more than simply looking at the total at the bottom of a report.

From $23,000 to the Real Story

This review originally started as a complimentary Practice Audit. I expected to take a closer look at the practice's A/R and learn something useful.

Instead, I uncovered a revenue-cycle story I believe every practice owner should pay attention to. The owner believed the outstanding insurance A/R was approximately $23,000

A deeper review identified approximately $134,000 in insurance balances.

Further analysis determined that $85,150 represented collectible outstanding insurance claims.

And since that discovery $56,000 has already been collected.

That is exactly why I've become so passionate about Revenue Management.

I'm not interested in handing a practice owner another report. Most practices already have reports. What I want to know is something much more important:

Are the reports you're already receiving telling you the whole story?

Because sometimes the biggest revenue opportunity in a practice isn't hidden because no one is working hard enough.

It's hidden because no one has stopped long enough to ask what's really behind the numbers.

Do you know what's actually sitting behind the number on your A/R report? A Practice Audit looks beyond the total to identify what's collectible, what's stalled, what's already been paid, and where revenue may be getting stuck.

If you're not completely confident your reports are telling you the whole story, let's take a closer look.

Because you can't make the right revenue decisions without the right revenue picture.

Email us at info@dresdenmed.com to start a conversation.