Pull your AR aging report today, August 6, and look at the 91-to-120 and 121-plus buckets. Claims with dates of service from February, March and April are sitting there. Most commercial payers allow 90 to 180 days from the date of service for an initial claim; many allow less for a corrected one. Medicare allows twelve months. Every week you wait, another slice of that money crosses the line from "collectible with work" to "write-off with an explanation." September 30 is the natural deadline: it closes the third quarter and it gives October a clean start before the year-end rush.
We run this six-week clean-up for practices every late summer. It is not glamorous. It is the single highest-return project in the revenue cycle calendar, because the money is already earned, the work is already documented, and the only thing standing between the practice and payment is follow-up that did not happen.
Key takeaways
- Sort by days remaining to the filing limit, not by dollars. A $40 claim that dies tomorrow is gone; a $900 claim with 80 days left will still be there next week.
- The no-response bucket, claims accepted by the clearinghouse and never adjudicated, recovers more per hour than any other week of the plan.
- Unapplied cash and credit balances are compliance problems as well as accounting ones. Medicare overpayments must be reported and returned within 60 days of identification.
- Every write-off gets a reason. The list of reasons is the real output of the clean-up, because it tells you what to fix so next August's buckets are smaller.
Before week one: freeze the numbers
Run the aging report by payer and by bucket, run the denial report for the last six months, run the credit balance report and the unapplied cash report. Save them with the date in the file name. In six weeks you will run the same four reports and compare. Practices that skip this step cannot tell whether the clean-up worked, and cannot show the owners what the project was worth.
For a sense of scale: a practice with $2.4 million in annual collections and 45 days in AR carries about $300,000 in open receivables. If 18 percent of that is over 120 days, which is common in practices that have not done a clean-up in a year, that is about $54,000 in the oldest bucket. In our experience roughly a third of the oldest bucket is recoverable with work, a third is adjustable with a reason, and a third is patient balances that need statements. The plan below is how you find out which third is which.
The six weeks
| Week | Dates | Focus | Done means |
|---|---|---|---|
| 1 | Aug 10 to 14 | Timely filing triage: every open claim, sorted by payer filing limit and days remaining | Claims within 30 days of the limit are resubmitted or appealed; claims past the limit are listed with the reason |
| 2 | Aug 17 to 21 | Denials 91-plus days: group by CARC, work highest dollar first | Every denial over $250 has a corrected claim, an appeal, or a documented write-off decision |
| 3 | Aug 24 to 28 | No-response claims: submitted, accepted, never adjudicated | Claim status (276/277 or portal) checked; missing claims resubmitted with proof of original submission |
| 4 | Aug 31 to Sep 4 | Unapplied and suspense cash | Every payment older than 30 days matched to a claim or refunded |
| 5 | Sep 8 to 11 | Credit balances | Patient credits refunded or applied; payer overpayments refunded within the payer's window and Medicare's 60-day rule |
| 6 | Sep 14 to 25 | Small balances and patient AR | Balances under your threshold adjusted with a code; patient statements current; payment plans documented |
The weeks in detail
Week one: timely filing triage
Build a table of your top fifteen payers and their filing limits for initial claims, corrected claims and appeals. Most practices have never written this down, and the limits live in contracts nobody has opened since they were signed. Then sort every open claim by days remaining. Anything within 30 days of a limit is worked first, regardless of dollar value. For claims already past the limit, do not simply adjust them off. Check whether you have proof of timely original submission: a clearinghouse acceptance report with a date, or a payer acknowledgment. Many payers accept a timely filing appeal with that proof, and CO-29 denials are among the most reversible when the evidence exists. A practice we worked with recovered a little over $11,000 in one week from CO-29 denials it had been writing off for a year, simply by attaching the 277CA acceptance reports.
Week two: the denials that aged
Group by claim adjustment reason code and sort by dollars. In most practices five codes cover most of the money: CO-16 (missing or invalid information), CO-197 (authorization absent), CO-4 (modifier inconsistent with the procedure), CO-97 (bundled into another service) and CO-50 (medical necessity). Work the top twenty denials by dollar value on Monday; the pattern you find tells you what to do with the other three hundred. A $3,000 surgical denial for CO-197 is either appealable with a retro-authorization request or a lesson for the scheduler. Decide which, write it down, move on. Do not let the team spend Tuesday debating a $60 CO-16.
Week three: the claims nobody heard back on
This is the quiet leak. A claim was accepted by the clearinghouse, the payer never adjudicated it, nobody noticed because it never appeared on a denial report. Run every open claim over 45 days with no remittance and check status. You will find claims the payer never received (resubmit with proof), claims pended for records you never saw a request for (send them), and claims that were paid to the wrong location or the wrong tax ID (call, and fix the enrollment record that caused it). In our experience this bucket recovers more per hour than any other week, because nothing is actually wrong with the claims; they were simply lost.
Weeks four and five: cash that is sitting in the wrong place
Unapplied cash inflates AR by leaving claims open that were actually paid, and it hides overpayments that must be refunded. Match every unapplied payment older than 30 days. The usual causes are a payment posted to the wrong patient with a similar name, a payer remittance with no claim number, and a patient payment taken at the desk and never linked to a visit. Credit balances owed to Medicare must be reported and returned within 60 days of identification; commercial contracts usually have their own windows, and several states have unclaimed property rules for patient credits. A credit balance report that nobody has worked since spring is a compliance problem, not just an accounting one, and it is one of the first things a buyer's due diligence team asks for if the practice is ever sold.
Week six: small balances and patients
Set a small-balance threshold with your accountant, adjust everything under it with a specific adjustment code so it stays visible in reporting, and make sure every patient balance over the threshold has had a statement in the last 30 days. Patient AR that has not been statemented is not AR; it is a decision not to collect. While you are in the patient bucket, check that payment plans are documented with an amount, a date and a signed agreement, because a plan that exists only in a biller's memory ends when the biller leaves.
The write-off rule
Every write-off gets a reason code and a name. "Timely filing, no proof of submission." "Denied CO-50, appeal lost." "Small balance under threshold." "Provider not credentialed on date of service." A practice that writes off with a generic code cannot find its leakage next year. A practice that writes off with reasons has a list of process fixes, which is the actual output of the clean-up. If "provider not credentialed" is a top-three reason, the fix is in enrollment. If "authorization absent" is, the fix is at scheduling. The clean-up finds the money; the reasons find the leak.
What the numbers should look like on September 30
| Measure | Target | Why |
|---|---|---|
| AR over 120 days as a share of total AR | Down from the August baseline; every remaining line has a documented status | Shows the oldest money was worked, not ignored |
| Unapplied cash older than 30 days | Zero | AR is real; overpayments are visible |
| Credit balances older than 60 days | Zero | Medicare 60-day rule; state unclaimed property rules |
| Write-off report | Every line has a reason, grouped, with the top three turned into Q4 process changes | The leak list |
| Timely filing table | Written, dated, in the billing manual | Next year's week one takes an hour instead of a week |
Questions we hear
Should we hire temporary help for this?
Sometimes. The triage in week one and the status checks in week three are teachable in a day. The denial rework in week two needs someone who knows your payers. Many practices pair one experienced biller with one temporary worker for six weeks. Our billing team runs this as a project for practices that would rather hand it over, and the RCM audit starts with exactly these four reports.
What if we find a lot?
You will. That is the point. What matters is what you change afterward so that next August the buckets are smaller. A clean-up that recovers $40,000 and changes nothing recovers $40,000 again next year from the same causes.
Our billing company says AR is fine. How do we check?
Ask for the four reports with the August date, and ask for the write-off report by reason for the last twelve months. A billing company that cannot produce write-offs by reason is adjusting balances with a generic code, and you cannot tell what you lost or why.
What to do this week
- Run and save the four baseline reports with today's date.
- Write the timely filing table for your top fifteen payers from the contracts, and confirm anything unclear with the payer representative.
- Assign week one to a named person and block the time on Monday, August 10.
- Create the write-off reason codes in your practice management system if they do not exist.
- Book a thirty-minute review on October 1 to compare the September 30 reports with the August baseline.
