How to Reduce Days in AR for Your Behavioral Health Practice

Days in accounts receivable (AR) measures the average time between service delivery and payment receipt. Behavioral health practices typically carry 65–75 days in AR,¹ while high-performing practices operate at 30–45 days.² This substantial gap represents hundreds of thousands of dollars in tied-up cash flow for mid-size practices. Days in AR is one of the core billing KPIs every practice owner should monitor regularly.

Understanding AR Benchmarks

Performance levels break down as follows:

• 30 days or under: High-performing
• 40–50 days: Average
• 60+ days: Indicates systematic breakdown

Behavioral health faces unique challenges due to complex program types (ARMHS, CTSS, EIDBI), variable payer rules, prior authorization requirements, and telehealth modifier inconsistencies. For a broader look at what drives these challenges, see our overview of behavioral health billing complexity.

Root Causes of Extended AR Days

Five primary factors contribute to lengthy AR cycles in behavioral health:

1. Unverified eligibility — Coverage lapses and plan changes cause claim rejections
2. Authorization gaps — Renewal windows for community-based programs get missed
3. Documentation errors — Missing medical necessity language, incorrect CPT codes, missing telehealth modifiers
4. No follow-up system — Claims submitted without tracking or monitoring
5. Timely filing risk — Claims expire before submission deadlines (90–180 days for commercial; variable for MN Medicaid)³ — learn more about the consequences of timely filing denials

Five Strategies for Reducing AR Days

1. Real-time eligibility verification

Run verification checks before each appointment, particularly at month boundaries when deductibles reset and plans change. This is part of a comprehensive revenue cycle management approach that prevents denials before they happen.

2. Achieve clean claims on first submission

Target a clean claim rate above 90% by ensuring accurate coding, correct place of service designations, complete documentation, and proper telehealth modifiers. Strong claim scrubbing practices before submission dramatically reduce rework.

3. Establish consistent follow-up cadence

Claims without responses at 10–15 days require action via payer calls or status checks. Review A/R aging reports weekly rather than monthly.

4. Manage denials within 48 hours

Assign ownership for each denial, log denial codes, and identify systemic patterns by payer for recurring issues. A formal denial tracking system ensures no denial slips through unaddressed.

5. Conduct monthly AR audits

Analyze aging buckets (0–30, 31–60, 61–90, 90+ days) to identify stalling claims and escalate the 90+ bucket immediately.

The Accountability Factor

Successful AR management requires dedicated ownership. When responsibility spreads across billing staff, clinicians, and front desk personnel, follow-up becomes inconsistent. Practices need one person or team personally accountable for AR performance, with scheduled reviews and trend analysis.

Many practices recognize what they should do but lack the bandwidth or accountability structure to execute consistently. Outsourced behavioral health billing services provide dedicated account coordinators who own AR outcomes through regular audits, proactive follow-up, and performance reporting. If you're ready to take control of your AR, get started with BreezyBilling.

Footnotes

1. Behavioral Health Billing: Reduce AR Days & Denials — Cloud RCM Solutions, 2025

2. Days in Accounts Receivable (A/R): RCM Metrics — MD Clarity, 2024

3. Minnesota Department of Human Services, Medical Assistance Provider Manual — Minnesota DHS, 2025