How Practices Are Cutting AR Days with Smarter Claim and Payment Workflows

Efficient cash flow is vital for every healthcare practice. One key metric for cash flow is Days in Accounts Receivable – the average time it takes to collect payment after services are delivered. In healthcare, AR Days measures how long claims and patient bills sit unpaid on the books.

High AR Days tie up cash and can signal billing bottlenecks. Prolonged AR Days often mean lost revenue and strained budgets: “the more accounts age, the less likely they’re paid,” leading to losses for providers. By contrast, lower AR Days mean faster reimbursements and healthier cash flow.

Reducing AR Days has become a top priority for revenue cycle teams. Modern practices are cutting AR Days by eliminating avoidable delays and errors. They use streamlined claim processing, intelligent automation, proactive denial management, integrated payment options, and real-time analytics to get paid faster.

Crucially, cloud-based EHR platforms with built-in revenue cycle management bring all these improvements together. An end-to-end, cloud-based RCM workflow can seamlessly link scheduling and charting to billing and payment, so claims flow smoothly from start to finish.

What Are AR Days and Why Do They Matter

AR Days is a basic measure of revenue cycle health. It’s defined as the average number of days between providing a service and receiving payment for it. 

• For example, if a clinic bills insurance for an office visit on January 1 and collects payment on February 1, that claim took 31 days in A/R. 
• By tracking many claims this way, organizations gauge how quickly they turn services into cash. 
• A low AR Days means money is coming in promptly; a high number signals slow collections.

Why is this so important? Simply put, cash flow makes or breaks a practice. Slow AR Days delay revenue and can create a financial crunch. 

One revenue-cycle expert explains that when AR Days creep too high, billing gets backlogged and few resources remain to invest in staff or equipment, the practice can “crumble under the pressure”. High AR Days often indicate problems like claim errors, denials, or patient billing issues that should be fixed. 

As one industry leader puts it, AR Days is “the strongest measure of the health of the revenue cycle”. By contrast, fast collections mean better liquidity, lower borrowing needs, and the ability to reinvest in care delivery.

Core Strategies for Reducing AR Days

Cutting AR Days is complex, but top practices focus on several common strategies. These include ensuring clean claims, using automation and real-time workflows, managing denials proactively, and offering streamlined payment methods. 

Often, the most powerful change is eliminating manual hand-offs and duplicate data entry, for example, using an integrated cloud EHR/RCM so that once a patient’s information is entered, it flows automatically through billing steps. 

1. Verify and Clean Claims at the Start

Upfront accuracy is crucial. Verifying patient insurance eligibility and authorizations during registration can prevent downstream rejections. Completing clinical documentation before billing and “scrubbing” claims with rules-driven software catches errors early. 

Clean claims – those submitted without mistakes – avoid time-consuming denials. Industry guides note that practices should “focus on sending out clean claims” because preventing errors from the start makes the entire cycle more efficient. 

Best practices include verifying coverage and benefits at check-in, obtaining pre-authorizations, and ensuring all required information is collected. Other recommendations are:

• Verify insurance and benefits before service, including payer specifics for each procedure.
• Obtain needed authorizations early (e.g., pre-certifications, referrals).
• Ensure clinical notes, coding, and documentation are complete and accurate before billing.
• Use claims-edit software to check for common errors and fix them before submission.
• Submit claims electronically rather than on paper to eliminate mailing time

By doing this, claims usually pass through payer adjudication on the first try, speeding payment. For example, organizations that automate eligibility checks and claim edits see much higher “first-pass” acceptance rates, meaning fewer rejections and quicker AR cycle completion.

2. Automate Workflows and Integrate Systems

Manual processes and disconnected systems add days to A/R. Modern practices are using software automation at every step. Automated reminders and rules-driven workflows ensure claims are followed up without delay. For instance, if a claim is unpaid after a set time, the system can automatically put it into a follow-up queue. 

Dashboards and alerts then highlight aging accounts that need action. Research shows that embedding analytics into RCM “cuts down the amount of manual work” and lets staff focus on exceptions. 

Integrated EHR and RCM systems are especially effective: they eliminate data hand-offs and automate transitions. One report notes that linking EHR and billing “automates critical tasks” like coding and eligibility checks, reducing manual entry errors and claim turnaround times. In fact, a case study found that RCM automation cut claim processing times by about 25%.

3. Proactive Denial Management

Every denial forces rework and adds days in A/R. Practices that track denial causes and respond quickly to denials can recover revenue and prevent recurring issues. Key steps are to log all denials, categorize them, and ensure each denied claim is appealed or corrected promptly. 

Guidance from billing experts emphasizes: “If you want to lower days in A/R, target your denials,” because denials disproportionately increase this metric. By analyzing denial patterns, teams can fix systemic problems so fewer claims are denied in the first place. 

• For example, logging denials and building a structured appeals process have been shown to improve collections. 
• One expert checklist recommends logging each denial, identifying the most frequent causes, and compiling documentation to overturn denials. 
• Over time, this “proactive denial management” approach means less time spent chasing old claims and faster overall payments.

Related: 4 Steps To Improve Claim Denial Management In Healthcare

4. Enable Integrated Payment Collection

Simplifying the final payment steps also cuts AR Days. Electronic funds transfer for insurance reimbursements, for instance, delivers funds as soon as a claim is paid. Studies show that encouraging payers to send EFTs, rather than paper checks, removes mailing delays. 

One review notes that switching to EFT can significantly reduce the wait: “The moment a claim has been approved by the payer, you can easily get your payments” without waiting for paper checks. 

Similarly, letting patients pay online or via kiosks at checkout speeds personal collections. Many practices now use patient portals or mobile apps to show balances and accept payments instantly. An integrated system even applies copays and deductibles at check-in, rather than chasing patients later.

Related: Proven Ways Clearinghouses Simplify ERAs and EOBs for Faster Payment Posting

5. Real-Time Analytics and Reporting

Timely data is a force multiplier. By tracking KPIs like AR Days, denial rates, and collections in real time, revenue leaders can spot trouble early. Modern systems offer live dashboards of key metrics so teams can act before accounts age out. 

For example, real-time RCM analytics can show current days in AR and trending payment statuses instantly. This “helps providers reduce the time between giving care and getting paid,” speeding cash flow. 

• Analytics also help find bottlenecks: if one payer’s claims are aging, staff can prioritize those. Many vendors report that organizations using real-time dashboards achieve significant gains in collection efficiency and AR performance. 
• Dashboards also highlight patient payments, denial causes, and other metrics at a glance. 

In short, having up-to-the-minute RCM insights lets practices continuously optimize their workflows and keep AR Days from creeping up.

The Cloud EHR Advantage

All of the above strategies work best when the systems are unified, as in a cloud-based EHR with built-in RCM. In a cloud EHR, clinical documentation, billing rules, claim submissions, and patient payment tools all live in one platform. This end-to-end integration closes gaps. Instead of copying data from an EHR to a separate billing system, the information flows seamlessly. 

The result is fewer errors and faster claims. One industry analysis notes that integrating EHR and RCM “eliminates silos between clinical and financial workflows,” allowing patient data to move automatically from documentation to billing. With a connected system, verifying eligibility at check-in, coding chart notes, submitting claims, posting payments, and tracking AR all happen without duplicate entry.

This unified approach brings multiple benefits for AR days. 

• First, accuracy improves: automated coding and claims checks within the same system greatly reduce typos and missing data, driving down denial rates. Less rework means claims get paid on the first submission. 
• Second, efficiency rises: tasks like eligibility checks and remittance posting can be automated in one workflow, cutting back-office labor and speeding up every step. Studies show RCM automation can reduce claim turnaround by roughly a quarter. 
• Third, insight and control improve: cloud EHRs with RCM deliver dashboards that monitor AR Days, clean claim rates, and denials continuously. Practice leaders can log in at any time to see live AR status and drill down into problem accounts before they lag. 
• Finally, patient experience improves: integrated billing means patients see clear upfront estimates, receive one combined bill, and pay via the same portal they use for appointments. The result is fewer billing complaints and more on-time payments.

When the EHR is cloud-based, all providers share the latest updates at once. The IT team doesn’t have to manage separate installations or patches. 

Because the system is in the cloud, staff can work anywhere on the same data. This flexibility means AR follow-up can continue without interruption, even if teams are remote.

Unlock Faster Payments with Vozo’s All-in-One Cloud EHR + RCM Suite

Ready to reduce your AR Days and get paid faster? 

Vozo’s Cloud EHR is built to streamline every step of your revenue cycle, from the moment a patient schedules an appointment to the final payment reconciliation. 

Our fully integrated platform combines advanced clinical tools with a powerful RCM Suite, giving your team the automation, visibility, and control needed to accelerate collections and boost revenue performance. With Vozo’s RCM Suite, you get:

• End-to-End Medical Billing Module for clean claims and faster reimbursements
• Advanced AR Management to monitor, prioritize, and resolve aging accounts
• Proactive Denial Management with real-time alerts and appeal tracking
• ERA & EOB Automation for accurate posting and faster reconciliation
• Integrated Eligibility Verification & Pre-Auth Tools at check-in
• Analytics Dashboards for real-time claim and payment insights

Experience a smarter way to manage your revenue. Book a demo with Vozo today.