Days in AR is the average number of days a healthcare practice waits to collect payment on its claims, calculated by dividing total accounts receivable by average daily charges.
What it means
Days in AR, also called days sales outstanding for a practice, measures how long money sits in your accounts receivable before it lands in your bank account. You take the total dollars owed to you and divide by your average charges per day. The result is the number of days, on average, between billing a claim and collecting on it.
It is one of the clearest signals of revenue cycle health. A lower number means cash returns to the practice sooner. A rising number means claims are aging, denials are stacking up, or payers are slow. Many practices run 30 to 60 or more days in AR, driven largely by commercial payer adjudication timelines they do not control.
Days in AR is not a measure of whether a claim will eventually pay. It is a measure of when. Two practices can collect the same dollars and have very different days in AR depending on how long the cash takes to arrive.
Why it matters for your practice
For a practice owner, days in AR is the gap you cover out of pocket. Rent, payroll, and supplies are due on a calendar that does not wait for a payer to adjudicate. The more days your cash spends in AR, the more working capital you tie up just to keep the doors open while you wait to be paid for work you already did.
How this relates to Copay
Copay purchases your eligible insurance claims and pays you the next business day, which drives days in AR toward zero on the claims it buys. Instead of waiting 30 to 60 days for the payer, you collect on a purchased claim the next business day. This is not a loan and not factoring, and a denied eligible claim is Copay's loss, not yours.
Written by Eitan Glick, CEO, Copay Inc.
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